Welcome to Recalibrating! My name is Callum (@_wanderloots) and this newsletter is an experiment to track my journey into self-employment while pursuing the path of self-actualization. In this Entry, we are going to move on to the second layer of Maslow’s Hierarchy.
Now that we’ve covered the basics in Entries 1-5, let’s continue on the path of self-actualization. If you would like to receive these Entries by email, the subscribe link may be found here.
Maslow’s Hierarchy Level 2: Security and Safety Needs
The next layer of Maslow’s hierarchy is security and safety needs. I generally associate this level with having a place to live and money to buy what I need (not want) in life. I need to be able to pay for food, debt, mortgage, and retirement savings.
Having quit my job (see Entry #1), I know that I do not have the luxury of focusing solely on the base level of the Burnout Recovery pyramid, I also need to earn income.
I want to earn income in a way that does not bring me back to a burnout phase like my last job. Additionally, I want to earn income while I am recovering from burnout. That is no small task.
However, I find that describing a big task can be counterproductive if it is too abstract. As I learned in the Procrastination Puzzle meditation series (more on the Waking Up app here) if a task is framed in a concrete, specific manner, we are more likely to associate the task with short term/immediate timelines. If the task is framed in an abstract way, we are more likely to associate the task with long term timelines, making it harder to accomplish.
With that in mind, I have two major abstract goals at this level of Maslow’s Hierarchy:
- generate sufficient income to satisfy my needs (food, debt, mortgage, retirement savings);
- structure a habit and task system that enables me to consistently build income to a level that meets my needs without burning myself out.
Before making these goals more concrete, I decided to review the #2 Entry of Recalibrating, including the pyramid of Burnout Recovery. As part of my Recalibrating experiment, I want to be reflective of where I’m at and how far I’ve come:
- I am now in my fourth week off from work.
- I spent the first three weeks focusing primarily on improving my physical health (as the base layer of the Burnout Recovery model).
- In this fourth week, I started feeling a desire to continue moving onwards, inwards, and upwards (see #5 Entry of Recalibrating).
Reviewing the Burnout Recovery model, I realized that I am now closer to the second level: Recharging the Mind. Fittingly, I think that layer corresponds to the second level of Maslow’s Hierarchy, of security and safety.
Now, back to the goal analysis.
Financial Security and Mental Safety
What does it mean to have “enough” to live? Based on the second level of Maslow’s hierarchy, I view the main factors as having enough to maintain health and safety, both mental and physical.
“Enough” is going to vary from person to person, depending on their goals in life and the lifestyle they would like to live. That said, in my opinion, enough will always have two components: (1) making sufficient income to meet needs and (2) generating the income in a mentally and physically safe way. If the income generation is not done in a mentally safe manner, it can lead to burnout or other issues.
Of course, many jobs have inherent hazards where mental and physical danger cannot always be avoided. That said, I want to focus on the many jobs that appear to have mental safety. Appearances can be deceiving.
Particularly, in the corporate world, there is a fundamental pressure to maximize shareholder profits at all costs, a trend that accelerated in the 80’s. This pressure tends to encourage management to do things “the way things have always been done” since the risk of the unknown future is not worth a potential drop in revenue.
Society is constantly in a state of change and growth. “The way things have always been done” is, in my opinion, not a mentally safe model to project onto employees, effectively saying that proposed alternatives (e.g., the way that works for you as an individual) do not fit within the model.
A feeling of exclusion, misalignment of values, general loneliness, and feeling like an “other” within a place of employment is not a mentally safe model.
Many people, upon realizing that they cannot operate in a mentally safe manner, begin reducing their natural instincts and intuition, suppressing elements of themselves and their personalities so that they can fit in. They do not want to be an outsider. They (very reasonably) do not want to lose their jobs.
However, this model does not foster long term productivity. It fosters a culture of burnout for the sake of efficiency, burning through employees to meet the bottom line regardless of their mental needs.
Again, I want to emphasize that not all companies are like this. Each company will have some variation of this monetary model and each person at each company will have more or less resilience to handle (or thrive) in these ecosystems. Many people are very happy and feel valued and mentally safe at their jobs, so this is not a knock against employment.
That said, employment is inherently hierarchical (pyramidical), with pay bands that reflect this monetary hierarchy. There is not room for everyone at the top. Instead, there is a salary cap that increases slightly with each step up the corporate ladder.
Accordingly, in order to reach the goal of having “enough” income, employees need to work to increase their base salary for many years, slowly increasing the amount they can contribute to retirement savings until they have enough to live the rest of their life without active income (aka retirement).
For many people, this saving process takes until at least the age of 65. Assuming they started working at the age of 25, that is 40 years of employment. The average lifespan in Canada (where I live) is 82, so that only leaves 17 years of freedom from income-earning requirements. 17 years seems quite small compared to the 40 years spent working. Additionally, physical health and mental acuity (sharpness) have both declined drastically by the age of 65+, so the quality of experience will not be the same as when you are 30 (my current age).
