Why? The perception of the value of work is highly dependent upon its visibility in the physical world. Everybody can see a barista make coffee and understand how she created value. She turned milk and beans into a drinkable drink. But nobody really cares about a commodities broker, even though he was the guy who brought the beans from Sumatra to America. If most people were to learn that he made a million dollars from calling a seller in Jakarta and then calling a buyer in San Diego, they would probably be a bit peeved. He didn’t do anything, after all (but five thousand baristas across America now have beans to turn into lattes).

I am a click merchant. I sell clicks on the internet.

There are a lot of more respectable ways of saying that, of course, but the reality is that Discosloth (our agency) is a merchant of clicks. Folks in the business will call themselves things like growth marketing partner, or paid search management agency, or demand generation company, but at the end of the day, when all is taken into account, we’re really just paid to get people click the right buttons.

I don’t build the websites, I don’t fulfill the orders, I didn’t create the ad platform, I didn’t do anything except create a campaign that surfaces the right content to the right people.

Selling clicks on the internet is a long way from the Hanseatic League, but the apple doesn’t fall far from the tree. Clicks or coffee, it’s really just the same thing.

I find my job interesting because it’s the closest thing in the internet industry to a commodities brokerage. You’re just connecting people who want something to other people who have what they want. There are billions of people and billions of buttons on the internet. My entire job is making sure those billions of people click on very specific buttons (which usually say something like “Buy Now” or “Add To Cart” or “Contact Us”).

It’s even more similar to a commodities brokerage because the compensation is tied to the volume and value of the transactions you’re brokering through these clicks. If someone spends $1 on a click, I might make anywhere from $0.05 to $0.25.

Now, the respectable and fashionable among us, those who like Certifications and Credentials and Social Proof, probably feel a pang of existential guilt, because it’s taboo to say we sell clicks. But nothing’s ever happened on the internet without a click. There are a lot of layers on top of this click, mostly to ensure our clients are only paying for relevant clicks, but it all boils down to the button.

I’d argue that my specific niche is one of the least respected, most misunderstood, and most autistic of all internet marketing—simply because we’re merchants. (We are not the most dramatic or degenerate niche, at least: that award goes to SEO). Our compensation is tied to how much volume we process. It scales well.

Where the dislike for the mercantile model comes into play is that the compensation is not necessarily tied to the specific labor or costs involved in business. A good click-merchant is not paid according to how many hours he spends brokering clicks. He is paid according to his effectiveness, the amount of revenue he brings, and how efficiently it is done. One of the great things about the digital ad model is that it’s highly attributable and revenue-adjacent. Just like a coffee broker can charge more if his service is high-quality, fast, dependable, and knowledgeable, so the click broker can charge more.

If you know many software developers, especially those in large corporations, you’ll hear the common distaste for the software sales guys. I have heard countless complaints about how much the biz dev guys make. It usually goes something like “This SDR guy in the sales department was the highest compensated guy at the company last year…can you believe that? He can’t even code a hello world script!”

The SDR guy is simply a merchant. Without him, the developer would be sitting at his desk surrounded by Star Wars plushies, with a fountain of limitless programming skill, but without a thing to do. Until the SDR guy connects him with a paying client, his immense talent is simply simmering without a purpose.

(It doesn’t help that the SDR guy’s desk doesn’t have any Star Wars plushies on it, and he’s rarely actually even sitting at the desk. When he does come in, he instead has framed pictures of a beautiful wife and kids, something usually absent on the developer’s desk).

People don’t like merchants.

They don’t like the coffee broker. They don’t like the deal broker. They don’t like the Dutch.*

Understandable. We’re not very likable. We just sell shiploads of coffee beans - or clicks on the net.

*or Phoenicians, Greeks, the Hanseatic League, Jews, Armenians, et al

Nonfiction

I have read a bit more nonfiction this year than last, and with only a few exceptions I was able to honor my self-imposed ban from business books, which are, almost without fail, the most useless pieces of word-slop ever put together.

Ordering the nonfiction vaguely from best to worst:

A Rumor of War - Philip Caputo
Four Voyages - Christopher Columbus
The Prince - Nicolo Machiavelli
In Pharaoh’s Army - Tobias Wolff
Dispatches - Michael Herr
Hillbilly Elegy - J.D. Vance
A Great Place To Have A War - Joshua Kurlantzick
Movie Memories - William Shatner
The Making of Prince of Persia - Jordan Mechner
Moldova: A History - Rebecca Haynes
The Big Score - Michael Malone
The Technological Republic - Alex Karp
Incident At Devil’s Den - Terry Lovelace
A Confederate Soldier In Egypt - William Loring
How I Found Livingstone - Henry Stanley

Of note, I found the following nonfiction books especially good.

A Rumor Of War tells of Philip Caputo’s story of going from Vietnam grunt in the first year of the war, to returning 10 years later as a journalist. While not always the most pleasant of reads, I learned that Vietnam was a far more complicated story than I’d been led to believe.

Four Voyages is a collection of Columbus’s diaries, ship logs, and contemporaneous accounts of the discovery of the New World. Likely the most straight up educational book I read this year. Did you know that Columbus, prior to his discovery of Hispaniola, had journeyed up and down the coast of Africa, and even visited Iceland, where according to his son he first learned that Vikings had been visiting the northern mainland for many years? Did you know that Columbus’s second voyage was comprised of 17 ships and over 1,200 men, establishing settlements across Puerto Rico, Cuba, Jamaica, and Guadeloupe?

The Prince is perennially misunderstood. It’s more of a warning, not a devilish handbook to psychopathy. Worth a read.

Fiction

I also read (and re-read) quite a few fiction books. I disperse these in between the heavier nonfiction (sort of like listening to Fatboy Slim in between Bach’s cello suites). I was specifically pleasantly surprised by J.K. Rowling’s Strike series, which are some of the better written and attention-grabbing mysteries I’ve read in a long time.

That Hideous Strength - C.S. Lewis
Horn of Africa - Philip Caputo
The Cuckoo’s Calling - Robert Galbraith
The Silkworm - Robert Galbraith
Career of Evil - Robert Galbraith
Lethal White - Robert Galbraith
Troubled Blood - Robert Galbraith
The Passenger - Cormac McCarthy
Wise Blood - Flannery O’Connor
DelCorso’s Gallery - Philip Caputo
The Prose Edda - Snorri Sturluson
The Campaign of Prince Igor - Anonymous
The Colour of Magic - Terry Pratchett
Atlas Shrugged - Ayn Rand
The Camp of the Saints - Jean Raspail
The Algebraist - Iain M Banks
The Partner - John Grisham
The Broker - John Grisham
Bleachers - John Grisham
Point of Impact - Stephen Hunter
The Things They Carried - Tim O’Brien

I was especially disappointed by The Things They Carried, perhaps because it comes so recommended as one of the best pieces of Vietnam fiction/nonfiction. I found it self-important and pandering. To echo Truman’s famous quote about Robert Oppenheimer, “Don’t you ever bring that crybaby back here ever again.”

I also revisited Atlas Shrugged for the first time since my adolescent foray into libertarianism, ironically solidifying myself as very much not-a-libertarian. Although a vastly important book, with a million accurate points, I can only come to the conclusion that Ayn Rand was an extremely bright yet severely autistic lady who never actually hired, fired, or ran a successful business in any way.

Horn of Africa was especially good. Perhaps it’s because I have trudged around some of the most corrupt areas of Africa to identify with the protagonist, but it was nostalgic in an odd and brutal way.

Top recommendations

If you haven’t read these books, read them: That Hideous Strength, The Cuckoo’s Calling, Four Voyages, The Prince, Horn of Africa.

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Here in the United States — again, depending on who you’re talking to — people are either living in hopeless, desperate, penniless squalor, or they are all land-owning, yacht-floating, tax-avoiding millionaires and billionaires.

Like nearly every subject these days, both are lies. The truth is in the middle.

I am no longer young. I am closer to forty than thirty. I am also not old. I am solidly, squarely, undeniably an adult. I haven’t been able to handle more than two beers for years now, but I’m also 24 years from being able to withdraw from my IRA.

This purgatorial age of neither old nor young gives me the unique ability to call it like I see it, without the ignorance of Gen Z or the arrogance of a boomer. I’ve been working for enough years that I’ve seen consequences, but I’m not yet jaded enough to forget the struggle.

