(This post is inspired by and derivative to the money is a solved problem thread and recent related discussions)
Preamble
Confession time. I "got into" Chess when I was in high school. Incredibly enough, my high school actually had a Chess Club, which I enthusiastically joined. I devoured books about Chess strategy in my free time, and I eventually competed at a couple of tournaments. Here's the thing: I wasn't any good. I know this because I was been beaten at said tournaments. Badly. At least once by a bored-looking elementary school kid who knocked me out in about 4 moves.
That being said, I do know a little something about Chess, and as it is my habit for unnecessarily extending metaphors, I'm going to attempt to frame ERE through the lens of Chess to see if anything interesting can be gleaned. If you know more than I do about Chess, which is highly likely, and I make a mistake, which is also highly likely, please correct me in the most strategic way possible.
A decent Chess game has three distinct temporal divisions: the first handful of moves are considered the Opening, the meat of the battle is the Middlegame, and the final cornering of the opponent's King is the Endgame. I'll consider them each in turn, slightly out of order.
The Opening
There are many, many possible games of Chess, but there are only so many ways to start a game of Chess. So it is with the pursuit of financial freedom and building your own personal economy. Indeed, of the possible ways to start a game of Chess, only a relatively few make much sense at all. This is because the Opening revolves around the following conundrum: you have a bunch of fancy pieces (neat!) stuck behind a bunch of laggard, clunky cannon fodder (ugh!). So the challenge is to develop a position where you can open up your ranks to make use of those fancy pieces without taking too much damage or getting stuck behind blocked, impotent peons. There are some efficient ways to do this (less moves is better), and they have all been extensively studied and given fun names (e.g. "Giuoco Piano","Accelerated Dragon").
In ERE, the Opening comprises the initial moves that give your fancy job income room to breathe. Again, there are some efficient ways to do this, including the basic, fairly obvious stuff like reducing unnecessary expenses, eliminating debt, matching contributions in 401k's, etc. At the end of a successful Opening (e.g. 21 day makeover, couple years emergency fund, "FU" money), the player is poised to take full advantage of the fancy pieces in his or her possession.
One aspect of gameplay that can show up an any time, but is a particularly spicy addition to the Opening are moves called "gambits". The idea behind a gambit is the intentional sacrifice of a piece for some advantage down the line. In Chess, an example might be to sacrifice a pawn so that you have a particularly favorable positioning of your pieces which you hope to capitalize on later in the game. In ERE terms, I would liken a gambit to using very aggressive crowbar maneuvers (or, as I call it in a previous post, the spaghetti method) or levering up on an income-generating portfolio.
The Endgame
If the Opening represents a rapid expansion of possibilities (divergence), then the Endgame is where possibilities rapidly contract (convergence). To have gotten to the Endgame in good position is to have already won. The real challenge here is to avoid drawing a stalemate and darker shades of waterfowl (see below). Beginners are drawn initially to studying Openings and Endgames because the possibility space is smaller, making it is easier to identify and wrap their heads around the principles of good gameplay, and the moves are relatively linear and transactional.
The ERE equivalent here is the 35X+ expenses, covered-by-multiple sources, runaway mode. Having many solid, diverse income streams that can each cover your expenses is like having several fancy pieces and your queen against the opponents king and a few pawns. You still have to play the game, but you're playing with your food at that point.
Chess has an interesting, if not rarely encountered, rule about pawns called "promotion". If a lowly pawn somehow trudges all the way across the board and lands on the opponent's back row, then the controlling player gets to "promote" this pawn to a higher ranking piece (typically a queen). Because this typically happens in the Endgame, when the board is cleared of many pieces, this represents either a white swan (if you get the goods), or a black swan (if your opponent is now considerably more powerful). In ERE terms, these would be events such as windfalls/inheritances (white swans) or uninsured disaster/unexpectedly large medical expenses (black swans).
The Middlegame
This is the real heart of Chess and ERE. In some ways, the Opening and the Endgame are formulaic and have a vague sense of "just going through the motions" because they are diverging from and converging to known states (the starting positions and "checkmate" respectively). But the Middlegame is where there is an explosion of possibility, and why it is so enjoyable to read people's ERE journals - there are just so many unique paths from Opening to Endgame. Let's explore this from the mindset of a beginner and a more advanced player...
The beginner:
For starters, the beginner often lacks a contextual awareness and may not understand that the Opening, Middlegame, and Endgame have different goals and priorities. As such, they often play in a purely transactional ("I take your piece - you take my piece") style. To this extent, their understanding of good gameplay is to know and identify as many tricks/tactics (e.g. a skewer, et al.) as possible, and try to develop a deeper search depth for possible moves ahead. Which isn't to say they are wrong - there are just more hierarchical levels to the game. They play locally smart, but globally unaware.
The advanced player:
The advanced player knows what the beginner knows, but adds broader perspective. In the Middlegame, a typical priority is having a general control over the center of the board. The logic is fairly simple: fancy pieces in the center of the board can move to (or attack) more squares. So if you control this space, not only can you attack more squares easier (and therefore provide more opportunities for clever tactics), but it also means that your opponent will have a difficult time opening up successful lines of attack if they have to crawl around the edges. What's that two-birds-with-one-stone idea again? Oh right - web of goals. This positional priority may not manifest as any singular move (which is why it is easy to miss as a beginner), but informs general decision making that shapes the course of the game.
The clear ERE analogues here are the lower Wheaton level tactics employed by beginners, and the more holistic, systems-level approach of the advanced. As Jacob mentioned in one of his posts, there is a nesting of facts>knowledge>wisdom. It's worth point out here that because I'm not extremely good at Chess, I can only wonder about what the extra tiers of gameplay are for the Grandmasters out there (to adjust your style of gameplay to match your opponent?? I have no clue).
Time
The last point I want to emphasize about ERE and Chess generally has to do with relevant time windows. Let's start with Chess.
As a general framework, you might consider three time windows:
- a single move (you move, opponent responds) = "near term"
- a series of moves chunked together as a group = "middle term"
- the whole arc of the Middlegame = "long term"
I would argue that the "middle term" is the most interesting and influential aspect of Chess gameplay, but also ERE. This middle term is: the full business cycle, the time it takes to master a new skill (or e.g. earn a Ph.D.), the time it takes for nature to start paying recurrent dividends (e.g. a fruit tree to begin bearing fruit), the time it takes for a hobby business/side hustle to start taking off, etc. From what I can tell, people spend a lot of time thinking about their financial life in "near term" chunks (e.g. hand to mouth/ gotta make it to payday) or "long term" chunks (e.g. traditional retirement at 65+ or... never), but relatively few emphasize the "middle term" (with the exception of maybe "saving for a house down payment/kid's college", which I think fits at middle term). One of the neat perks of ERE seems to be that it frees up and permits more "middle term" options, thus making for a more interesting Middlegame possibility space. When people study Chess games, which I can understand but not personally enjoy, I imagine that they are trying to identify and dissect these middle term moves in the Middlegame to get a flavor of the "why" and "how" a Grandmaster accomplished their goal. Similarly, in the ERE realm, it makes sense to pay keen attention specifically to the middle term Middlegame moves that people are making. That's where the juicy bits are. There are just as many ways to ERE as paths to win at Chess, and both wins and loses can be instructive.
Note: I neglected to incorporate en passant and castling, which play minor and major strategic roles, respectively. Any ideas?