TGA Core Concepts- Resource Allocation

Jan 3, 2023 | The Vault

What could you do with an extra 2 hours a day? What about an extra $10,000 a month? There is an endless amount of possibilities that might be missed because of improper resource allocation. In this Guardian Academy core concept training, we will build on the previous concepts of recapture and reallocate as well as solving for your priorities through your Solvable Problem™. The end result? Helping you to get closer to what truly matters in your own life.

Listen: Apple Podcasts | Spotify

Table of Contents

    The Reality

    Most people are resource optimists, for example, you have:

    Time optimists– People who pack their schedule to the minute and don’t account for randomness to occur (traffic accidents, delays, etc).

    Financial optimists– People who budget everything to the penny and they don’t account for the randomness that might occur (COVID).

    Unfortunately, here are the realities of the world that optimists often overlook:

    Reality 1:Time And Randomness Are Undefeated

    This was first introduced in a TGA core concept training: Engineering Luck. Having these two against you is a quick way of putting asymmetry to the downside.

    Reality 2: Resources Are Not Unlimited

    We need to operate in the reality that resources are not unlimited. This means that you don’t have an infinite time to work, infinite money to test ads until you find the perfect one, or infinite energy to keep pressing max on the gas pedal.

    Find Some Shade, Sit The F* Down And Drink Your Water

    Nic Peterson provides a real life example of how an understanding of resource allocation can help you to win even if you’re not the “best” at something.

    He was competing in a pro strongman competition 12+ years ago and one of the best in the world, Vince, offered to help coach him through.

    The competition was outside in Florida and it was hot. Nic was walking around and observing all the other competitors jumping up and down trying to psych themselves up before the events. Vince asked “What are you doing?”

    Nic- “Just walking around.”

    Vince- “This is why you’re an amateur. Find some shade, sit the F down and drink your water. If you want to win you need to win all these events, every ounce of energy you spend standing around is energy not going to those events.”

    Nic ended up finishing first (not because he was the strongest) but because he had a mentor who understood resource allocation. As his competitors were jumping around trying to hype themselves up he was told to sit down, conserve energy, and hydrate. Nic’s energy levels remained relatively consistent through each of the events while his competitors dwindled rapidly.

    Resource allocation can be extremely powerful in all aspects of your life if used properly. Before you continue on be sure to revisit TGA Core Concepts: Recapture and Reallocate Overview and prioritization which will be apart of the Solvable Problem™ Overview.

    Reallocation And Priorities

    Now that we have an understanding of the base concepts: Recapture & Reallocate and Solvable Problem™ we can combine the two.

    One of the fastest way to recapture and reallocate is from your own priorities. When you prioritize without a consideration to resource allocation, time, and randomness you’ll fight an uphill battle.

    Let’s walk through a standard thought process commonly found outside of TGA of how to achieve what you want:

    Scenario 1
    1. Priority 1- 33%
    2. Priority 2- 33%
    3. Priority 3- 33%

    In 9 years you will have funded your Solvable Problem™. The more priorities you have the less resources you can allocate toward each in this process. If you had five priorities each would receive 20% of the allocation of your resources. This doesn’t account for time and randomness.

    Scenario 2
    1. Priority 1- 100%
    2. Priority 2- 0
    3. Priority 3- 0

    You can recapture the resources you were spreading out across the other priorities and put them toward the most important priority. Once that is completed you move onto the next one. In 9 years you will still have funded your Solvable Problem™.

    What’s the difference between the two scenarios if you end up fully funding your Solvable Problem™ in 9 years? The chart below will be a great visual representation.

    Comparison Of Scenario 1 & 2

    In 3 years you have nothing locked in for scenario 1 because you are spreading your resources equally 33%. In six years you have nothing locked in for scenario 1. In 9 years you will have funded your Solvable Problem™. This means that in 9 years nothing terribly unexpected can happen.

    Compare this with scenario 2, in 3 years you’ll have priority 1 locked in. If something unthinkable happens at year 5 you still have two priorities to solve for, but you at least have the most important one locked in. In 6 years if everything goes according to plan you have your top two priorities locked in. If on year 7 something like COVID hits and you lose your job, well at least you still had the first two priorities funded and can figure out the final one when things calm down.