Sometimes I look around at folks in their early twenties complaining that they’ll never be able to afford a house, and it makes me chuckle. When I was in my early twenties, I also couldn’t have afforded a house, even though looking at historical prices makes me wish I did. Or I see a 26-year-old saying something about work/life balance, and I snort. You’ve haven’t earned your rest yet. You’ll never have as much energy as now. Wouldn’t you rather work while you can?

And then I look at folks in their late seventies complaining that the young folks just need to “put back some” towards retirement, and I also chuckle. When you’re young, you have to pay rent, buy groceries, have kids, and save up for a new beater car. There’s rarely anything left over for “retirement”. The world is different today. It’s been globalized. Jobs are harder.

Both sides are simplistic. Life isn’t easy (systemically). But neither is it hard (systemically).

You should listen neither to the 26 year old or the 76 year old. You must look at the 36, 46, and 56 year olds.

The reality is a compromise between the poles. And when I look around at peers, there are a few things that come to mind.

First, encouragement to the young folks:

• You would not believe how many morons I know who make well into six figures. If they can do it, you can too.

• You will eventually own a house. If you want one, they will be there.

• It is not expensive to own a reliable car. You may need to settle for something a couple years old with 40,000 miles on it. It may not be a 2025 Escalade, but it will have Bluetooth.

• Twenty-four million households in the US are millionaires. Many of them were mechanics or general contractors. And all they did was make consistently good decisions.

Second, a bit of a request for understanding from the old folks:

• The corporation you worked at for 4 decades no longer honors the “lifetime contract”. They outsource and lay off every year.

• The union that kept your fancy blue-collar job for you, now exists to keep other folks out of a blue-collar job.

• That $2 million you have in your bank account is decaying from inflation, so while you may be just fine because you’re old, the young person needs to save $8 million just to be in your position by the time they’re your age.

Like everything, the reality is more nuanced, complicated, and changing than either side of the question likes to assume.

I graduated from college in 2011, nearly 15 years ago, in the rock-bottom of the Great Recession.

The national debt has gone from $15 trillion in 2011 to $38 trillion today.

But here’s the thing: 15 years before 2011, the national debt was over $5 trillion. 15 years before that, in 1981, it was under $1 trillion.

Do the math, and 1981-1996 was a 5x, 1996-2011 was a 3x, and 2011-2025 looks to be 2.5x. Inflation might make those numbers even better.

As bad as the national debt is (and it’s bad, no denying it)…the reality is that it keeps chugging along. In those 45 years several generations of Americans have gotten rich and retired.

In the middle of all of this, there have been dot-com busts, 2008 crises, 2020 shutdowns…

If I am being totally honest, I do not think there will be any material change in this pattern.

It’s easy to give up hope, as a young person, because everything looks bleak and you’ve never experienced money, career, or consequences.

On one side: yes, it’s hard work, and you can’t make any stupid financial decisions like A) spending all your money, B) sacrificing high income early on for “work life balance, C) divorce, or D) losing it on get-rich-quick schemes.

On the other side, if you just keep your head down, keep working, live moderately, it’s pretty simple: you’re going to be okay.

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After reading it as an adult I came to the conclusion that Rand, the progenitor of libertarianism, had probably never actually started a company, invested in a company, hired someone, fired someone, or made a whole lot of money. The ideas in her books are attractive, but they are not experiential.

This isn’t a book review, however: this is an ideology review.

Like many of my generation, those who grew up in the era of 9/11 and Afghanistan and Iraq, I was predisposed to be a libertarian. The reason that the clever guys of my generation became libertarian is that we were caught in between two nasty sides of the same coin: the Republican warmongers on one side, and the Democrat warmongers on the other side. Libertarianism was the only anti-war alternative.

When I headed off to college in 2008, we were fresh off a stretch of Iraqi disaster. For a few brief moments, Obama looked like the guy who would stop the war that Bush began, and so libertarians hipsters everywhere, engulfed in banjo music and IPAs and Chuck Taylors and Wayfarers, thought they might become Democrats. Then Obama began droning people left and right, ramping up the war, and his hypocrisy pretty much solidified the libertarians.

My problem with libertarianism didn’t begin by looking at foreign policy: it began at home.

Nobody can deny the cultural decline that seems to have started in the aughts and accelerated in the teens. Things just started being generally crappy. People became polarized. Music got bad. Comedies weren’t funny any more. Things got expensive. Above all, there was just some sort of oppressive vibe and the recognition that it just wasn’t great any more.

What I failed to put together, high on my ivory throne of laissez-faire total freedom, is that political frameworks which only function when people are good aren’t very great frameworks at all. The only reason the law exists, after all, is because nobody is good.

My libertarian friends still have the same rallying cries. I empathize with the root desires of these calls, but I can’t support them, because this ideology is not only pragmatically questionable, but perhaps even actually damaging to culture.

They’ll say things about the non-aggression principle, live and let live, laissez-faire markets, the illegality of stop signs, and “what they do in their private lives shouldn’t concern me.” I’ve held strongly to these principles in the past, so I understand the attraction.

The reality, though, is that people are aggressive, they won’t let you just live, they will cheat you in the markets, they will run stop signs, and what they do in their private lives never stays in their private lives.

And this is why I became an authoritarian.

There was a time, a decade ago or so, that I took the libertarian slant that national borders were artificial constructs. Who are we to say who can move? But that was before I owned a house. Now that I have a house, I’d much rather visitors come in through the front door rather than sneak in the window.

The greatest strength of libertarians (viewing others in good faith, with a rosy-hued view of the world) is their greatest weakness. Often, I wonder if the ideology simply obscures a lack of conviction in our beliefs, or a lack of courage to stand up for our conscience.

Whether it does so or not, it turns out that power is always a one-way street. If one does not assert themselves as the authority, someone else will (and has, for decades now).

We have been run over rough-shod because of this. As it turns out, if our morality isn’t imposed on the world, some bastardized alternative form will be imposed on us.

Ayn Rand’s philosophy of Objectivism contends that there is only objective truth and objective falsehood. I agree with this part. The massively huge flaw in her work is that it is essentially autistic: there is no real understanding of human nature that underlies it. Objectivism sees the world as a rigid spreadsheet formula: the unwritten assumption is that people should behave a certain way because the outcomes are better. It makes sense on paper, but who among us hasn’t known a hundred people who sabotaged their own lives through sheer stupidity, stubbornness, selfishness, or simply rolling the dice?

What Rand doesn’t really address, though, is that if there is truly only one objective truth, why shouldn’t it be enforced?

There is still a latent, idealistic strain laissez-faire living deep inside me. But, hopefully, I can one day extinguish it entirely.

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If I contribute to SS until I’m eligible to withdraw, I’ll have paid $732,591. If I withdraw as soon as I turn 62, it’ll take 12 years (age 74) before I start making a single penny. If I wait until full retirement, I’ll be 76. Moral of the story: withdraw as soon as possible!

This is fairly simple math.

You can start withdrawing SS “early” at age 62, but at a reduced monthly withdrawal for the rest of your life (around 30% less).

If you wait until 70, you’ll get ~30% more per month. But this has two huge downsides: you’ll have sacrificed 8 years of withdrawals, plus you just don’t know when you will die! Ends up, it is always best to contribute as little as possible and start withdrawing as soon as possible, especially since “none knows the day or hour” of anything, much less his demise.

Not surprisingly, posts like this attract naysayers from the woodwork. But I have done the math and they have not.

You’ll pay a lot in Social Security taxes, and you won’t get much of it back.

12.4% of an earner’s wage goes into Social Security. That’s not a small amount: over their lifetime, the average earner will pay $704,856 in Social Security taxes. That same average earner should expect to withdraw $383,000 from Social Security. That means he’s in the hole for around $321k.

That’s just the bare numbers. It’s even worse, considering that you don’t make interest on that money over the course of your career. If you had invested $704,856 in the laziest manner possible, directly into the S&P500, from the ages of 22 to 65, by retirement age you would have a staggering $10,704,933.

It doesn’t really matter how you massage these numbers. I’ve looked at them from front to back, top to bottom. Social Security is only “profitable” for low earners, and the reason it even works is because it is unprofitable for the majority of earners.

Social Security is only “profitable” if you make under $66,050/year for your entire life, and that’s not factoring in what you could have gained from investing it. It only works because it’s subsidized by every single person making over $66,050.

