Recap: The Last Safe Investment


I received The Last Safe Investment: Spending Now to Increase Your True Wealth Forever by Bryan Franklin and Michael Ellsberg when I was added to the Praxis Workplace last January. I only recently read the book from start to finish. On November 6, Michael joined the Praxis community for a special call discussing The Last Safe Investment.

This post is about the book and that call. The notes and my response will be mixed together instead of separated.

I highly recommend this book, go read it, it’s absolutely fantastic.

Bryan and Michael propose not just a system of investment, but a whole new way of viewing life. This is big stuff.

It’s important to first explain how Bryan and Michael define investing in this book. That is the first thing that is drastically different than the normal, conventional perspective.

Investing is not just money you use to buy stock, or pieces of other companies, to try to make more money and benefit from the money that company makes. If, instead, you buy something that not only benefits the area of life it was intended for, but other aspects of life as well, you invested instead of merely consuming. The example in the book is of going to see a movie. One person watches an action movie with friends and buys candy, popcorn, and soda. The other person goes with some friends to see a documentary and discuss it after; they buy water for each person. Assuming they spend the same amount of money, the documentary viewer invested in their relationships, knowledge, and health at the very least. Investing is, then, choosing purchases that benefit multiple areas of life, not just the original context.

The big picture: True Wealth is not just about money, but also tribe and advisor equity.  By investing in yourself, others, and meaningful relationships, you can save money and have a support network that will eventually allow you to retire when you are ready to do so.

When you invest in yourself, you learn and practice skills to increase your ability to create value for others. This, in turn, increases what you are worth to others and how fat your paycheck is.

With the money you have now, regardless of how much or how little that is, you can already start investing in yourself. Even if you can’t afford a class on sales or resources on marketing, you can start investing. When you go to make a purchase, think about how that will affect other areas of your life. How much happiness will you get? After the purchase, reflect on how much happiness you actually got. Was it more or less than you expected? Did you benefit in other areas besides the original context? If you think about this every time you make a purchase, you will hone the ability to purchase systemically (thinking about your life as a whole) and in a way that most increases your happiness.

This exchange of money for goods/services/experiences for happiness is called your Happiness Exchange Rate. By increasing the amount of happiness you get from each dollar you spend, you make it easier to spend less money. When you are able to properly evaluate how much happiness you will get from a given purchase and think about how that purchase will affect other areas of your life, you will cut unnecessary spending as well.

It might sound absurd that you can save money by spending it, but if you reflect on your purchases to see how much happiness you get and what the systemic affect is, you can do just that. I started doing this myself. I created a spreadsheet with Google drive to track my spending and reflect on what I buy.

The majority of the book focuses on learning Super Skills, skills that are widely sought after and valuable in almost every context. These are interpersonal, creative, technical, and physical. (The physical Super Skills first benefit you, then create a trickle down effect to others. By investing in your health, you increase your ability to create value in general.) Each of those categories has skills under them. They are skills such as sales, leadership, writing, design, mental modeling, building a marketing crank, mental focus, and a clean, healthy appearance.

Practicing and mastering a handful of Super Skills in various areas increases the value you offer to others. If you are skilled in both sales and building a marketing crank, for example, since they go together, you can increase the effectiveness of each. Because marketing is meant to gather sales leads, knowing how to sell can help refine your marketing approach. Similarly, if you know design and how to build a marketing crank, you can create better, more effective designs to catch and keep the attention of potential leads. At the same time, this increase in value creation will increase your paycheck.

When you are more valuable, you will also have more control over when and how you work and who you work for. By investing in more Super Skills and thereby having more value to offer an employer, you can find or make work you love and make money doing it. (This is related to niching down, for that go see my Recap of Niche Down by Christopher Lochhead and be sure to read that too.)

When you combine this increase in pay with a decrease in the amount of money you have to spend to be happy, you gradually have a wider and wider margin of excess cash. That is your savings. That is the money you keep for retirement.

The greater your Happiness Exchange Rate and the greater your paycheck, the greater your savings. Savings is one of the three True Wealth assets.

The second True Wealth asset is advisor equity. Unlike traditional equity, which is partial ownership of something physical, advisor equity is an exchange of advise or mentorship now in exchange for compensation later. It’s built by interpersonal relationships and the compensation is based on gratitude, not obligation. For example, if I volunteer my time to regularly critique a friend’s writing, they may later offer me something in return.  What that may be depends on what they have and what they wish to give. That would be informal advisor equity, because it is person to person.

Formal advisor equity is typically given in cases of help or advice to a business or its owner. Formal equity is called such because there is a formal agreement of a certain monetary compensation. That could be a percentage of ownership of the company, or a certain payout based upon the money being made. But it is a straightforward, written agreement that John owes Bob X amount at Y time based on Z condition or whatever the case may be.

Advisor equity can come in a multitude of forms and often result in experiences that wouldn’t be available to you otherwise.

The third True Wealth asset is tribe. This amplifies the effects of advisor equity, especially within the tribe. A tribe, as Michael and Bryan define it, is a group of 15-150 friends who all know each other and share the same close bond with each other. Instead of having scattered, individual friendships or a smattering of small friend group, it’s possible to build a tribe. Instead of splitting your attention between your various friends, your friends are friends too, so by strengthening your relationship with friend A, you also stregthen your relationship with friend B.

The strength of a tribe lies in the shared values possessed by that tribe. If everyone cares about the well-being of every other member of the tribe, when one person has a hardship, the burden can be split among every other member. When everyone is supporting each other, if someone wants to take a risk and start a business but has to cut as many costs as possible, they may be able to float between houses.

I mentioned that tribe amplifies advisor equity within the tribe. By gaining advisor equity with one tribe member, by virtue of their word and their experience, you can then also have advisor equity with other members of the tribe before you invest time helping them specifically.

Not only does tribe amplify advisor equity and act as a safety net, but it can also increase your Happiness Exchange Rate. When you spend time with people you care about, you gain happiness and fulfilment. When the people you care about all care about each other, you can gain more happiness and fulfillment from your relationships with them. Instead of feeling spread thin by attempting to maintain too many friendships, you’re more fulfilled because your relationship with each tribe member is also tied to your relationship with every other tribe member.

Bryan and Michael don’t just think their plan works, they and their tribe actively live and practice this in their own lives. They have seen it work for them and for those close to them.

Praxis exemplifies this model, this ideology. The program is all about investing in your value to others. That may only be one facet of True Wealth as described in The Last Safe Investment, but knowing how to invest in your value to others is a vital step towards True Wealth. Also, the book is part of the program, and now Michael’s talk is part of the program. Praxians are not simply taking in Michael and Bryan’s book and ideas and thinking about them, but actively subscribing to the ideology and principles in their own lives.

The world is changing, careers are changing, with the internet the world is more global and people are less and less bound by geography for jobs, friends, or anything. As that happens, the necessity of value creation and a personal safety net increase. Experience matters more than a paper credential. A tribe to support each other in good times and bad is vital. Advisor equity is a safer, surer investment than companies you have no control over.

You are your most vital asset. Investing in yourself, your network, and in your ability to teach others are the safest investments you can make today to have a plentiful retirement later.