Again, there is nothing wrong with people who are happy with this income model. Until relatively recently (the last ~20 years) we did not have an accessible business model (mental model) to rival the corporate one. However, that changed with one of the most incredible technologies ever to come into existence: the Internet.
The Internet Economy (E-Commerce)
The Internet changed everything. EVERYTHING. We now have the means to instantaneously connect with anyone, any time, anywhere in the world (for the most part, there is an inherent inequality issue that I will touch on in another Entry). Even better, we have the ability transfer data across those connections.
Data is:
a collection of discrete or continuous values that convey information, describing quantity, quality, fact, statistic, or other basic units of meaning.
I want to draw your attention to two parts of this definition: values and units of meaning. Effectively, the Internet enables us to communicate value and meaning by the medium of data across the world, to anyone, anywhere, any time. Also, the communication can be synchronous (at the same time) or asynchronous (at different times). In other words, the communication can be in real time (a phone call or video call) or something like an email or a blog post, where the recipient can read the data on a time that works for them
Over the last 50 years, the value of data has been continuously increasing. More and more of the world’s economy is centred around intangible assets (not physical) rather than tangible assets (physical). As seen in this graph below, the value of intangible assets in the S&P 500 (an index of the top 500 largest companies on stock exchanges in the United States) has risen from 17% in 1975 to 90% in 2020.
That means in 50 years, the economy has increased the value of intangible assets by 430% 🤯. People are clearly shifting their focus to a more intangible world. It makes sense: the resource requirement for creating physical assets is drastically higher than that of creating digital assets.
Intellectual Property
This intangible world generates much of its value through one asset class: intellectual property. As an intellectual property lawyer and patent agent, I have been diving deep into the intangible world of IP for over 8 years and have seen how much value intangible assets can have.
Intellectual property (IP) refers to:
creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.
Pairing IP with the Internet Economy, we have the ability to use our minds to create intangible assets and sell those same assets through the connectivity of the Internet.
Companies have recognized the value in this asset class shift, away from the physical and towards the intangible. This recognition has led to the rise of the knowledge worker: people whose job is to think for a living. Knowledge workers deal with intangibles for almost 100% of their jobs, creating value out of nothing but their knowledge and experience. As people learn (gain knowledge) they transform that knowledge into something valued by others. I will go deeper into this topic when I discuss the concept of a second brain (a digital collection of knowledge), but in the meantime, I recommend checking out Building a Second Brain by Tiago Forte.
So how does this all tie together? How do intangible assets and knowledge workers apply to the first goal of generating sufficient income to satisfy my needs (food, debt, mortgage, retirement savings)?
We are in the midst of a digital renaissance, where people are paid to think for a living, paid to transform their knowledge and experience into data that is subsequently sold to those who value it. A digital renaissance with a foundation of creation.
Welcome to the Creator Economy.
Creator Economy
The Creator Economy is one that taps into a global market, has no cap in salary, and operates 24/7, working while you sleep. A market that is 100% customizable with whichever mental model you subscribe to. A market that can be automated to run in the background, generating passive income while you focus on other active income means.
As a creator, the business is you. Your personal brand and distribution of data dictate how the world perceives and values your creations. Your personal brand is your portal into the digital economy, leveraging the intellectual property you have created to monetize your dreams. You can compound this creation over time, building trust with your audience and credibility for your brand.
Note that I am including knowledge workers as creators here. Knowledge workers spend most of their time learning, taking in new information, and creating documents/strategies that bring value through intangible means.
If the Creator Economy sounds so good, why doesn’t everyone play the game? The answer: most people are afraid of the unknown, afraid of putting themselves out there online. I understand, I found it difficult to get started. It took me years to work up the courage to begin sharing my photos online and even longer to begin sharing my writing.
These blocks touch on a topic that is higher up on the pyramid of needs (esteem), so I will save them for a later Entry. To keep within level 2 and mental safety, there is (I think) one main reason that people avoid playing the online income game: the addiction of the attention economy.
To keep up with social media, we need to play by the rules of the algorithm, inhuman software that is insatiable (never satisfied). Like a Tamagotchi, if you do not feed the algorithm each day, it dies. Some social media algorithms want you to post 10 times a day, engaging for hours and spending your entire life within their digital ecosystem. This mental model trades burning out at a corporation for burning out on social media.
This is not the way.
Next Steps: Goal #2
What is the way? That brings us to goal #2: structure a habit and task system that enables me to consistently build income to a level that it meets my needs without burning myself out.
I will touch on this goal in the next entry, explaining how your personal brand can be structured to create a mental model that works for you. You can construct your own mentally safe business that operates in the background and generates passive income. It is not easy. This model takes a lot of self-reflection and development of esteem, but that’s okay. That’s why we’re on the journey of self-actualization together. Stay tuned ✨