If you do the calculations considering opportunity cost: Social Security is not profitable at any income level. That’s right. If you pay even $1 in Social Security taxes, you are behind what you could have done by opening a Fidelity account.

Social Security is only profitable for someone who pays zero taxes.

Unfortunately, that accounts for 37.5% of working-age Americans who are not employed or looking for work, yet will still somehow collect Social Security benefits when they reach the age of eligibility.

That missing $321,000 that you won’t get in Social Security benefits goes to pay them: those who have never paid a dollar into Social Security, as well as helps cover the benefits for the share of Americans who are productive, yet made less than $66k a year.

Social Security is nothing more than a welfare plan for those who have never been employed. It is a penalty on everyone who ever paid a single dollar in tax.

What can you do about it?

Obviously, I would love if Social Security was abolished, but I’m not going to waste time dreaming of impossibilities.

I’d even accept a buyout: if I were able to accept a one-time payment of everything I’ve paid into Social Security, in return for not being able to withdraw anything at retirement, I’d take it into a heartbeat. For that matter, give me 50% of what I’ve paid in. While we’re fantasizing, just cancel my whole thing and keep whatever I’ve paid. It would literally be more profitable for me if I lose everything, but don’t have to continue contributing for the rest of my career.

I can do a lot more with that cash flow during the next ~25 years. Nearly anything would be a better investment. Simply buying an index fund would outperform SS, but honestly you could probably buy a Mickey Mantle baseball card or a Superman No. 1 comic book or a 1965 Mustang - pick your vice - and somehow be ahead.

So what can you actually do about it?

Often, business owners can convert from an LLC into a S corporation. Say your business makes $250,000 a year. Since Social Security taxes are only charged on payroll, you can give yourself a reasonable salary, say $100,000, and take the remaining $150,000 as distributions. You’ll only pay Social Security on the $100,000 salary.

For employees, there’s zilch you can do. If you’re in a position to take a lower salary and accept equity/stock instead of cash, that helps mitigate the issue, but this isn’t really an option available to lower income positions.

I suppose you could complain to your local governmental representative, but they’re too busy getting wined and dined by Pfizer sales reps.

Or you could simply stop working, lie down, and hold your mouth open below the faucet of productivity, which always leaks a few drips of cash in the direction of sloth.

Across any organization - whether governmental, corporate, or cultural - the people who make decisions are former gifted children, and it’s as bad as it sounds. The people who are directly or indirectly making policy decisions are, almost without exception, people who were formerly special.

Back in college, I had an entire friend group of gifted children. They were smart, had been told so, and because we still live in a nominal meritocracy, they landed excellent jobs right out of college. They were very serious people. They were very Mature.

I also had a bevy of friends who, to put it politely, were dysfunctional and immature kids who were failing out of classes, drank too much, and it was often a coin toss whether or not their cars would even start tomorrow morning. Our jokes were off-color. We were self-deprecatingly insecure about our retardedness.

The problem is that, 15 years later, the gifted children are still in those same jobs. And an excellent job for a 22 year old is not an excellent job for a 37 year old.

The dysfunctional retards now run their own thing, made hundreds of thousands off Bitcoin, own a few properties, have a family and kids, and don’t have to fill out requests for vacation.

The arc of the gifted child

Simply by benefits of IQ, the smart kid has it easy. They score well on tests, they’re precocious, they interact well with adults, and they probably do things like chess club or debate club. They take a white collar education track, they probably get a scholarship and into a good college, and almost without fail land a much better job right after graduation than any of the normal (or dumb) kids.

Of course you’d want these folks running your institutions, right? As it turns out, wrong.

The beginning of life is easy compared to the middle of life. When you win by default, you’re kind of shuttled along a fast track to mediocrity. There’s a lot of on-paper qualification, but it turns out that is not all that is required. You also have to have grit and determination and creativity. Developing this requires some level of overcoming adversity, which is hard to acquire if you’re the teacher’s pet.

At some point the giftedness is no longer a benefit, but a seagull hung around your neck. If you’re basing everything on qualifications and intelligence, the only way up is within highly structured organizations where you get promoted based on checking the right boxes and showing up on time.

The gifted children end up in governmental or academic roles. The sorts of bushy-tailed, wide-eyed people that “write policy” or “work in development” and “community activism” and take home a paycheck that increases by a 4% annually for the rest of their lives.

They do not start companies, because the statistical failure rate is so high. They do not go into blue collar work, because that is work. They don’t do anything unorthodox at all, really, because the system has worked so well for them that there’s no point in changing anything. They will probably accumulate certifications and degrees and eventually become a middle manager with various academic suffixes appended to their LinkedIn profile.

Near the end of their career, they work until the pension hits, and then they retire, which allows them to dedicate more time to activism. They find a few nonprofit or government boards to sit on, which lets them ban plastic straws and work to ensure that the local wolf population has been restocked.

The arc of the retard

I was not a gifted child. I was smart, but I was also retarded and weird. Right out of college, this was a huge problem. I couldn’t get a good job because I was not plugged in. I wasn’t very serious. I was too strange and angry.

The outcasts and misfits never fit in well in school. One professor (who actively hated me and my retard club) told me I was “mercenary” because I had three part-time jobs.

(Me and one of my dysfunctional friends splattered his car with eggs and Sharpied his cell number in every single public bathroom stall on campus. He had to change his number. I only admit this because I believe it is past the statute of limitations).

It’s pretty amazing what a villain like that can do to a guy, especially when you’re 21 and the only thing you have to your name is about $400 in damp twenties. What I lacked in GPA I gained in total disdain and a chip on my shoulder.

A lot of my other weird friends had the same path. We could only land the crappiest of jobs for years. But eventually it ate at us enough that after five or ten years, we started taking risks that the gifted child would never entertain. We started taking stands that the gifted child thought heretical. We started bucking the system, which somehow allows you to find cracks in the system that are wide open for the taking.

The trajectory of the gifted child is accomplishment > high status > stasis. The trajectory of the socially retarded is struggle > pain > achievement.

For the entire first decade of the retard’s career, we suffered under a bureaucracy of gifted children who did things right. In the second decade, it begins to flip. In the third decade, the gifted children work for the retards.

Simply because constant adversity creates chips on your shoulder, and eventually the doggedness wins out.

The gifted children still cause us pain. Their HR policies and progressive taxes and socially responsible behavior grinds our gears. They do not even like that we call ourselves retarded.

The glimmer of hope that the retarded have, though, is that the gifted children have no idea how angry they have made us. They are still very serious and mature. The retarded are still very unserious and immature. The gifted do not understand, and won’t.

If you’re retarded, you can likely commiserate with me.

The beauty about being retarded, as it turns out, is that you’ve learned grit, which is something that seems nearly impossible for the gifted to learn.

You just have to stick it out.

Then, eventually, you can put them on one of their very own Performance Improvement Plans.

This is the essence of all wealth: markets, assets, trade, invention, speculation, investment, commodities.

The smallest unit of wealth represents the smallest unit of work, which is ultimately the extraction of value from the earth.

We can quantify this smallest unit of work as a single motion: a single swing of an ax, a single stroke of the pick, a single pull of a hoe, a single toss of the hay-fork, a single throw of the spear, a single strike of a hammer. Every single other thing in economics is an abstraction developed from these small, simple actions.

For the purest description of this model, we must go back to the beginning.

A man faced with a plot of wilderness lives at the foundation of economics. At this foundation, it is mostly about survival. In order to feed a family, clothe them, shelter them from the elements, work must be done in order to simply survive. A garden is planted, food is foraged, animals are hunted, animals are domesticated and water is collected.

At some point, a homestead has a surplus of items and a shortage of others: this is where trade comes into play. One fellow is very good at mining rocks, so he trades these rocks with a neighbor who is good at hunting deer.

When enough homesteads have a surplus, facilitators of trade come into play: the village needs a general store, or a traveling tinker selling items here and there. Eventually, specialists develop: blacksmiths and miners and beer-brewers and midwives and barbers and tailors.

Of course, at some point barter becomes impractical, so the first forms of money develop. Money makes work more efficient: it’s a store of value, a medium of exchange, a unit of account. This is the genesis of coinage: a bit of copper, or silver, or gold, things that serve as a permanent representation of work.

Let’s fast forward to today, where it can seem that money can appear without work. It’s a mistaken assumption, because even the most vague and dubious job position is simply an abstraction layered on top of a single “stroke of the ax”. Increasing productivity and efficiency and stability is work: something that allows a single man to extract more value from the earth, like a tractor, only exists because of an almost unimaginable collective amount of work behind it.

