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life expected value
written by SAI
filed under MINDSET
published OCTOBER 29, 2023
TLDR
Align your actions and priorities with the Freedom STEM and use Luck Stacking to increase the chances of achieving these freedoms.
example statements
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“I’ve achieved my goals one after another but I have an empty feeling inside after accomplishing them."
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“I feel like I’m stuck on the hamster wheel and don’t know how to get off it.”
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“I am perceived to be successful on paper and from the outside but I don’t feel that way on the inside.”
INTRO
I was a math major so surprise, another math reference in my newsletters. This time, let’s take the concept of Expected Value.
Expected Value in simple terms is what the chance of an outcome is, taking into account all possible outcomes.
Formulaically, it’s expressed as
Expected value = Probability * Value + Probability * Value + … Probability * Value
From Britannica: “As an example, a game is created where the rolled number on a single die is the amount paid to the player, in dollars. The outcome from the roll of the die will be a number from 1 through 6. The probability of each value is 1/6, since each value is equally likely to be rolled.
This means that, on average, the expected amount to be paid out is $3.50.”
The logic behind it is there is a value associated with every action we take. And every decision we make is actually ultimately leading to increasing or decreasing the probability of some sort of outcome or desired result. Almost all the time, we’ll make decisions that we think will increase the probability of our desired result. I’m not saying we don’t make the best available choice given our options. I’m questioning what the desired result you want actually is. In other words, I don’t doubt that we’re always optimizing. I doubt what it is we’re optimizing for.
So then the question here is
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What should we be optimizing for?
The answer to this question is what many people actually mean when they say “successful.” If we increase our expected value, then we should theoretically be more successful. But the disconnect lies in what we think will make us feel more successful and what actually makes us feel that way.
The answer to what we should be optimizing for is the Freedom STEM. To summarize that newsletter and concept, there are 8 total types of freedom consisting of 4 categories and 2 versions. The 4 categories are
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Space Freedom
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Time Freedom
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Energy Freedom
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Money Freedom
The 2 versions are
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Freedom to
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Freedom from
Each category has the 2 versions associated with it, so 4x2 = 8. Whether we are aware of it or not, we are always optimizing for one of these 8 types. If you look at every action we take, and if you ask ‘why did you take this action?’, they can be traced back to one or more of these freedoms that you want to experience.
Now how do you increase what you’re optimizing for? i.e. increasing your expected value. That is the subject of the Luck Stacking newsletter. The main takeaways from that newsletter were:
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Redefine Luck: Challenge the traditional view of luck as a binary outcome and explore the idea of creating luck as an input rather than an output.
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Fundamental Attribution Error: Examine how we tend to attribute our success to hard work and others' success to luck, and consider reframing this perspective for a more neutral outlook.
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Gratitude: Gratitude is an input within our control that directly impacts how lucky we feel
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Four Luck Factors: Who Luck (people network), When and Where Luck (time and space), What Luck (skills and actions), and Why Luck (clarity of intentions).
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Luck Stacking: Increase your probabilities of success by taking action within these luck factors - luck is more about decreasing failure rather than increasing success.
what i am proposing
Now let’s combine these three concepts of expected value, the Freedom STEM, and Luck Stacking.
In the expected value formula, there are as many terms as there are factors. So in the Freedom STEM, there are 4 categories, so we’re going to have 4 terms. The 4 terms represent Space freedom, Time freedom, Emotional freedom, and Money freedom.
Desired result = Probability*Space Freedom Value + Probability*Time Freedom Value + Probability*Energy Freedom Value + Probability*Money Freedom Value
Side note that we’re going to only focus on the 4 categories of the Freedom STEM and disregard the ‘to’ and ‘from’ piece of it here.
What you are optimizing for here depends on the value you put on each of the 4 types of freedom. Rate them from 1-100, with them adding up to 100.
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For example, these are my Freedom STEM values currently:
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Space = 20
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Time = 40
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Energy = 30
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Money = 10
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How does knowledge of this framework impact my decision making? I left my full-time job in June 2023. I had been making more money each of the last 3 years at that job. But I realized as I started my coaching clients that I liked the process of coaching more than I did marketing at the startup franchise company, even if I was getting paid a small portion of my salary. In my full-time job, I had higher money freedom but less time and energy freedom. I realized my desire for this next phase of my life was to place a higher value on time and energy freedom than money freedom. So then making the decision to move on from that role was a straightforward one. (It didn’t make it any less emotionally easy, but I knew it had to be done).
The decision of moving on may not have been a good one if I didn’t have a gauge for what types of freedom were most important to me at that time. These are going to be different for you from me as well as compared to yourself at various points in time. Reassess these relative values periodically so you’re continuing to live in accordance with that.
When you’re able to quantify these freedom types, that’s when you’re able to actually feel successful (not just on paper), because you know what you’re measuring against.
Regarding the probabilities of each of the terms in this Life Expected Value equation, look to the Luck Stacking newsletter. Go in order of your freedom type values and brainstorm what ways you can increase your space, time, energy, and money freedoms.
For increasing your chances of space freedom, can you put yourself in different places and environments that is aligned with where you want to go?
For increasing your chances of time freedom, can you take something off the calendar or do a process with twice the efficiency?
For increasing your chances of energy freedom, are there people you can get acquainted with or can you take things off your plate that cause emotional stress?
For increasing your chances of money freedom, can you jump to a new job that will pay you more?
Knowing what your relative freedom type values are will help you prioritize which questions to ask first. For me it was “how can I increase my time freedom?”, followed by “how can I increase my energy freedom?” My mindset was if I do those things, then the rest will follow.
View your life as a series of actions that will increase or decrease the chances of your desired results. My challenge to you is to make those actions, chances, and desired results intentional.
what can i do?
Let’s revisit the things you’re possibly saying to yourself.
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“I’ve achieved my goals one after another but I have an empty feeling inside after accomplishing them.”
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“I feel like I’m stuck on the hamster wheel and don’t know how to get off it.”
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“I am perceived to be successful on paper and from the outside but I don’t feel that way on the inside.”
Luckily, all three of these statements have a similar series of steps you can take to answer them:
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Create the Freedom STEM values in your life currently
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What are the Freedom STEM values that you want to have in this phase of life?
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What are the actions to align you to those weights?
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What are the actions to increase your probability of each of them?
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Do you disagree that the Freedom STEM items are what you should be optimizing for? What do you instead believe you should be optimizing for?
Ultimately, what we’re doing is defining or redefining our goals in the context of the Freedom STEM types and increasing our chances of success to live a more successful life, in whatever way that means to you.
ABOUT THE AUTHOR
Sai is a Life Coach for Young Adults seeking to Live their Quarter Life on Easy Mode!