Episode 14: What are Complicated and Complex Systems?

ABOUT THIS EPISODE

On this episode of the Build Your Life Podcast with Financial Expert John Browning, we're discussing how to understand complex adaptive systems.

Listen in as John gives some insight into the often complicated world of complex adaptive systems and how multiple inputs can adapt to one another when it comes to finances. If this sounds like a difficult topic, John helps make sense of it all on this episode. Tune in for more!

For more information, visit www.GuardianRockWealth.com to learn more about what John can do for you.

Welcome to the building your lifepodcast with John Browning building your life is a relaxed and uneditedconversation with financial expert, John Brownie Johns, the founder ofGuardian Rock Wealth, an Lake Forst Illinois he's also the author of thebook, Build Your Life, not a porfolio, a guide to your financial future basedon your personal values. Now you can purchase John's book on Amazon or youcan stay round to the end of today. Show and I'll. Tell you how to get afree copy milk right to your door. I might he tolon your host for the nextfew minutes, as we chat with financial expert business owner and author JohnBrowning Hi John. How are you buddy doing great? How about yourself, good,Hey, I couldn't be matter. I used to run around with tha guy andHi said. I couldn't be better if I were twins or something like that hike Iwasat Tho stop an go. What do you mean by that? But anyway, that's how I'm doingtoday it's a wonderful day and we are still in the midst of Covid nineteen and allof that I believe it's getting ready to...

...get passed behind us. It's been a very complex issue worldwide pandemic andpeople have had to adapt to different situations, different work,environments, different living environments and all kinds of you hadto adapt of living in Hawaii for a few weeks versus the ChicagoLandari. So a lot of complexities, and today I wantto talk about some complexities in the financial world. So we want to talk about a phrase that youuse a lot. You wrote about it in your book and I want to. I want tounderstand it here. You talk about dissecting. The complex adaptive system. Help me understand that. Well, I think first, it's better totalk about what's a complicated system, because people get these two mixed up alittle bit so, if you're talking about a complicated system, just to give youan example of what that might be is...

...maybe call that a car, so the theengine of your car is a complicated system. If there's a problem with yourcar, if it's not running right, there's an answer that can eventuallybe determined based on a limited number of inputs into that system, eahthere'sa lot of inputs, so it does get complicated. But you know what thoseinputs are and they don't necessarily really change all that much. So it's complicated and Miny, includingmyself when I was younger, not so much now enjoyed the challenge of fixing andenhancing, I like to make them faster right. When I was a kid, thiscomplicated system, we love to work on them and there was a logical answer. Ijust had to figure out what it was. So I was a do it Myselfer and- and I didokay, but even then I would call in an expert every once in a while, typicallymy fatherinlaw, because he is an...

...engineer and just seems to geteverything about that kind of stuff, but even then, as a doit yourself or Iwould call on a professional just because I couldn't quite figure it out.A complex system is a little bit different. It has a lot more lot moreinputs to it and because of that, it's exponentially more difficult tounderstand predict solve an issue with that system. Then you add the thirdthing which is adaptive, so a complexadaptive system is one in which there's essentially an infinite number ofinputs that adapt or integree one with another, and because of thatthey can do so in unpredictable ways. So an example of this would be nature just nature in general and of coursesays you know. I believe that the world economy is a complex adaptir system andthat's...

...the reason mainly for that is there'sover seven billion people in the world. We're a global system. Now, as we havewas illustrated by the pandemic, we all interact with each other. All ofthose different people have different emotions, different experiences andeverything impacts all the little decisions that they make, which thenimpact the mark. Okay, DIS that Kino Geyeah. I like the caranalogy because I used to be mechanic, so I get that and I really like yourworld analogy of multiple indputs, but they all in a sense work together. Theyadapt to one another and, unlike a car, because a car has,you know lots of computers, but they don't necessarily tap to each other.Sometimes they do that makes. That makes a lot a lot ofsense,...

...so that totally makes sense why I've had so much trouble with financesJohnis, because I'm goingto do it myself for for so long that there's no way I could understandthis complex adept. I system EA, understand what it is but be understand.How do you function in that so help us understand how doon you you're an expert of those? How do youget your head? An head and hands around this complex adaptive system to helpyour clients? Well, as as we've talked about thatI've made this my life's work, because I'm fascinated by it and I enjoy tryingto figure it out, but even even as much experience as iave had and and my study and an seeing how thingsinteract with one another. I can't predict with consistent accuracyexactly what's going to happen in the marketplace. What you can do is get you know, ageneral idea of how things normally...

...happen and how things are changing,understanding how things are changing right now isanother important part of better understanding. What could happenand ef course the trick to all this and investing within in this and managingportfolios within this is to be ready for anything that might occur becauseanything can and often does occur as exampled in this rmost recent pandemic yeah. Well, it takes obviously years- and Ithink that's one thing- you know one cool thing that you just said: There'sis you can't predict the future. You don't have this crystal ball, butyou've been able to look at trends. You've been able to look at inputs andand in a sense when certain inputs come in traditionally they've had this kind ofo result. I imagine you can look at things like that to kind of get ahandle on some things to go: Well, okay,...