A pre-industrial homestead is perhaps the purest form of work. A homesteader is engaging in direct extraction of value from the earth. But the instant this process is improved, it means that an incredible amount of work has been done to enable this improvement. A farmer who buys a tractor can perhaps extract 10,000 times more “value” from the earth, but that efficiency didn’t come from nowhere. The farmer buys the tractor from a dealership, who bought it from a manufacturer, who built it from steel and components, which came from a foundry, which came from an iron mine, which used jackhammers designed by an inventor, who perhaps had the luxury of spending time designing the jackhammer because he was already saved from a life of menial toil by other modern efficiencies.

Perhaps the farmer doesn’t have enough money on hand to buy the tractor outright, so he must leverage himself. This is where the entire financial industry comes into play. An investor, who has a surplus of wealth garnered over the years by previous work, deploys his wealth by offering loans to farmers. This investor sets up a bank, which makes money off risk. They make a calculated risk (this farmer is a productive individual who needs more efficiency) which allows farmers to buy a tractor at the cost of a few percent of interest.

It gets complicated fast. Sometimes these investors borrow money from wealthier investors. These wealthier investors are also putting their surplus at risk, so an entire industry of insurers, auditors, analysts, bookkeepers, security, researchers, and even ivory-towered academics spring up to support the surplus and movement of wealth.

But it all stems from a single thing: work. Extraction of value from the earth.

Every thing that you see around you is the fruit of this labor. If you have the patience and time, you can trace every single asset you see around you back to a single stroke of the ax, where a man chopped down a tree into firewood and then either used it to build his house or trade for food or smelt some iron.

Many of the societal problems of today stem from the fact that our work is abstracted almost beyond recognition. The work, for most of us, is so distant from the actual boots-on-the-ground extraction from the earth, that when you hear about despair or dissatisfaction with jobs or lack of direction, it’s because we no longer see our work as meaningful. It doesn’t feel like survival.

If you are sitting at a desk running numbers in Excel, it doesn’t really feel like extraction of value from the earth. If you are cooking fries in a fast food restaurant, it doesn’t feel like you’re part of the global economy.

Every job that exists is important, in some way or the other, because otherwise it wouldn’t exist. That doesn’t mean that every job should exist, or will exist forever — it just means that it exists now, and plays a part, however small, in the functioning of the world.

This distance from meaningful labor causes a significant amount of understandable frustration, and it’s often amplified at the lower levels of compensation.

And this is where the pragmatic part of pragmatic economics comes into play.

I am sure that the line cook, sweaty, plunging hash browns into the fryer for ten bucks an hour, finds it hard to establish his place in the economy when a line of luxury vehicles circles the restaurant to buy some hash browns with a metal credit card. But the pragmatic reality is that wealth comes from an efficient leverage of time and energy and intellect and work, and the doctor in the Porsche has benefited from that leverage.

It is an interesting pattern that folks who spend their lives in the highest abstractions of work often retire to a life close to the earth. I know of an oddly large number of folks who retired from mostly mid-level positions in Silicon Valley or Wall Street to live on a ranch or a farm, raising cattle or growing orchids or fishing trout. Very few folks retire in order to pursue a higher level of abstraction: with any level of success, they want to get back to the earth. To me this indicates some level of acceptance that abstraction is tough to deal with. Nobody wants to die doing pivot tables in a spreadsheet. (Nobody wants to die making hash browns either).

If you at all agree with this definition of money (that it represents value that ultimately comes from some form of work…even if it’s abstracted work) then it becomes very difficult to accept any form of economics other than capitalism.

With a few small exceptions, the more I dug into the data, the more I’m convinced. (Especially if you’re talking about the average financial advisor, which is a glorified franchisee whose primary goal in life is to sell life insurance packages).

I ran a couple comparisons, and to cut to the chase, paying a financial advisor will cost you between 30-40% of your invested wealth over the course of 30 years.

There’s a lot to dig into: the difference between Series 6 and Series 7 licenses, the amount of wealth/income you’re dealing with, and your own personal financial capability. But in most cases, I think that most folks need an accountant and tax attorney far before they ever need to pay literally hundreds of thousands in fees to a financial advisor.

The exceptions are these: A) you have so much wealth (as in the tens or hundreds of millions) that you need to set up a family office, or B) you are so inept with money that you need someone to manage your pocketbook for you.

In the case of A) you are likely competent enough to figure things out for yourself. In the case of B) the simplest solution is “spend less than you make” which, admittedly, is hard for many folks to do. Just hire a bookkeeper.

They come out of the woodwork

The instant you look like you’ve made at least three bucks, these guys appear out of nowhere. College acquaintances you’ve forgotten about pop up in your LinkedIn inbox saying things like “hey how’s it been going?” and if you’re not careful you find yourself having mediocre Tex-Mex with some bozo dropping scripted phrases like “have you considered your financial future” or “don’t let your hard-earned wealth suffer from lack of professional attention”.

I swiftly realized this game was unwinnable and that these financial advisors, a nebulous term which seem to solely be applied to former business majors who never did business, were tenacious in the manner that only a Tupperware sales lady can surpass.

I discovered, however, the magic phrase that makes Edward Jones, Ameriprise, and Northwestern Mutual disappear from your inbox forever. I started asking a simple question: “how much of your own money do you personally have under management?”

To date, not a single financial advisor ever answered this question.

It seems like a reasonable question. After all, if I were looking for a guitar tutor, I’d probably ask him for a little musical demonstration to make sure he knows what he teaches.

But this is all anecdotal, right?

Let’s do the math.

The biggest issue is cost of management. Popular wisdom says to find a fee-based advisor, not a commission-based advisor. This is irrelevant. It doesn’t matter.

Ameriprise starts at 2%. Northwestern starts at 1.65%. Edward Jones starts at 1.4%. In nearly every case, these advisors simply invest your money via their franchise guidelines into predetermined mutual funds.

Series 6 licensees can only legally sell mutual funds, annuities, and insurance packages. (The Series 6 exam takes 90 minutes). If you find a Series 7 licensee (the exam takes 3 hours 45 minutes) then they can also sell stocks, bonds, and ETFs.

Doing the math

A fee of 1.4% may not sound like a lot, but the compounding effect is massive.

Let’s create a scenario: you invest $100,000 into the S&P500 and hold it for 30 years. Scenario #1 is with an advisor with a 1.4% management fee. Scenario #2 is by directly buying SPY in your brokerage account.

Scenario #1: By handing over the reins to a financial advisor, with a 7.4055% average annual return, and a management fee of 1.4%, your $100,000 investment turns into $575,244.

Scenario #2: By simply clicking “buy” inside your brokerage account, with a 7.4055% average annual return, and no management fee, your $100,000 investment turns into $852,699.

This means that, for the exact same investment strategy, going with 1.4% at Edward Jones costs you an incredible 32.5%, or $277,455. Going with Ameriprise’s 2% would be even worse, costing an entirely unnecessary $359,516 in fees.

That’s like an extra starter home going straight to your financial advisor, instead of your kids. Half of a very nice beach house. A top-line brand-new Ferrari.

When does a financial advisor make sense, if ever?

Financial advisors do two things: manage your portfolio, and sell whole life insurance.

In order to be as fair as possible, I suppose that there’s a time and place for paying a financial advisor 30-40% of your wealth over the course of your lifetime. There are people who are truly absolutely ignorant about finances, and still make a decent income. If this is you, then perhaps having someone force you to save something, anything is worth it.

But in reality, it’s really just about self control and a little bit of basic math. The vast majority of Americans - especially those with decent incomes and no particularly destructive vices - would be far ahead if they just put a few bucks into an index fund and called it a day. (Ironically, if you had bought $100,000 of gold 30 years ago and just sat on it, it would be worth $775,200 today).

I would love to hear your feedback, and if you think I’m wrong. I may very well be.

I suspect pricing is actually a more simplistic calculation based on supply and demand, with a flavor of inflation rate. I’ll try to delineate my mental process on this.

First, you have to look at housing supply (units available, and units being built).

Second, you have to look at demand. How many people are in the market? One part of this is population growth (or decline). The answer to this also has to do with the health of the economy, wages, employment rate etc, but in reality I think the answer is always that everyone wants to live in a home.

