Episode 257: Giorgio Ugazio (Mr. RIP): Life Design, In Progress

0:18This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We are hosted by me, Benjamin Felix, and Cameron Passmore, portfolio managers at PWL Capital. Welcome to episode 257. We have an excellent and unique episode this week. Typically, as people know, on the S episodes, you kick it off with a deep dive into something and then a book review, and then of course, a past episode look back. We're going to do the past episode look back with Ken French episode 100. For the book review. We're going to review the book, Designing Your Life, which was recommended in your interview in February with Giorgio Ugasio on the site Retire in Progress.

1:01The book was so good, we decided to invite Giorgio to join us. Anyways, the conversation with Giorgio was so good that we're going to let the conversation run. That's going to be the bulk of today's episode. I think it's really cool. Then after that, we will do the typical after show. And to be clear, it's not Giorgio's book, but Giorgio has taken that book and applied it very thoughtfully and deliberately to his own life. He's got a large following in Europe. His content talks a lot about stuff like this, about life design and living intentionally. His thoughts are incredible. The large following he has is very clearly justified as people will hear when he talks about this.

1:39And that's what's cool about it as a book review. It's the application, what he did with the book and other books, but to apply it to his life was really insightful. I thought so too. So we've continued to have people reaching out to us about working with PWL since we started talking about it more freely on the podcast. It's kind of obvious when you think about it. What did you expect to happen? We didn't really know what to expect to be honest, but since we've been more conscious about talking about PWL and the fact that we run this business that manages portfolios and gives people financial advice.

2:12We've had more people reaching out for portfolio management and financial advice. Kind of obvious when you think of it. As a reminder, we have relaxed our minimum asset threshold, which used to be kind of high. It used to be$2 million, which I think deterred a lot of people from getting in touch, but we've relaxed that pretty significantly. We still have some criteria for the type of client we want to work with, but it's much, much softer. We're happy to hear from anyone who may be looking for financial advice and portfolio management, anyone in Canada, resident in Canada. Exactly. With that, let's go to episode 257.

2:53Welcome to episode 257 of the Rational Reminder podcast. All right, let's quickly jump into this look back of an episode and then we'll get to Giorgio. So this week, just a bit of a backstory. So Professor Ken French was an incredible interview, episode 100. And I think it's safe to say, Ben, that really helped our little experiment here. Ken is a complete legend in the world of financial economics. So we were super lucky to get him on. And it was actually early in the pandemic. So it was in spring of 2020. And the conversation was absolute gold. Ken is a total class act. This conversation is a must listen.

3:28I think it should be shared widely. I've downloaded on my phone. I've listened to it many, many times. So if you've not listened to this episode, it is a must. You should go back and check it out. It's episode 100. And with that, let's go to my quick, hopefully one minute review. So to celebrate reaching episode 100, we had the good fortune of interviewing professor Ken French, who is an absolute giant in financial economics and is brilliantly clear communicator. We kicked off the conversation with his explanation of what an asset pricing model is and how research has evolved in understanding more factors that cause differences in expected returns.

4:03So much has been learned that Ken argues that there's no longer good reasons to invest in actively managed portfolios. This also goes for hedge funds. Since we recorded this in early during the pandemic, he argues trying to time the market is not sensible. However, your potential reaction to severe downside risk may be information you can use about your future portfolio decisions. You learn more about you than you do about asset pricing. His view on large money flows and indexing causing negative impact on markets was interesting. He also feels it depends on who is moving from active to passive.

4:39We also talked about his research into the factors and how even though the value factor didn't perform as expected over the past 28 years, there's still not enough data to say that it does not exist. These outcomes are possible. Talked about home country bias, stock buybacks, ESG, and why he has a financial advisor. And that was Professor Ken French in episode 100. Okay, Ben, let's jump over to our incredible conversation with Georgia. We'll do the book review of Designing Your Life, How to Build a Well-Lived Joyful Life, written by Bill Burnett and Dale Evans. All right, so we're going to do a book review this week, and it's a book that had a huge impact on me.

