Index strategies for everyday life

Or, how to be a good NPC

I. 💰

In 2007, Warren Buffett made a million dollar bet that an S&P 500 index fund would beat the returns of an actively managed hedge fund over 10 years. He won, quite convincingly.

That is not surprising. Actively managed funds have always failed to beat the index, historically. When you add to this the fact that actively managed funds take more in fees than passive index funds despite failing to beat the index, it's clear that the real winners in the game are the active fund managers.

It didn’t take long for people to start recognizing this. As of 2016, investors worldwide were pulling more than $300 billion a year out of actively managed funds and more than $500 billion a year was being pushed into index funds.

Some $11 trillion is now invested in index funds, up from $2 trillion just a decade ago. As of 2019, more money was invested in passive funds than in active funds across the United States.

The reasons for this were obvious. Passive index funds are safe. They’re usually tracking a large number of the top companies in the economy, and since this is passive, if a company falls of the index, there’s always another large company waiting to take their place on the index. This means index funds will never really go to zero, and if they do, you would have far bigger problems to worry about anyway. Thus, the trend of investing in index funds makes a lot of sense.

It also makes sense to invest in some of the different indexes of every day life. While many may believe that it’s the surest path to mediocrity, that only NPCs invest in the indexes of life, there are clear advantages here & NPCs don’t have it bad at all.

But first, who is an NPC?

II. 🤖

An NPC is a non-player character, the quintessential average human, the person who is just like "everyone else". They always say what’s neutral & politically correct at the time all the time, they do whatever they’re told to do & whatever they see other NPCs doing, and they never, ever stand out from the crowd.

There's good reason for doing so. There are endless advantages in being an NPC, and those who have played an open-world game are well aware of this. The NPC isn't responsible for saving the world. NPCs have no enemies, and everything they’ll do is predictable. They won't be risking their life & fighting the big bad monster near a raging volcano to save everyone.

NPCs are safe. They don't stand out. They don’t take risks & they’re very careful to not step on anyone’s toes. They're investing in the index in all walks of life because that is the intelligent thing to do.

The index of life is all about diversification. It's perfect for the risk averse, for the passive, the conformists, aka The NPCs. And the deeper you look into it, the more being an NPC makes perfect, logical sense.

"出る釘は打たれる"

This is a Japanese proverb which translates to "The nail that sticks out is always hammered down."

Similar to this, is the “Tall Poppy Syndrome” which refers to the cultural phenomenon in which the masses tend to criticise or sabotage those who have or are believed to have achieved notable success in one or more aspects of life, particularly intellectual or cultural wealth, or simply those who are perceived to be different.

“The tall poppy gets cut,” and if you’re going to be the tall poppy, you’d better be ready to be blade-proof.

This is despite the fact that “Think different”, “Be unique”, “Embrace your individuality”, are sometimes common advice parroted by the NPC masses, who would themselves protest anytime someone really followed that advice. The more different you are, the more you’ll be saying things, doing things, building things that the NPC masses will protest against you, simply because that’s different & not necessarily wrong or bad. History books are filled with people who are loved and admired now but hated viciously during their time.

Conformity, despite being generally useless to innovation & progress, is quite useful in keeping you safe. NPCs are deeply aware of this fact. They've been programmed since childhood to follow the conventional path. Their parents, many of whom followed the NPC path themselves, rightly want what's best for their children.

Older NPCs are wise.

They understand that skipping college to start a cereal company based on political parties, is a stupid idea. This stupid idea can lead to a 50 Billion dollar business, but it is also a statistical fact that 9/10 such cases will fail.

Thus, NPCs are taught to diversify, to invest in the indexes of life, to take the path more traveled, to not take risks & always conform to the conventions. That's what they do, and usually it works out for everyone, and a new generation of NPCs are born, and the cycle continues.

It's easy to understand why this happens, as being an NPC is both the default programming & the one that’s forced upon you.

If you don't create a routine, you will be assigned a routine. If you don't create a career, you'll still have a career, but it'll be one that other NPCs choose for you.

In most cases, it's hard to go against the grain and it's doubly hard to go against the grain and move towards a positive direction. The indexes of life are alluring, safe & even logical if you really think about them.

Here are some of these indexes →

III. 📊

The College Index

Going to college is a vital signal that you were at least disciplined enough to show up to a place on a consistent basis for 4 years. While in college, not dropping out is also a similar signal. Dropping out or skipping college to start a business or switching careers are risky choices, as you can't really know whether that will succeed.

We tend to hear about how all the most successful people dropped out and started their own business like Bill Gates, Mark Zuckerberg, and the media loves to idolize & amplify that. What we don’t see, is the thousands of cases of people dropping out and because of dropping out, failing to secure a good job, failing to maintain a consistent routine of self-learning & thus, not developing any monetizable skill and ending up on a lower-income ladder for the rest of their life.

