The Distribution of Value

Howdy from Durham,

Welcome to the 3 new subscribers from this past week!

Last week's newsletter on Thanksgiving questions was a hit with ~20 people replying that they used the questions at their dinner tables!

This week, we're expanding awareness around the way in which we distribute wealth.

5 Ways to Make a Living.

Before we get started, I want to be incredibly clear about why I want to build wealth.

Sure, I've talked about a barndominium. But really, more than that, I just want to control my time.

I want to build wealth so that I can make the time to coach tee ball/go to dance recitals for my future kids, serve the causes I care most about, and have awesome experiences with my family and friends.

Now, I recently started listening to the My First Million podcast by Sam Parr and Shaan Puri.

Each episode, Sam and Shaan brainstorm new business ideas and interview business builders.

In last week's episode, Shaan detailed his framework for how people make money in any given system:

1. Labor (worker bee) - does the hardest work and does the most work

2. Optimization (manger) - the person that goes into any business and makes things more efficient. You'll capture more value than the laborer but not by much

3. Performance (entertainer) - folks are paying for this person to deliver a unique service. Could be informative or entertaining, but the person has something unique about them to deliver to audience

4. Creativity (founder) - developing original things such as content or code which you have equity in

5. Judgment (investor) - making decisions to deploy capital to certain areas with expectation of return

The 5 ways are ordered from the least amount of value capture (#1) to the most amount of value capture (#5.)

Shaan goes on to note that, while this system doesn't seem fair, this is how value is distributed within our society today.

Here's the simple truth - ownership is the name of the game in our current system.

Those that have ownership from starting their own business (#4) or investing in others (#5) will capture more wealth than those making money using the other strategies (#'s 1-3.)

I believe that increasing awareness/education around how value is distributed within our existing system is the best way we can build a more equitable future.

Though, awareness of how the system works isn't just about money.

You can listen to My First Million on Spotify by clicking the link above.

Corresponding these 5 ways to my personal experiences.

After breaking down each of the 5 ways, Shaan brought up an interesting point.

More than just value creation ($$$), you need to consider which way of making a living gives you the most joy.

To determine what gives me the most joy, I thought back to the roles I've had thus far in my working life:

1. Labor (worker bee) -> busboy, server, data science analyst

2. Optimization (manager) -> product manager for AI portfolio

3. Performance* (entertainer) - podcast host, van build video producer

4. Creativity* (founder) - founder of this weekly newsletter

5. Judgement (investor) - N/A because I've only done basic stock investing

Now, #5 isn't applicable because I am not counting basic stock investing in this category.

I'm classifying #5 more as being an angel investor for other businesses. This would take a lot of resources (which I don't currently have), but it'd be super cool to be an angel investor in the future to help support up-and-coming entrepreneurs.

Let's focus on the applicable categories - #'s 1-4.

The roles I've enjoyed the most are categories #3 and #4 - podcast host, van build video producer, and founder of this newsletter. As a result of my joy for these activities, I believe that I've produced the highest quality work in these categories.

*There's just one issue - I've never made any money in performance or creative categories.

In fact, the only money I've made thus far has been in categories #1 and #2 (labor and optimization.)

We're going to change that.

Here's an example of #3 - performance. My van build videos on YouTube have been viewed 6600+ times for over 415 hours of cumulative watch time. I have no intention of monetizing this specific project of mine, but I love this type of work and need to build ways to monetize my 2023 performance projects.

Applying this exercise to my primary 2023 goal.

Why the heck does any of this matter?

Addressing these 5 ways to make money is a great way to frame my 2023 goal - develop self-sustaining income independent of a corporation.

We know that the most lucrative route in the short-term would be for me to get an optimization role as a product manager at a big tech or consulting firm...but my objective isn't maximizing my income right now.

My objective is maximizing service, equity, and joy.

So, what are the options I'm left with?

1. Labor - go get a bartending job somewhere while to pay the bills while I pursue performance/creativity on the side

2. Optimization - go get a Product Manager role at a big tech or consulting firm

3. Performance - get back into podcasting and monetize it

4. Creativity - A. write this newsletter, B. possibly start a new, monetizable, curation focussed newsletter for a specific niche, C. join an early stage start-up

5. Judgment - N/A as I don't have the resources to be an angel investor

3 things are certain:

1. I will continue to execute #4.A. (this newsletter)

2. I'm currently staying away from #2 (getting a PM role at a big tech or consulting firm)

   1. Note - I'm totally cool with going back on this thinking down the road, but I want to rip something more risky while I'm 25 and don't have to support a family

3. I don't have the resources for #5 (angel investing)

That leaves me with the following questions:

• Will I get back into podcasting (#3 - performance)?• Will I join an early stage start-up in 2023 (#4.C. - creativity)?• Will I start a separate newsletter with a monetization focus in a specific niche (#4.B. - creativity)?• If the right fit on the performance or creativity fronts doesn't come along, will I go get a bartending job to pay the bills until I find the right fit (#1 - labor)?

I don't know the answers to these questions quite yet, but I know it'll fun to be look back on this exercise in 3 months time ◡̈

Here's the piece I published 2 weeks ago where I presented my 2023 goal of building self-sustaining income.

What I'm paying attention to:

• Hayti, Durham - an independent black community founded after the Civil War. Freedmen who worked in Durham's tobacco warehouses lived here and went on to build Black Wall Street.

• Black Wall Street (Durham) - Tulsa, Oklahoma was well known for having a thriving black business community in the 1900s, but Durham also had it's own Black Wall Street during the late 19th and early 20th centuries. With Jim Crow laws in full swing during this time, black entrepreneurs had difficulty securing loans, insurance policies, and other services necessary to starting a business. Enter companies like the North Carolina Mutual Insurance Company.

• North Carolina Mutual Insurance Company - Black Wall Street's primary driver of success. In an era when predominantly white-led governments and private enterprises would not support black entrepreneurs, Durham's NC Mutual became a beacon of hope for aspiring businessmen and women. They provided the black community with the necessary financial and social capital to build successful businesses that helped families of color ascend into the middle class. NC Mutual went on to become the largest black-owned insurance company in the world.

Photos of The Week

Locations this past week: Media, PA -> Durham, NC

Screenshot of a reader's reaction to last week's Thanksgiving questions!

Got be a part of my first Durham tradition, the lighting of the Lucky Strike water tower!

View of downtown Durham from a co-working space that I was touring! Check out the outfield of the Durham Bulls' stadium in the left corner of this photo. So excited to go to games in the spring.

This might not look like much, but I have access to a full kitchen and bathroom. It's a major upgrade in amenities at my disposal when compared to vanlife. In fact, I'm going through reverse culture shock right now after transitioning out of the van...so I actually really dig the sleeping bag vibe. I pulled a similar sleeping bag stunt when I returned to college after working a summer on a ranch in Montana. Just ask my college roommate, Nick.

My Spotify wrapped. I spent over 2k hours listening to music/podcasts (~23.55% of my entire year)!! If that's not an indicator that I spent a great deal of time in solitude in the van, then I don't know what is - lol.

Thanks for reading

Which of the 5 ways of making money brings you the most joy?

Shoot me a reply and let me know!

Josh

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