5:21It's called Designing Your Life, How to Build a Well-Lived, Joyful Life by Bill Burnett and Dale Evans. And for this book review, we thought we'd welcome a special guest, and we think this is going to be super fun. Giorgio Ugazio, Mr. Rip, welcome to the Rational Minder podcast. It's an immense pleasure for me to be here. It's an honor. Like I've been your follower since the beginning, probably. So where are you right now, Giorgio? I'm in Zurich, Switzerland, Europe, for those who think Switzerland and Sweden is the same stuff. So you and Ben go back now a couple of months. Ben was a guest of yours on your Retirement Progress event.

6:01It was an incredible conversation. I think, Ben, you're still up on Giorgio's homepage, retirementprogress.com. But that's my fault because I'm not blogging much. So it's still the latest news of my blog. That backstory is longer than a couple of months though. Goes back much further. He's mentioned my videos and stuff in his blog for much further back than that. And I've seen those blog posts. Even though we weren't communicating with each other directly, there was indirect communication going on for, I would say, years before that. I was watching every video you published. I thought it was a one-way conversation, but then I realized you were also reading.

6:41And that conversation was incredible. It's over two hours long and it's masterful. Both of you were just terrific on it. Off the top, Georgia, can you describe what you do and what is your website? That's a bit complicated. I'm 46 years old. I'm Italian. I live in Switzerland. By education, I'm a software engineer. I've been working in the video game industry, in machine learning, and maybe most notably eight years at Google as a software engineer. but then I kind of get a bit consumed by software engineering. And I also started blogging back in 2016 about financial independence and early retirement.

7:17That blog took off a bit. It took a while. In modern day standards, it took a while. But for me, it was a regular progression. And at one point, I launched a YouTube channel and also a Twitch streaming channel. And now I also do live streams and upload videos on my channel. And aside, I'm still a software engineer. I have a startup. And most importantly, I have three daughters, which is the main job. So yeah, I have three jobs. Being a father, startup founder, and content creator. Now, when you had Ben on with you, you mentioned a book in that conversation, Designing Your Life. That really caught my interest.

7:56So I went and dug up the book and I was just blown away by this book. It is so good. And I figured, well, if you're mentioning it on that conversation, it's probably worth reading and you were spot on. So I found out from you this morning that you have over 7 ,000 words of notes from this book. From the first three chapters. Incredible. So if you're interested, listeners can go check it out at mr.rip.dyl. And the notes are incredible. So congratulations on the work you've done on this. And as people will hear, you put a lot of thought into this subject. I'd like to set it up by just quickly stating the authors have pedigree in this.

8:35Bill Burnett is an adjunct professor and executive director of the Life Design Lab at Stanford. And Dale Evans is a lecturer at the Product Design Program at Stanford and also co-founder of Electronic Arts. So, Giorgio, give us your very quick summary of the point of the book. It's a bit tough to condensate in a simple summary of a few points, but I would say that the thing that hit me the most is that I'm a software engineer. I'm a nerd. I love mathematics. I love numbers. I love finance. So I used to think that every problem in life is a kind of an engineering problem. So something you have a function to maximize or to minimize or a clear goal or a lot of data metrics to be driven by.

9:20but many many i would say like the vast majority of problems in life are not engineering problems without design problems i always heard this word design and i thought it was something like okay the people that make a project like that design the next apple iphone or whatnot so design is something i always avoided facing directly but the book was really i would still say like life changing because many problems I try to face like by maximization approach, but the same problem is a problem where there's no clear objective metric to measure the solution quality. Should I stay in Switzerland or move back to Italy?

10:01Or should I keep this job or change job or change career? Those are the kind of questions that the book will help you face, not solve address, not directly resolved. So that's how the book most impacted my life. Well, of course, there is much more than that. For example, I would say that, as I said, design problems are problems we try to face with a different approach. And the book, Design Your Life, try to elevate this a bit further and talk about how to bring design thinking to your life. What does it mean? It means defining problems that will usually involve some iteration and reframing, how they like to say.

10:42So you might think you are solving problem A, but then you decide that it's not the actual problem you're solving. So you need to see from different angles, try to classify problems. There are problems you can't solve. Those are called gravity problems. There are problems which are weak in their nature. So they are trying to resist a solution. So essentially, you learn how to classify problems, You learn a new set of tools that you can use to try to face those problems. You learn also that one of the best ways to approach your problems is to try to prototype a solution and then iterate on it, test it and change the solution, change the problem.