Thus, investing in the college index, despite the stories you hear about outliers who succeeded, is a good decision. Unless you’re sure about what to do, have a plan in place, and understand the consequences clearly, follow the college index that NPCs tell you to follow.

The Relationship Index

People generally follow their cultural index when it comes to relationships. If you're from India, there's a high likelihood you'd prefer an arranged marriage. If you're from US, having a baby at 22 sounds like an impossible decision now, even though that was the norm two decades ago.

This index changes with time & culture, but NPCs usually follow their NPC peers on what to do in terms of relationships. Venturing outside this index reduces your pool of potential partners, and by venturing outside it, you’d not just be taking a risk on the conventions of relationships - but on the conventions of a third of your life affecting even your kids if you choose to have children.

The relationship index is ingrained deeply in our societal fabric, and it’s success is visible because you’re alive and a product of it. Arrange marriages work because you’re matched up with someone on a similar social status like yourself who also believes in traditions enough to say ‘Yes’ to marrying a stranger that their parents chose for them. The “Till Death Do Us Apart” rites work, and a separation among parents, even if it’s mutual and cordial, has shown to still psychologically affect children. Love is intertwined with monogamy as the alternatives have historically shown to fuel violence.

Not investing in this index and charting a different path for yourself will not be easy. It might require tremendous amounts of time & effort to truly bring someone else on the same page about your special “relationship style,” if they’re not convinced initially. Maybe it involves never marrying and just staying together, maybe it’s polyamory, maybe it’s never having kids but adopting many, but even if your frame of unconventional relationship works, you’ll certainly face pushback from the NPC masses in the form of inquisitive questions at best, or disdain at worst.

The Job Index

NPCs are more likely to choose a "safe" job over one that is risky. For Indians, this is the highly-coveted "Government job", not because a job working for the government pays you well, but because it de-facto means you can't really be fired regardless of how bad of a job you do. For the west, it's usually big tech companies or large corporations, where the pay is high & the workload surprisingly lower than one imagines.

The NPCs who work in startups usually stick around for a 2-year-period and never more than that, just enough time to hit their vesting schedules, before switching to a new start up. These NPCs, despite giving the appearance that they're taking higher risk, are carefully building up an index of start up equity.

If one of these startups do work out, our NPC will be rich & ready to retire.

The Age Index

NPCs invest in the age index by following the age conventions that society thrusts upon them. Getting married has a deadline in most cultures around the world, and the range seems to be 30 to 40. Exploring careers has an age limit from 25 to 30 as well, but it’s usually expected that you’ll have figured out what to do for the rest of your life by now. Retirement has a conventional age that's 55-60.

None of these age conventions make logical sense. We're all going to live longer than previous generations, and that will slowly change such conventions over time.

But NPCs following this index will at least have other NPCs who can relate to doing the same. Doing something new & exciting like starting a business or getting that PhD, or travelling to a new country to explore that place for 2 years, are scary choices, and often a lonely endeavour. And if loneliness is as dangerous as smoking 15 cigarettes a day, the advantages of being an NPC is pretty clear here.

The Speech/Belief Index

NPCs collectively have made our world a world where if you say the things everyone says, have the same beliefs as everyone else, and think like everyone else does, that's somehow infinitely better than someone saying things no one says, having different beliefs or thinking differently.

Being different & expressing contrarian opinions is akin a crime and our NPC society has evolved to punish those who are different, regardless of the fact whether the contrarian opinion is right or not.

This is not a new phenomenon. People have been burnt at stake by mobs just like people will continue to be "cancelled", but thankfully, laws have evolved in most civilised cultures to protect free speech. This is because free thinkers are the ones who build things, who cause revolutions, who bring change, and change is always resisted.

Those who dare to think differently, are the ones who achieve what's thought of as "impossible".

Running a mile in 4 minutes was thought of as impossible. In 1954, that record was broken for the first time by a 25 year old. Months later, everyone was running 4-minute-miles. Unless you dare to think differently, you can't make significant & lasting progress, or bring about positive change.

Unfortunately, every such thinker had to face the wrath of the NPCs around them during their time. Facing such opposition, even from those close to you, is never fun. Things can get really complicated when society starts getting angry at you, and your thoughts & ideas, and nothing is off limits when they do. Sure, you're protected by "law", but does that stop the fringe lunatic from breaking into your house and breaking your things just because you pushed an update into your app that changes the way blue verification ticks work?

You can never truly be off-guard once you go against the tribe, and the NPC mobs are now far more efficient today running digital mass cancellation campaigns with likes & hashtags at their disposal.