...if oil prices are going down. Typically,that means something over here is going to happen so that you've got a broaderperspective. A lot of these inputs that just a guy like me or many of ourlisteners, we just don't have we don't have access for privy to that numberONEDOR, the information number two. How do I assimilate that information tomake sense for my portfolio right? That's right and the key isunderstanding and knowing the things that you can know are history and howwhat things happen in the past. But the key to making it work in today'smarketplace is understanding how it's different and that's alwaysthe question that we ask ourselves. This happened when all prices droppedback on Thousan, nine hundd and eighty or Hond, nine nded and seventy, orwhenever, whenever we want to look op the example what's different now basedon innovation, technology, general, human behavior, that wasn't true backthen, and how might that impact? What...

...we're likely to see going forward? So things like that and understandingyou know where we are currently along with melting, in that historicalperspective, is Ky to being able to do this well, yeah and, and that's all part ofunderstandn that we are living. If I get this in a complex adept ofsystem and Thawe know, we don't just live there,we invest there, whether we're investing in companies or stocks orwhether we're investing in in you know the business down the street. It's allpart of this system, this ecosystem that we're part of- and you know yourexample of the world, really resonated with me, and I don't know if this istrue or not John, but somebody said that you know when a butterfly flappedit twings and no Africa. You know the wind blows in North Dakota or SOT. Idon't know, but it brings an idea of a complex, adaptof society. To my mind, you know t a a lot of people say thatwhen I I don't know that I necessarily...

...subscribe to the butterfly theory, butI, the concept of it, is very much what I'm talking about within the econnomyyeah. You get the collective of again seven billion emotional frankly- and Italke about this in my book as well. How, as I tend to think of myself as avery rational individual, but the truth is when I look back at some of thedecisions that I made and still make today, I make them emotionally as much as Ikick myself and don't want to believe it. It's just true. I like green and Ilike red. So when I'm picking out a car when I picked up my motorcycle, like Isaid in the book bottom line, is as rational as I trid to be. I really justwanted the red them, so we make all those people makingthose some of the rational and emotionaldecisions, seven billion people, it's going to impact the market and...

...sometimes strange ways it is, and the I guess, that's the other reasonwhy it's helpful to have somebody like you on our team, because you can look at all those differentdecisions and with an outside perspective, guide and direct ourportfolios to where we really want them to be in order to have the life that wereally desired. Hat. That's why the COCON! The conversations you have withyour clients are so important. That's where you begin everything is aconversation to understand. What are you trying to build? What kind of lifeare you wanting to have and how do we build a port folio around you so thatthat can be a reality as much as we can adapt to this complex system? Right,that's right and, of course, the all important question that follows the:How and what do you want to build? Is Why exactly do you feel that way, because at the at the core ofeverything at the core of Usis people,...

...there's an emotional reason that wewant something oifouand? Why is that, and somany people don't spin the appropriate amount of timeunderstanding why they want something that when they obtain that elusive goal,whatever it might be, they're very disappointed, and it's that's a sadthing. You know you work for years to accomplish something and then like I don't know why I'm here that thatdidn't bring me to happiness right right, yeah, some of the most content. Happy People, I know, are the people who are get free and they may not make a ton ofmoney according to the world standards, but they seem to have everything theywant. I'm at a retired truck driver one time and he was driving a shuttle for aregardo repair shop and he just shuttled people all around town. We hada great discussion. He drove semis. All of his live was was at home, raisinghis kids every night because of his Ru.

He was just the happiest nude in theworld from the world's perspective. He didn't have much, but he had everythingthat most people really want, and so it's that why behind? Why are you? Whyare you doing that? And those are the topes of questionsthat John and his team asked when, when you begin a relationship with them andthat's the cool thing about Guardian rockwealth and John and just I just really encourage you to goto the website guarding rockweltcom pick up the phone call him email himand just have a conversation, see how he operates very differently than whatyou might think and begin a conversation about. Why why R? Why areyou going the direction you're going? How do you want to build your life andhow can he help you adapt to this very complex adaptivesystem that we're all part of in a way thati's going to be helpful to you and your family and Johnyou'll find is not only an expert in finances and retirement planning andjust all kinds of things, financial...

...he's an all around good guy, so God ialways appreciate just hanging out with you for a few minutes on your podcastthanks for being here again and hope. You have a great week, brother, allright! Thanks, we'll see you next week, all right Byebye! So thanks forlistening to the building your life, podcast with John Brownie be sure tosubscribe to this podcast. So each new episode will be sent to youautomagically when it is released, have a terrific day.

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