    As opposed to scenario 1 if COVID hit on year 7 you would have nothing funded and now a bigger amount of stress as you have no current perceived way of finishing all three priorities.

    The best case scenario at year 9 is the same across both scenarios but what we have done with scenario 2 is locked in better worst case scenarios.

    Same upside, less downside. Engineering asymmetry to the upside, by systematically removing downside by recapturing resources going to other priorities and reallocating to the most important priority.

    Scientific Orientation

    It may look great on paper to be funding six different priorities all at the same time and maybe eventually completing them all, but this is a very fragile framework with a higher probability chance that you get none of them completed. Using the scientific orientation we have many ways of allocating resources through the lens of risk and probability, while accounting for time and randomness.

    Recapture from lower priorities, reallocate to higher priorities

    This will come as a gut check if you are hesitant to remove resources from lower priorities to devote to your higher priority (it might not actually be as important as you thought).

    Two Oreo

    This was covered in the Recapture and Reallocate training.

    3 Rhythms

    This was introduced in the Recapture and Reallocate training. You can build on the knowledge with this CCA Presentation, but this topic will be covered more in depth in the Wolf Pack Leader tier.

    The Barbell

    The barbell is a bimodal framework that we can utilize for risk mitigation. There is a reliable side and a side for asymmetry to the upside. Anything in the middle is pointless.

    An example of something in the middle:

    You bet a dollar to get a dollar but you aren’t actually sure if you will win. You could reallocate that dollar to something more reliable or something that may produce more upside. If this is happening in other areas of your life you can look to reallocate some of those resources. There are many versions of the barbell across various domains. In computer science, it’s termed explore and exploit.

    Should I spend more time finding more (explore) or do I lock in what I already know (exploit)?

    This will be the barbell we focus on today which comes from medicine.

    If 5 mg of an antibiotic will cure you, the minimum effective dose (MED), and you take 10 mg of the antibiotic you have now moved yourself to the middle of the barbell. Same outcome but now you take on more risk.

    Your goal is to maintain the way you look. You currently exercise 5 hours a week, but using the science of hindsight you would maintain how you look with just 3 hours a week. To change the way you look you would need to exercise 7 hours. This would mean at this point with your current goal you would be wasting 2 hours a week which you could recapture and reallocate to a priority that would be more effective.

    I Want To Improve My Business

    Let’s say that your business is not getting much better, your fitness has also been about the same, and your relationships aren’t getting better. You decide that your business is the most important aspect to you right now and would improve other domains if solved. You can evaluate how many extra resources you are putting into exercising and your relationships that you can reallocate.

    This might sound “bad” to remove resources from relationships but the fact is you are maintaining them simply by being in the middle anyways. You are now finding what the MED for exercise and relationships are so that you can recapture those resources.

    By recapturing those resources you can reallocate it to your business, moving it toward MRV (maximum recoverable volume), so that you can actually make a difference.

    After time has passed and your business is where it needs to be you can now figure out the MED for your business and reallocate those resources to improving your relationships.

    Bonus- Setting Sustainable Goals

    There is actually a prioritize, recapture, reallocate resources toward behavior. If you’d like to learn how to set sustainable goals for your life, in the embedded Youtube video at the top of this article you can find a bonus section starting at [20:16] on this topic.

    Here is an entire extra training on setting sustainable goals in the link below.

    6WU: Wisdom Comes From Multiple Perspectives

    Can you summarize your thoughts from this training into six words? This will help with your overall learning process. After you’ve done this read through what others have wrote as wisdom comes from multiple perspectives.

    Live to Learn. Give to Earn.

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    DISCLAIMER: These articles are for educational purposes only. Nothing in this article should be construed as financial advice or a recommendation to buy or sell any sort of security or investment. Consult with a professional financial adviser before making any financial decisions. Investing in general and options trading especially is risky and has the potential for one to lose most or all of their initial investment.