Thus, investing in the speech / belief index, adopting every collective belief that the majority holds and never speaking anything that goes against your tribe of NPCs makes perfect sense. You'll live a peaceful life. Your family will be safe, and you'll always have a tribe to fall back on.

The Time Index

NPCs have done a pretty awesome job of defining time, and adding limits & conditions to what you do with time. A Science degree takes the same amount of time as a degree in English Literature. Schooling takes exactly the same amount of time for everyone, regardless of how intelligent they are, or what their personal circumstances are. The legal age for drinking is the same for everyone, regardless of their personal tendencies or addiction profiles. You're supposed to work for exactly 8 hours, and just on weekdays, regardless of what you want to do. None of this makes any sense.

But societally-defined, or NPC-defined time conventions are what you must obey. You must invest in all the indexes to be truly aligned, and follow them to the T, to get the most benefits. If you don't, every thing falls apart. Your NPC friends don't want to know you're going to college at the age of 33. Other NPCs will look down on you if you don't celebrate being 21 with a drink. Your social life will die if you choose a job that only makes you work Fridays to Mondays.

Investing in all aspects of the time index also ends up placing you in a routine, regardless of whether you choose to structure this routine or not. Routines are a by-product of habits, and you'll be held accountable for these routines, which means you're more likely to stick to your habits. Not everyone has the willpower or discipline to do the same things, every single day, and show up consistently, but that's what's required to be great at anything.

Not investing in the time index would mean not being held accountable by others, and while it gives you the freedom to choose what you do with your time, it'd also require a lot of discipline to stick to routines & self-imposed schedules without any accountability.

The Sleep Index

NPCs have done a brilliant job by convincing the world that "We all need 8 hours of sleep" is a universal truth. NPC scientists and "sleep experts" have written books about it, cleverly modifying experiment data to fit their hypothesis, and carrying out this deception in broad daylight. These experts aren't shamed by scientific community, however. They're glorified for putting out absolute garbage like if you don't get 8 hours of sleep, you can get anything from heart attacks to cancer.

How much of that is true? None of it. How much sleep you need depends on you, your unique circumstances, and your situation at the time. I firmly believe that this lie does more damage to people than good. Some people clearly need less, some clearly more, some may actually need 8, and until you find out just how much you truly need, you'll be waking up to alarm clocks that annoy you and wondering what went wrong with your life.

However, investing in this index has its perks, for the same reasons as every other index on this list. It helps you be at one with the NPCs. If you function perfectly fine after 6 hours of sleep, you'll be waking up early in group vacations, when everyone's getting their NPC-mandated 8 hours but you're the only weirdo awake with nothing to do. If you follow a biphasic or polyphasic sleep schedule, that's even more trouble, as you won't have any semblance of a normal routine, even though you'll have a lot more time.

Thus, investing in the sleep index makes a lot of sense especially if you don't want to be lonely. If you don't have the means to experiment with different sleep schedules, or if you're already used to the sleep index & have no problems following it, changing it might not be a great idea.

IV. ✨

While I plan to advocate against being an NPC in the next essay, it's not hard to see the merits of investing in these indexes. Regardless of what people tell you, the wisdom & conventions of the crowds has been responsible in keeping you alive till now.

If you're an NPC, and you're statistically likely to be one just like I am, notice how logical all the above ideas sound. They consist of tried & true indexes, collective wisdom from the crowd of NPCs who iterated throughout history to arrive at exactly the right conventional norms that makes human life better. It's certainly not a bad way to live, and you'll never be alone as there will be countless others like you who are doing the same thing.

Remember, it is better to be an NPC than to be the main character in a tragedy. This is real life we're talking about, not a video game. Taking risks has consequences, and there are no save-files to go back to.

And let's be honest, we're all NPCs in one way or another. There are no main characters on a long enough time scale. Think about any main character in the last 1000 years, and they've all been NPCs during their time alive, from one perspective or another, to someone or the other.

There are also a lot of people who should invest in these indexes, for their own good, but they don't, nor do they take risks that have any upside. Instead, they're the ones who do the opposite. They take risks with confirmed downside, often preferring the hedonistic route of immediate gratification. For choices such as choosing to drink & drive, trying Heroin & other addictive drugs, cheating on your spouse → it's always too late to fix such mistakes. Don't do this.

There's no reason to believe that taking risks in all walks of life and refusing to be an NPC everywhere is the right course of action for every body. Sometimes, it's better to follow the path laid out by wiser NPCs, and there's no reason to look down on anyone who does. Just like investing in the S&P 500 is a better decision for a lot of people over picking individual stocks, a diversified portfolio of life's everyday indexes may just be a good, safe strategy for a lot of people.

Having said that, I believe that there's a better strategy than the index strategy. A strategy that makes sure you're not a total NPC, but also prevents you from being the main character in a tragedy.

That's what I'll explore in the next essay.

Stay tuned!