#010: Matthew Effect and the first 100k

There is no need for willpower to avoid eating a chocolate if there is no chocolate.

Muhammad Tahir

Apr 04, 2021

Hello friends,

Welcome to another issue of my newsletter. This week hasn’t been productive, so I bring you news from Twitterverse.

Muhammad Tahir @iamuhammadtahir

@nusaybahox Our habits are influenced by our with environment than we give credit for

We give little consideration to the environment in which we live and work in. When making or breaking habits, little changes in our environment can yield results. When we think of the environment, we forget that the people we interact with are part of the environment.

Our environment isn’t only physical. It has the social aspect too.

For example, your friends you drink with. If you ever want to stop drinking, you’d have to avoid being in situations you are likely to drink. This includes being around them.

From my notes on note-taking,

Just like a lot of other things, it is not about who you are but what you do.
With a little bit of self-discipline and self-control it is possible.
However self control using willpower isn't sustainable.
Instead, we use environment to our advantage. Reduce the friction to get things done.
There is no need for willpower to avoid eating a chocolate if there is no chocolate.

Newton’s law of motion made Financially

mogwai. @LifeOfMogwai

i'm often surprised at how having money makes it easier for you to make more money. it's in the obvious ways (how you can invest in many potentially profitable businesses, thus guaranteeing even more future wealth)

This is Newton’s first law of motion but make it financially.

Can’t recall the law?? Gotchya

if a body is at rest or moving at a constant speed in a straight line, it will remain at rest or keep moving in a straight line at constant speed unless it is acted upon by a force.

An equivalent of this law is the Matthew effect.

The adage sometimes summarizes the Matthew effect of accumulated advantage, "the rich get richer, and the poor get poorer.

For to every one who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away.
from the parable of talents.

When you are going up, you keep going up, and when you are coming down, you keep coming down unless there is a force exerted on you by you or by an external being.

It is easier to get richer when you are already rich and vice versa. This makes sense with Charlie Munger’s words.

‘The first $100,000 is a bitch, but you gotta do it.

I don’t care what you have to do—if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000.

After that, you can ease off the gas a little bit’

Basically, accumulating the first $100,000 from zero is the most difficult part of building wealth.
Getting wealthy, he explains, is like rolling a snowball.
It helps to start on top of a long hill—start early and try to roll that snowball for a very long time.

And what’s going to stop a ball in motion?

'“Opportunities multiply as they are seized.” — Sun Tzu

I can’t remember the exact words Les Brown used, but it sounded like this. Work harder than you are paid, and in no time, would you be paid more than you work.