11:24It's a nice mix of abstractions and practical aspects that I really love. For example, I don't know, I would like to give an example. You think you want to be a biologist. Why don't instead of just going to university for 10 years and then discover you don't like it? Why don't you prototype this life? Why don't you volunteer to go and offer your time for free and shadow somebody who's already doing this or chat with people who are already in this dream career that you think it's a dream, but maybe it's not. So prototype, not just plan and then execute. So that few concepts that really change your life.

12:00That example is what really hit home with me as opposed to saying, well, I love dolphins. I want to be a marine biologist. And you go through school and you find out after, well, maybe you don't like it so much because of certain aspects of the work. So you're absolutely right. Go and prototype that lifestyle. You could do that earlier in your career. I see Ben, you're nodding a lot. I mean, I agree. Of course, it makes a ton of sense. It reminds me a little bit about what we talked about with Ralph Keeney, that you kind of got to make sure that you're making the right decision. In the book, there is also like some practical chapter for people who are trying to look for a job or applying for positions.

12:36And there is like concrete examples. I think it's chapter eight or nine, a couple of chapters with specific concrete suggestions on how not to get a job, like sending applications randomly, but go on LinkedIn, find some people who are in the same area. So there are also like concrete examples, especially for the work life. I think they also wrote other books like designing your work life or there is now like a family of books i don't know if it's worth like exploring in deep each subject can you talk about in a little bit more detail some of the tools and processes that the book offers the first part the first few chapters are about self-assessment we say that how to approach a design problem but how to get a design thinking mindset in your own life it means that you need to know yourself a bit more there are several exercises.

13:24For example, the first one that I remember of, define where you are. So they ask you the basic questions. So where you are and how is it going? So where you are, you need to do a self-assessment. They offer four aspects in your life that they want you to go deep with a self - assessment and try to grade the quality of your life. They suggest health, work, play, and love as a simplification. I'm a bit more nerd, so I probably added four or five more. So you need to get a dashboard of your life. That's a nice idea. I love these exercises in general, not just this one, but this family of exercise, not because I then get some actionable insight, but because they force me to sit down and think and make a checkpoint in my life.

14:10I used to do like regularly once per month or like a quarter life review, or I have a series of not blog posts. I don't blog this but personal notes which is called where i am when i start writing where i actually am like physically i'm sitting at this desk and doing this today i just did that and then i'd zoom out and say okay this week has been like this then this month and my life where it's going what are my plans what are how i think i think it's if you abstract even more it's like stoic meditations something like this so the exercises suggested by even some barnet are it's a bit more simple more concrete is try to define the quality your life satisfaction in several areas that's the first one is where you are the second nice exercise is assessing your value so they suggest you two verticals which are your work view and your life view so what is work and what is life since i'm more nerdy i also added more other verticals and i for example i brought like money.

15:17As you know, I used to blog about personal finance, how this interact with life and with work. So I think it's part of the equation. You sit down, you take your time and you write your assessment of what is work for you, what is life for you and what is money for you. And then they say, define your compass. So something that guides you through life. And then you try to see how those aspects clash each other or how if they are aligned and this should be used as a guide. Another concept that they've write several times is that in designing your life, nothing is permanent. So you acknowledge that maybe here and then you want to review these things.

16:00So it's not something you wrote at age 15 and then it's still guiding. Your compass is still guiding you at age 50. You probably want to review that every few years and I don't know. That's something I was already doing. in an unstructured way. The book gave me a framework to operate with. So those are the main basic tools to start with. We are not designing anything yet. And then there are like a set of other tools that are just meant for facing individual problems. The most notable one for me is the Odyssey plans. And those are amazing. And when I read this book, it was like four years ago. Then I organized like a book lab around it.

16:39And we also shared with my readers. I was still not having a YouTube channel and we share the Odyssey plans. It was like an amazing exercise. I really suggest that you propose this to the rational reminder community. What are Odyssey plans? Essentially, those are amazing for people who are struggling with their career. They don't know what to do or they are too comfortable in their careers. And they say, hey, should I be that comfortable or try to push me a bit outside of comfort zone? So the author suggests you to write three plans for your next, let's say, five years or even shorter view, like two years.