And third, you do have to look at inflation. How much is the value of the dollar declining? Here’s how that affects pricing: the higher the inflation rate, the higher the nominal value of the house becomes. Regardless of how many dollars are printed, a house is still a house. It’s a store of real value.

So let’s take a look at supply.

• There are currently 144.9 million housing units in the United States.

• Approximately 1.68 million new housing units will be built in 2025.

The average occupancy rate is 95% (blending rentals and owned homes) which means that there are 137,655,000 occupied units.

Now let’s take a look at demand.

• In 2024, there were 132.22 million households in the US.

• In 2024, the US had a population growth of approximately 3,304,757. Since there is an average of 2.57 people per household in the US, this means a growth of approximately 1.3 million households.

• Most of these were from immigration. Because of America’s low birth rate, only 518,638 people (201,804 households) are from native growth.

There have been some drastic changes in the past half-year that I want to look at, because they directly influence demand. Here are some stats from the Bureau of Labor Statistics:

• Remittances to Mexico have dropped by 14% this year

• In July, the amount of foreign-born workers dropped by 467K (the number of foreign-born workers has been dropping for four months in a row) while the amount of native-born workers increased by 383K.

Here’s why that’s relevant to the housing market: native-born workers were already here, by definition. And the foreign-born workers are leaving.

The question of inflation is always ugly. I’ll use the official BLS CPI rate (even though the real inflation rate is higher, I’m too emotionally exhausted to go into that). Here are the official CPI rates for the last ten years: 2024: 2.9%; 2023: 4.1%; 2022: 6.5%; 2021: 7.0%; 2020: 1.4%; 2019: 2.3%; 2018: 1.9%; 2017: 2.1%; 2016: 2.1%; 2015: 0.7%.

This comes out to an average of 3.1% per year.

My napkin math looks like this:

• Relative housing supply can be interpreted as the surplus relative to the number of households, often expressed as a ratio or percentage.

• Initial relative surplus = (5,435,000 / 132,220,000) × 100 ≈ 4.11%

• New relative surplus = (6,913,196 / 132,421,804) × 100 ≈ 5.22%

• Increase in relative housing supply = 5.22% - 4.11% = 1.11 percentage points

From what I can tell, there will be a 1.11% relative increase in the supply of homes during 2025. On the surface, this would mean we see a 1.11% decrease in housing prices.

However, if we also consider that homes serve as a flight to safety in the face of 3.1% inflation (and assuming that, theoretically, a house is still a house) we must take this currency devaluation into consideration.

A currency devaluation of 3.1% means that, nominally, the house is worth 3.1% more (while still being the same, yet older, house).

A 1.11% increase in supply, with a dollar worth 3.1% less, informs my prediction a nominal housing price increase of 1.99%.

Interestingly enough, this coincides with the actual 2% YoY increase in housing prices as reported by the Federal Reserve (worth noting that Redfin says 1.0% and Zillow says 0.5%).

Of course other factors (like the big one, interest rates) come into play. At this point, apparently no one on earth knows when interest rates will be adjusted except for Jerry Powell himself. However, whenever this happens, I suspect it will have a greater effect on housing velocity rather than housing prices.

And obviously, a huge 2008-2012 style economic recession would obviously eliminate jobs and crash the housing market simply because of mass defaults.

(Even that would be temporary. The houses still exist. What we’ve learned, if anything, over the past few years is that lack of income never really stopped Americans from buying things they can’t afford).

Some other notes:

Obviously regional differences exist. Migration between states is massive. Some metros are blighted, others are growing. You obviously cannot compare Detroit (which somehow still has a huge share of livable homes for <$30,000) with Boise (where the absolute cheapest house is currently listed for $304,900 on Zillow).

As a side, often you’ll see some argue for a focus on building affordable housing, essentially demonizing luxury condos or custom home builds. This is a logical mistake (not just because they are economically illiterate, but because for every more expensive door that is built, it opens a cheaper/older door elsewhere).

In short?

I don’t think real estate is crashing this year. Or next. Or even the next.

Publishing is notoriously difficult. The average book only sells 250 to 300 copies in its lifetime. The average advance for a first-time book ranges from $1000-5000, and most books never earn out their advance. Competition is high. The stakes are low.

Yet, for several months I built my “packet” (a proposal, an outline of the book, selected chapters, information about my audience & qualifications) and sent queries in to just over 300 literary agents and presses.

I discovered mind-blowing facts about how publishing works. It is perhaps the most backwards white-collar industry that exists. Because it is an industry almost entirely populated by dinosaurs, it is gate-kept more than a NYC taxi driver’s medallion. People in journalism and media like to bemoan the fact that their industry is crumbling - but to be honest, I’m not even sure how it’s alive at all.

Out of those 300+ agents and presses:

• Some agents took 3+ months to respond

• Dozens told me that “submissions were closed” and I must wait until next year (for some reason, old school agents only read submissions from February-April).

• Many agents won’t accept digital submissions. You have to mail a packet.

• I received a single positive response, a helpful agent who ultimately ended up declining since the subject matter was outside of his niche.

Perhaps most confusingly and entertainingly, I received a rambling response from an angry lady named Maryann who clearly hated my guts for no specific reason. I saved the email chain because it was so bizarre:

Remember, the average book only sells 250 to 300 copies. At this point, I wasn’t sure how the agent model was even viable. I couldn’t figure out how they take the time to read 25-40 pages, sell 250 copies, and make enough to buy ramen.

So, I turned to plan B, which was self-publishing. I spent another few months paying an editor, formatting the book, creating diagrams, designing the cover.

We put it on Amazon and pulled the trigger. We launched. We advertised. We did giveaways. I tweeted, a lot.

As of today, we have sold a total of 13,468 books for gross sales of $228,956 (actual royalties are less, of course: $73,686).

That first book has since sold 7,546 copies, briefly making it to #1 on the online marketing Amazon bestseller list. Universities began to include it in the syllabus for entry level marketing courses (around two dozen universities ranging from Gonzaga to McGill to the University of North Texas). The Kingdom of Saudi Arabia referenced it in a government white paper.

It didn’t stop there: Building A Successful Micro-Agency sold 2,145 copies. Anya’s Beginner’s Guide To Google Ads sold 2,385 copies. My latest book, Unorthodoxy…never mind, nobody wanted to read that one.

Ironically, we were finally able to be traditionally published after a publisher reached out to translate and republish in French.

Considering our initial goal was simply lead generation for our business, I’d say that’s a wild success.

The book publishing industry was entirely blindsided by the internet, but here’s the deal.

The internet has been around since the 90s. If they haven’t been able to figure out how to click around on a computer for the last 3 decades, I do not really have much sympathy.

Best I can tell, with the exception of the very-large-name publishing houses, and a few niche presses, the book industry is going the way of the other print dodo, the newspaper industry.

Yet there are still people there, hanging on to the masts as the ship sinks further into obscurity.

One day, perhaps, the industry will be reinvented.

We don't run companies like this, so why countries?

In Ernest Hemingway’s The Sun Also Rises, there is a dialog about bankruptcy. “How did you go bankrupt? Two ways. Gradually, then suddenly.” It’s easy to become impatient, to become disillusioned and discouraged when things still putter along miserably. It's time to make some hard decisions.

But think about how fragile decision-making is.

Take any given person you know. How often do they make correct decisions? How often do you make correct decisions? I make mistakes every day. Sometimes it’s drastic mistakes like buying a BMW, and sometimes it’s significant successes like buying TSLA. (BMWs go to zero. Apparently TSLA keeps going up).

Now, extrapolate that bad-decision-making ratio out to 300 million plus Americans. If a single person can’t make consistently good decisions, how on earth can you expect every person in a country to make the right decision? It’s almost statistically impossible.

I’m honestly surprised a country can do collectively anything right, given the sheer amount of bad decisions that are made by every single one of us, every day. It takes something else to cause a tectonic shift. Something far greater than the individual.

But just like bankruptcy is usually the final compilation of many bad decisions, good things happen in the same way. A single good decision never fixed the world, but many, many small good decisions eventually result in a sudden shift towards good.

Democracy

I am no fan of democracy, because when it works (as it often does) it only works because at least 51% of people are making slightly better choices. The instant 51% of people make slightly worse choices, it all goes into the toilet for everyone.

There is a reason that no good company is a democracy. If you look at the most successful companies throughout history, they are not governed by mob rule. They are either governed by an autocratic leader or a very small group of autocrats on the board.