17:16You decide. It's not written in stone. One plan is how you see yourself if everything goes, like if nothing changes. So what are the risks of not changing or what are the benefits of not changing? Then they suggest you to write a second plan that says, what if tomorrow you will be forbidden to do what you're doing today? Like you get fired or you lose your main activity tomorrow. What would you do? And the third one is usually go crazy. Write an optimistic, but not exaggeratedly optimistic, ideal future next two, three years where you do what you love and how this could work out. they seem like three unrelated plans but then the actual exercises try to take some aspects from one to another and maybe you end up like okay i'm keeping this job but then in the meantime i'm gonna start a blog about scuba diving because i like it and maybe this will at one point in life help me well those are like life-changing exercise for me so many questions in the beginning to ben's question in the book there's four areas you said you added some areas can you talk about what you did add i added learning i added money and i added creativity in general i think those three areas i may be curiosity but i don't see it here what's learning So yes, I added money because it's not in the list.

18:47My finance, how am I doing? How satisfied I am with my financial situation? So I added like curiosity and creativity, which is learning and creativity is like making stuff which are not necessarily related to work. Because I think like creativity and curiosity for me are like the basement of everything. I'm driven by those two aspects, like those two drivers. What is your hack, Giorgio? You're clearly very passionate about this as a model. Can you talk about how you live this? You dedicate a certain time or is it a daily activity? Like how does your brain work along with your calendar to do this?

19:25Okay, let's say that up until two years ago, I used to be way more self-reflective. I don't know how to say it. I used to journal a lot. I used to take notes on everything and read many more books or interesting articles, essays, or whatever, whatnot. These days, it's a bit more difficult. I have too many jobs and too many kids. I have a hard time, so I can tell you about the me in the past. Because the me in the present, the Georgian in the present is a bit struggling these days to find the same amount of undisturbed time to do the same things. I think it's temporary because my youngest daughters have sibling daughters, which are like 20 months old.

20:07So maybe one day I will have more undisabled time. How I used to work? Essentially, I love time blocking. I try to use the calendar to plan things. I think I'm really good at not letting myself be distracted too much. So when I focus, I really focus. I shut down everything. I'm a huge fan of Cal Newport's book. So probably you know Cal Newport's. So deep work or digital minimalism. So this kind of books helped me a lot. So yes, the process is like I try to sit down, I let my brain dump. So I don't try to overthink too much and let the hands go. I never had like writer's block. So it comes easy to me.

20:50That was my next question. Is it easy for you with an engineering background to kind of let go and move towards the design part of this equation? I must admit it was not easy at all, but it's getting easier over time. Maybe it's also age or whatnot. I'm taking life more holistically now. I used to be very focused on metrics. I still am, but it's getting easier. And I'm starting to appreciate more problems which are not easily solvable by maximizing a function. And I think value is there. The more we move on with like a humanity, the more problems which have solutions which can be algorithmically solved will be solved algorithmically by not people.

21:38So value creation will be eventually in trying to solve problems which are not easily defined and thriving ambiguity, which was the googly word for googlyness. I mean, I used to work at Google, so I was also showered with this. So we're going to jump into your thoughts, which are pretty incredible. So a big part of the book, and you mentioned this, talks about to understand your life view, your work view, and then how the two interact. So you had the idea of us sharing our own. And then when you shared yours, frankly, I was completely blown away by how much thought you've put into this. It really is impressive.

22:15I think it's worth taking some time to understand more about the process you went through and what your realizations are. So work view are basically the critical issues related to what work is and what it means to you, not necessarily what you do. It's what you want to get out of work, correct? Yes, exactly. I mean, dance is like a thousand words, my work view, which is like a half an hour of writing. I set up a Pomodoro timer, maybe 30 or 25 minutes, I remember. I think it was 30. And then I just wrote down and allow myself like last five minutes to review and edit a bit, but just a bit. I usually don't edit much.

22:56So it's a lot philosophical and it's the result of years of thinking about that. I can read it or. Real quick, because I don't know if people will have understood what you mentioned. Can you talk about what a Pomodoro timer is? Because I think that's a super valuable. So Pomodoro technique is like one technique to try to set boundaries of how you use your time productively. It's like 25 minutes, you work deep with no interaction, with no distractions. And then you allow five minutes break. I don't like this technique in general because it's like too rigid or like every YouTuber talking about productivity.

23:33They idolatry this. For me, it's just, I don't know, but I wanted to set a timer. So I say Pomodoro just because in the tool I'm using to write notes, which is Rome Research, I don't know if you know about it, you have like an API to just set that Pomodoro timer. So essentially, I just wanted to set a boundary and say, I allow myself like 30 minutes to write this. So that's the work view. Explain what a life view is and then pick which one you want to talk about first. Life view is essentially, I interpret it this way, try to write your philosophy of life so what do you want to get out of life i mean i expanded maybe a bit too much going to what i think is the meaning of life which is like a bit too much for this episode but essentially what the authors wanted you to write down is try to find what do you think a happy life i don't like to use happiness in general what do you think a happy life should be lived.

24:29So if you think you want to focus on spending more time with your relatives and your family or find something that gives you true purpose, I in general have a hard time separating work and life. So people who talk about work-life balance, I don't understand that. If you need to separate the work and life, you're doing a job that you don't like, which like many people are doing. I understand. But for me, when work is aligned with your goals, it no more feels separated to life to me. That's something I - We're both nodding. I aim to. We agree with that big time. If I need to say, okay, no, I need to separate work and life, I probably need to find a better job.

25:10Oh, what a line. So for me, my work view and life view are a bit merged. The meat is on my work view. I don't know if you want me to read it or try to interpret it a bit. It's easier if I kind of read it and comment it. Sure, please do. Yes. Okay. Then people can actually find the actual wording in the link you just mentioned. So sorry if this is going to feel personal or too philosophic, but I wrote it for myself. So don't think I'm trying to patronize anybody or whatnot. So what is work? For me, it is doing stuff with the purpose of building something that lasts. I know it's a very generic definition.

25:50It doesn't require getting paid, for example. For me, work, it's disconnected from money at this moment. It does require doing. So it can just be thinking, even though thinking is probably the most important part of what you do. But thinking alone, it's not work for me. For me, work is like you produce some artifacts. It And it suggests that building stuff is an incremental process, something that improves over time, your skills, your products, your knowledge, life of others, and so on. So that's my definition of what work should be for me. So doing stuff with the purpose of building something that lasts.

26:28Why do we work? We work because, in my opinion, we are genetically built to hedonistically adapt to current circumstances. If a caveman would time travel to today's time and maybe this person would say, hey, you have machines that produces food, clothing, clean water. Why are you busy all the time? You just sit down and relax. But probably this is also true. If we travel thousand years in the future, we will meet an advanced civilization, hopefully, and that have cured all the diseases. And we would say, hey, you've done everything. You live only mansions. Why do you still do things? That's because every time the situation is relative to your present life.

27:06So we are not okay with just sitting down and relaxing a life that even the poorest human being is living better than Julius Caesar. So we adapted and then we started from, it's a new zero and you want to do something. So that's why we work, in my opinion. We are built this way. We want to do stuff. I personally cannot even sit and relax for a short time. That's another problem. But I think as human beings, we are not wired to just sit and relax for a long time. I think it's a life not worth living if you just okay you've done everything you just wait you're waiting to die essentially so we work to satisfy our needs to give life some meaning here i get a bit more philosophical and people can be pissed off a bit i think work give us the illusion of having an impact of being useful of being remembered i say the illusion because i think a bit more nicholistic life has not much meaning but we get to decide what's the meaning to life so the illusion of immortality.

28:07We work because we want to build something that lasts because we have some illusion of immortality and a kind of purpose. The collective dance we play since the dawn of civilization is this one. It doesn't always have been like this. It used to be a necessity, a matter of survival, but it's not, I think, anymore the case. Today, most of the work we do is kind of bullshit. It's irrelevant, not aimed to improve the quality of life or solve huge problems. This collective dance, in my opinion, is mostly a status game. So people play status. And this is something that I realized that I see in the world.