By all intents, Walmart is a successful company. But it is controlled by relatively few stakeholders. If you were to give over decision making power to every associate at HQ, or even worse every worker in each of the 10,784 retail units, it would swiftly become an absolute nightmare. Your workers would choose to get paid more, to increase benefits, to reduce working hours, and whichever other costly ideas you can come up with.

We obviously don’t let this happen. So why are we letting it happen to an entire country?

Here we are: a country where 60% of households get more from the government than they contribute. 180,000,000 people take more than they give.

If you look at the bottom quintile, it’s even crazier. The bottom 20% of Americans pay roughly $400/year in taxes, but take over $16,000/year in wealth transfers.

This 20% can vote just like you. If you’re in the top quintile (not too hard, a family income of $217,000/year) then you are part of the 66 million Americans in the top quintile who pay the majority of all taxes. These folks in the top quintile are paying an average of $54,000/year. You’re supporting almost four people in the bottom quintile. (This is only counting official taxpayers: the reality may be worse).

If Walmart — or any large company — were to give over the reins, I’m not sure how they would ever be taken back. At that point it’s sort of like taking candy back from a crowd of children.

Instead, Walmart, like any normally operating profitable company, is run by a relatively small board of directors, and indirectly by stockholders.

Stockholders have a vested interest in a company’s long-term success. Their hard-earned capital is on the line. They want stability and profit. They will not take a short-term benefit (vacation for everyone, free PlayStations) because they know it will curtail their long-term benefit (dividends and an ever-increasing share price).

Stockholders bear risk. And, interestingly, in public companies, every share gets a vote. If you own more shares, your decision has more weight in the future of the company.

So why don’t we weight decision making for countries?

Why does a net contributor (property owners, taxpayers, employers) have exactly the same decision making power as someone who isn’t even trying to work, yet gets housing and money and cell phones from those who are?

I’ve often thought that the simple solution would be limiting votes to those who are net contributors (i.e. anyone who pays more in taxes than they receive in benefits).

Ironically, if this happened, the pool of net contributors would actually increase. Since the productive class would vote to shrink entitlements, a whole lot more people would find themselves working, paying taxes...and thus able to vote.

The health of the country, as well as the economic health of the people themselves, would be far better in the long-term.

That’s a sobering stat. Makes you think twice about getting married, right?

But it’s also misleading. It does not mean your marriage has a 50% chance of ending in divorce. It means that half of marriages have a 0% chance of success, and half of marriages have a 100% chance of success. It really just means that 50% of people were bad at picking a spouse.

You have to be careful when you’re looking at averages. You have to look at context. You have to be brutally honest.

According to data from the Bureau of Labor & Statistics, a new business has an 80% chance of lasting for a year, and a 50% chance of lasting five years.

This is an interesting statistic, but not in terms of what you consider...the "likelihood for success” when you're starting a new business. All this tells you is that 50% of people have no business starting a new business. Generalized averages like these are not a metric you can use when deploying capital. There is no such thing as a “half alive” company: you’re either not doing anything, or you’re doing everything. You’re either running a vanity business, or you’re running a profitable business. There really isn’t an in-between.

Nobody starts a business in 2025 expecting a coin flip on whether they’ll be in business in 2030.

I know two guys in my town. They both started the exact same business (a coffeeshop). Let’s call them Thomas and Roberto. These guys started from the exact same position: neither had significant riches or resources, both moved from out of town, both had previous managerial experience in the coffee industry, and both started from absolute scratch.

Thomas’s business is thriving. Roberto’s business just closed down at a massive loss and significant personal non-dischargeable debt (thanks to a particularly ill-advised SBA loan).

If you were to ask me the chances of success, if each of these guys started up another location? If I were to average the two, there would be a 50% chance of success. But that’s misleading.

Thomas would have a 100% chance of a second successful location, and Roberto would have a 0% chance. The specific reasons aren’t really relevant, but suffice it to say if we were in Vegas, I would put my entire bet on Thomas. He would succeed. Roberto would fail.

Let’s look at physician income.

If you were to Google “what is the average income for a physician in America” then you’d come up with the amount of $239,200. Even though this is technically true, it is practically misleading.

Here’s the actual breakdown of physician income by deciles:

You can break this up many ways. Only 10-20% of physicians actually make an income in the $239k range. Around a third of physicians make far less, around $150k (likely residents, telehealth doctors, med clinic staff) but there is a significant portion (another third) of physicians making $500k-$1m.

I’m not sure that many doctors go into medicine with the goal of making $239k. It’s honestly not that great of a return (considering 8 years of higher education and the median cost of $442,384 to get a medical degree). Like most humans, they probably want to make somewhere in the top 50%, or even the top 5% of their field, which is $960,000-$1,900,000.

Doctors aren’t choosing their career path because of the median. They’re choosing their career path based on what they’ll be making after a few decades of experience, and perhaps going into a specialty. A highly paid garbageman makes more than the lowest paid doctor.

Shooting for averages gives you an average result, with average problems.

In September/October 2014 I was in Liberia during the Ebola outbreak (my first career was a full-time photojournalist/videographer for NGOs) and I was staying in the compound shared by Doctors Without Borders and Samaritan's Purse. I stayed in Dr Fankhauser's house (who later was named one of the TIME persons of the year) and photographed day in, day out, driving a crappy Mitsubishi Pajero around town.

The feeling in Monrovia was bizarre. No one shook hands, everyone bleached their shoes. Driving around, I was shaken down for bribes by police, paid bribes to guards to take photos in other places, all stuff I'd done before in other countries, but the streets were dead quiet (very different from the chaos I was used to in Western Africa).

On October 2nd (which happened to be my birthday) I got to suit up in a hazmat suit and go into the Ebola unit itself, an old church that had been converted into a 78-bed unit. I took a GoPro in, and still have the 1 hr 45 min footage. It was fairly gross so I will leave out most descriptions, but near the end I was helping a doctor by shining a flashlight on a lady while he stabbed her with an adrenaline syringe. I've never been queasy but I was hot. Encased in the hazmat suit, sweat literally filling up the bottom of my goggles, that sent me over the edge and I had to get out. Nurses stripped me out of the suit, spraying me down with bleach.

And this is where the distrust in media comes into play. As frightening as Ebola was, it is only spread by contact with bodily fluids. In Liberia, it was spread by a practice of embracing the dead (a ritual where the whole family would sleep in the same room as the body for a few days after death). Ebola had a ZERO percent chance of affecting most of the world, at least anywhere with a modern understanding of health and hygiene.

So here I am, fresh out of the Ebola unit, and a British Sky News team is set up filming a segment just outside the unit in a Land Rover. Here's the kicker: the reporter was wearing PPE and mask and goggles. But around 24 inches away, the cameraman and the producer were in flip-flops and shorts. It was all smoke & mirrors.

Then, I woke up at midnight Liberia time to dozens of messages and a call from my mom. I'd been on the six o'clock news, and my grandparents (who I hadn't told) called my mom asking why I had Ebola. An ABC reporter had written the most factually incorrect and technically deceiving story imaginable, and it had run on TV using an old Facebook profile photo. It got my job wrong, implied that I was bringing Ebola back home, and had gotten opinions from local doctors without even telling them the real details.

I had messages from folks telling me "they'd follow me around town wiping off every doorknob I touched, so their kids wouldn't die" and "let the Africans take care of themselves" and "who do I think I am?"

(I got the story taken down within minutes, after cussing out the director of the local ABC affiliate)

There were also decent publications which actually interviewed me and got factual data, to be fair:

But that didn't stop the paranoia. Flying back (I had to go through CDC testing in Atlanta) I heard that the news station had a crew at the airport waiting to ambush me when I arrived. So my dad met me, snuck me downstairs through a back elevator, and brought a bag of groceries to my apartment to last through self-imposed quarantine.

It was all ridiculous, honestly. Whenever you see someone on camera wearing a hazmat suit, I guarantee you, behind the camera is a guy in flip-flops.

On Reddit (where I engage regularly in PPC & agency related topics) I’ve gotten 41 messages this month alone…and of those, 37 of them were asking about SMMA.

To be honest, even though we published Building A Successful Micro-Agency earlier this year, I hadn’t heard this specific term. So I did some in-depth research. SMMA (social media marketing agency, also called “agency in a box”) is a term used by a few gurus — where they sell courses teaching you how to make millions without any specific skills or domain expertise.

This model is fundamentally broken, and the more I look into it the more scammy and misleading the whole thing is, but before I get into that I need to explain how this model is sold, and why I decided to spend the time writing this post.

First: there is nothing new under the sun. The gurus who are selling SMMA courses today are of the same ilk that sold dropshipping courses in 2018, and affiliate marketing courses in 2014.

Second: these gurus are taking advantage of ambitious, hard-working young people who want to work for themselves. There are better, legitimate ways to make money and find independence.

Third: you can learn marketing yourself, without paying anybody for anything. Actually, you can even get paid to learn digital marketing…which is better than spending thousands with these hustlers.

You can make good money in agencies…

Anya and I have been fortunate enough to meet folks in marketing (mostly in the Google Ads/paid search world that we live in) who have done very well for themselves.

Several of the micro-agency owners I’m friends with make well into the mid six figure range. Larger agency owners have high overhead, but they can still pull in a quarter million. And more than a few PPC agency owners have sold their agencies for seven or eight figures. Even freelancers can easily break six figures with a few decent accounts.

But these guys did not follow the SMMA model. They followed the old-school model of getting good at one specific skill, and then growing it, and making smart cash flow decisions.

How the SMMA Model is Sold

The basic idea is: 1) sell your digital marketing services to local businesses, usually via some sort of cold calling or cold emailing model 2) charge them “high-ticket” prices usually in the $2000-$5000 range 3) find a freelancer from a cheap country to outsource the actual work, pay them $200-500 and 4) rinse & repeat.

The model is sold by good-looking twenty-somethings wearing joggers and Rolexes. SMMA is promoted visually. By that, I mean in the most garish way possible. Young guys posing in front of private jets, getting bottle service at fancy clubs, letting scantily clad girls sit on the hoods of Lamborghinis…and if you want this same lifestyle, buy this $1500 course and you’ll become as profligately rich as they are!

If that’s setting off alarm bells in your head, you already understand why that raises red flags for me.

Because no one who actually earned a Lamborghini lets someone sit on the hood.

Heck. My E550 is ten years old, and I wouldn’t even let Princess Grace of Monaco herself sit on the hood.

The SMMA model is broken.

The SMMA model is fundamentally broken and it is not scalable, sustainable, or even economically feasible.

Here’s why. For a profitable, stable, and sustainable business, you need the following:

• You have to add value

• You have to have subject matter expertise

• You can’t outsource everything

If you are merely acting as a broker — connecting someone to another person — you simply can’t justify the sort of margin the SMMA folks say are possible. You aren’t adding much value. Platforms like UpWork and Fiverr exist to fill this need, and they’re making 20%, not 500%.

You also have to actually know something about what you’re selling. How do you guarantee results, sell cold leads on your service, and offer any real insight without knowing anything?

So why do people say SMMA works?

Gurus have been saying SMMA works because they are selling courses. But here’s the thing. I have yet to find a single guru who knows jack squat about digital marketing. They are just regurgitating the same basic information you can find for free on YouTube.

And it’s not like it can’t work. It’s pretty easy to land a few clients and make a few grand…for a month or so. It is easy enough to see mediocre results, enough to sell a few more course add-ons or premium memberships.

Gurus are slick. They promise things that everyone wants. The actual advice is super generic at best, ignorant on average, and misleading at worst.

But they live such a nice lifestyle!

The truly wealthy are shockingly low-profile, and in many cases you can’t even find information when you Google them.

Don’t get fooled by the glamour. Anyone can rent a Lamborghini, stay for a night in the Four Seasons, and hop on a private jet. All you need is a credit card and some fast cash. Usually the type you get by selling $1500 courses to how to get rich quick.

So how do you actually make money in digital marketing?

Slow and steady wins the race.

Couple reasons: first, writing a newsletter each week takes up a lot of time, and second, I simply don't have that much to say.

If you’ve ever watched an old pirate movie, and I hope you have, you’ll remember scenes in which pirates, stuck in the doldrums, are afflicted by scurvy.

They lay around on the deck, first weak and helpless, then depressed and listless, then their hair and teeth start falling out, and then unless they catch sight of land (and therefore, fresh fruit and vegetables) they eventually die.

Scurvy, of course, is a disease caused by lack of vitamin C.

Humans are one of very few creatures (along with monkeys, bats, capybaras, and guinea pigs) who cannot create their own vitamin C within our bodies. It must be consumed.

Sailors of old ate a diet of salted meat and hardtack (fruit and vegetables didn’t keep on long sailing journeys). Symptoms of scurvy start popping up about a month after you haven’t had enough vitamin C, so this was a sort of built-in range limiter for early seafarers. During the golden age of sail, it’s estimated that around half the sailors on long voyages ended up dying from scurvy.

Scurvy wasn’t relegated to sailing ships, but was also an endemic problem up throughout many cold areas in Europe. In late winter, after the last carrot and onion were eaten, scurvy would ravage Northern and Central Europe.

Scurvy still exists, although it is mostly relegated to sad circumstances: invalids, old folks who live alone, alcoholics, or people who don’t eat their vegetables.

See, although some amounts of vitamin C are found in most vegetables, the foods most rich in C are citrus, tomatoes, and potatoes…none of which are native to Northern Europe.

As a matter of fact, if you’re curious why nobody seemed to sail very far before 1492, it’s because potatoes and tomatoes had not yet been brought back from the New World. The only great source of C were citrus fruits (lemons, limes, and oranges) grown in Spain and Italy.

It’s interesting, then, that the first Spanish explorers both brought back potatoes and tomatoes…and introduced citrus to the Americas. Hard to imagine Florida or Panama or California without oranges, just like it’s hard to imagine Italy without tomatoes or Germany without potatoes.

But back to scurvy, and then the moral of the story.

The thing is, scurvy wasn’t understood. Nobody knew jack squat about vitamins. They just knew some things helped scurvy.

Eventually, the Royal Navy started handing out daily rations of a pound of limes and sugar to its sailors. Scurvy suddenly became a thing of the past (in case you’re curious, that’s why the British are called limeys).

It’s crazy, if you think about it, that something as simple as a vitamin deficiency can shape history.

Potatoes came to Europe. Suddenly, Northern Europeans not only could sail farther (potatoes keep for a very long time in the hold of a ship, unlike broccoli) but they weren’t nutritionally crippled each winter.

(If you chase this down the rabbit hole, eventually you wonder if the rise of the Hapsburgs, the Holy Roman Empire, the Scandinavian kingdoms, and England itself had anything to do with some extra vitamins…winter vitamins that were previously only available in the warmer climes of Spain, Greece, and Italy.)

But I digress.

The word “vitamin” wasn’t even coined until 1912.

A chronic failure of white collar folks — doctors, marketers, astrophysicists, MBAs, nutritionists, financial advisors — is that we don’t really like to recommend that which we do not understand. It’s a mixture of ego and fear. Some don’t like to admit they don’t know. Some are afraid of unknowns.

For hundreds of years, all scientists knew was that fruits and vegetables helped cure scurvy. But since they had no clue why, they came up with all sorts of quack remedies.

(For years, instead of handing out actual limes, the Royal Navy gave each sailor a dose of “Lind’s rob” which was a boiled-down concoction of lemons and oranges…and which unfortunately boiled off almost all vitamin C. They switched to actual limes and then colonized half of the world, I’m not sure if there is any correlation).

I’m sure that, without understanding vitamins, eating lemons or potatoes to ward off scurvy seemed like a folk remedy. Blue-collar ship captains knew more (from direct observation and experience) about the benefits of fresh fruit than the most academic of academics. But the reality is that actual understanding wasn’t necessary to take advantage of the power of the potato.

Like most folk remedies, complicated science is almost always buried within a very simple pragmatic reality.

In running a business, I don’t always know why my work results in a new client, but it does. I could spend a lot of time analyzing why, or I could just do more of the same…and get more clients.

In marketing, I don’t always know why a specific type of ad campaign works better than others, but sometimes it does…and I’d be a fool to not replicate it as much as possible.

I don’t always understand how my car converts gasoline into motion, but it does, and I’d be a fool to not drive around in my magical horseless carriage. I don’t always understand why I feel better after I go outside and take a walk, but I do, and I’m healthier because of it.

I’ve run into a few (thankfully rare) clients that don’t understand why certain marketing channels are profitable for them. They're hung up on understanding, way too process-oriented for their own good, and they create a stumbling block out of their inability to wholly grasp some aspect of their business. If they don’t understand it, they don’t like it. Even if it’s obviously profitable, they won’t double down on things that are clearly working, because they don’t know why it’s working.

Curiosity and knowledge are invaluable. Now that we know about vitamin C, we can more easily make sure we’re getting a balanced diet. It's nice to understand why we do things...but it should never actually get in the way of doing things we know just work.

Sometimes, like eating potatoes in the winter, you need to just do it.

P.S. If you know anyone who's weak and listless, perhaps it's scurvy lite. They've not been eating their vegetables.

It is purely coincidental that tomorrow is the twentieth anniversary of September 11th, an event that triggered two decades of violent changes that were all…without an exception…bad news for just about everyone.

But that being said…I’m not here to talk about politics, I’m here to talk about stupid people.

Last week, I skipped the Iconoclast (only my mother reminded me...I guess she finally subscribed to the newsletter).

My excuse is that we were quite busy — we had our Discosloth company retreat in Sharm el-Sheikh, Egypt. I call it a “company retreat” because the entirety of Discosloth (plus spouses) were there, we talked about things like Google Ads in between snorkeling and camel riding, and honestly what’s better than a tax deductible week on the Red Sea?

Sharm el-Sheikh is on the southern tip of the Sinai Peninsula.

Security is tight there, as you’d expect from a place sandwiched in between Israel, Egypt, Saudi Arabia, and Jordan. The authorities have even erected a border around the town — to prevent Bedouins from blowing things up.

As is common in most places other than the west, cars and shuttles go through security before being allowed onto hotel property. As we were heading back to the airport, I noticed that the guard was using an ADE 651 bomb detector.

I usually don’t know the names of bomb detection devices, but this one is unique.

You see, the ADE 651 is a metal rod attached to a plastic handgrip. No batteries, no electronics, nothing. Yet the manufacturer (Advanced Tactical Security & Communications Ltd) claims that it can detect explosives, bodies, drugs, currency, or animals…from distances up to 3 miles away.

The ADE 651 is nothing more than a dowsing rod…you know, the sticks that witches use for finding locations to drill wells for water.

These bomb detectors were created by a former British cop named James McCormick who sold these devices for as much as $60,000 each throughout the Middle East. The Iraqi government spent over $52,000,000 of your tax dollars on these devices (think about how many bags of rice that could have bought). The government of Jordan legally requires hotels to check cars with an ADE 651 before allowing parking in underground lots.

Anyone with half a brain can tell these things are a complete scam — right?

Before you think that only a bunch of rag-tag Middle Eastern governments were duped by the ADE 651, police departments in Belgium used it to detect drugs…the Hong Kong government uses them…and even the US Army was almost convinced, until they spent several million (of your tax dollars) running actual tests to prove its inefficiency.

(James McCormick has since been sentenced to ten years in prison for fraud, where he is currently languishing).

If you dig into the details of how ATSC Ltd says these things work, it continues to blow your mind with the pure stupidity of the thing. In order to ”program” the device to recognize other materials, do you know how you do it? You literally put samples of the material in a jar with a little sticker, shake it up, and let it sit for a few days…then stick the sticker on the device. I’m pretty sure a moderately intelligent toddler could see through this.

The interesting thing to me isn’t that someone scammed a bunch of governmental equipment purchasing departments. That seems pretty easy.

The interesting thing to me isn’t that governments were duped. That, also, seems pretty easy.

The interesting thing to me is that this security guard really believes that this thing works, and he is using this piece of plastic with a metal stick every single day of his life. Or does he know it’s just theater?

See, I have more confidence in a minimum-wage hotel security guard’s analytical skills than the entire Iraqi government. Yet this fellow, his manager, and the management of the hotel collectively decided they would rather arm their guard with an expensive dummy device than with something like…you know…a German Shepard?

So what's the moral to this story?

I'm not really sure...it's mostly just a bizarre tale.

But I think you can learn that...whenever you feel safe, protected, warm, and happy...you should know that smart people are protecting you.

Nothing is to be feared.

Just hush and move along.

Unfortunately, there is no instant antidote for incorrect information, usually since you don't know if it's poison or not.

I've read articles about life insurance, about how I can ensure my family's safety in the event of my death & dismemberment for only $18 a month, only to reach the end and realize it was written by one of those Northwestern Mutual fellows who send me LinkedIn messages about whole term life nonsense.

That's like drinking a bottle of something and then seeing the skull-and-bones on the warning label.

How much of what I just read was true, and how much was false?

The same goes when I'm researching precious metals.

One of the interesting things about PMs is that they're always referred to in terms of everyday currency. That makes sense, since I get paid in everyday currency and that is also how I afford to buy beer.

But when you're talking about a physical resource framed around wealth, I think it's a big mistake to focus on valuing a resource solely in terms of everyday currency. Everyday currency is so abstracted, so stratified, and so intangibly created that I think it's good practice to remove fiat prices out of the equation.

Anyway, back to research.

Often when I'm reading a piece about silver, gold, or rhodium, I'll realize that it's written by some company called Argent Bullion Investments Inc or something, and they don't even hide it. Usually there will be a coupon code like SILVER1776 or GOLDY2K or something.

And yet, these clearly-not-conflict-of-interest articles still manage to reference gold and silver in terms of fiat currency.

The problem is that these currencies can be endlessly abstracted, the M1 money supply can triple in a year, and at the end of the day you're still valuing a physical resource in terms of fiat currency.

So what is an ounce of gold really worth? And (to get to the subject of this newsletter) what is an ounce of silver really worth?

Back to bias.

I don't put a lot of stock into anything silver-related that's published by a company that sells silver bullion. I mean, they probably have an agenda. If I go to the Honda website looking at Honda Fit details, they're not going to be totally honest. The tagline on the Honda Fit website is not going to be Dull and Spiritless™.

Often silver bugs will attempt to arrive at the true value of silver based upon historical usage. But that doesn't make sense either. I read one article that tried to justify the current price of a silver ounce by what it could have bought in 1800 (a pound of coffee). Their justification was that an ounce of silver still buys a pound of very good premium single-origin coffee today.

That's just ridiculous.

A pound of coffee in 1800 was shipped thousands of miles via sail, for months, until it arrived in London and was promptly consumed by the elite. The common laborer was not drinking a few cups of coffee a day. They were drinking chicory root. Coffee was expensive.

Our productivity, efficiency, and global trade makes historical comparisons meaningless, which is why in 2021 I can go down to the grocery store and buy a pound of cheap coffee for a few bucks.

It's hard to discuss silver without talking about it in terms of fiat currency, but I'd like to try. Here's some facts.

For every 1 ounce of gold ever mined, there have been 8.8 ounces of silver mined.

For every 1 ounce of gold reserves identified within the earth’s crust, there are 18.75 ounces of silver (in other words, there is 1/19th as much gold in the world as silver).

Historically, when currencies were tied to a physical standard, governments fixed the price of silver at a certain percentage of gold. The United States set the price of silver at 1/15. France set it at 1/15.5.

Considering that the available (mined) silver in the world outnumbers gold 8.8 to 1, and that actual elemental reserves in the crust is 18.75 to 1, that seems like an accurate compromise.

"But," you say, "as you just pointed out up above. Silver is archaic. New days, new dollars. That's why silver is cheap, we don't need it any more! The world changed."

Sure, it changed. We need silver even more.

More silver facts.

Silver is the most thermally and electrically conductive of all metals

All the silver ever mined would fit in a 52 meter cube

Over 80% of all mined silver has been used or lost

Every solar panel and cell phone ever created required at least a little silver of .999% purity

So you're telling me we're going to go full green, we're going full renewable energy, and everyone's getting a cell phone every year?

Sounds like silver is pretty valuable.

Why, then (and here I go, talking about silver in terms of fiat currency) is the spot price of silver currently $26/oz, and gold is $1823/oz?

Silver, instead of trading at 1/15 or even 1/18.75, is now trading at 1/70th of gold's spot price.

I am not selling anybody silver - and I don't have anything to prove. I just think the math doesn't add up, and it's probably worth a little research and speculation.

Just be careful what you read.

It's hard to find information that isn't completely biased. Even if it supports my bias, I'd rather be reading the truth rather than a falsehood that happens to support my thoughts.

Because I'm not always right.

But I am right about silver being undervalued.