In this episode Myles covers how to save a ton of money with technology, but more importantly how to avoid being shackled by it. We discuss costs, obsolescence and most important, your privacy & freedom.
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We are continuing down the path of how the rich save money. But this episode is a little different because as you will see, if you only ever value your freedom in dollars, you are cursed to lose it. Technology has been one of the greatest gifts to the human species, and allowed us to become the apex predator on this planet. The problem, however, is that with great power comes great responsibility, and we’ve never been in a time in history when responsibility is being neglected at a level that risks the entire future of humanity. So I’m going to talk about money & frugality here, but I want you to keep in the back of your mind that dollars or your local regional currency is just one currency that the frugal are concerned about, and you need to be aware of all the other currencies that technologies touches, or be enslaved by it.
I’m going to try and explain the landscape of technology without being technical. Just know that this is a challenge for me - I’ve been a software engineer since the age of 17, and with almost 40 years of history in this field, it is going to be hard for me to explain things to those that are not technical.
These days there are fewer and fewer of those people. I remember decades ago about communicating with people who would brand themselves as “not technically savvy”. These days I rarely find them. Even my mother-in-law who is in her 80s knows more about her phone, laptop computer, router and TV setup than most 40 year olds. Why? Because it became important to her.
That’s the thing - when something becomes important, you invest some time in learning it. Sure, it isn’t welcomed but knowing your technology helps you manage it. Imagine if you had to call the local Big Box retailer when your router needed to reboot. Or if your computer locked up. That’s just not empowering or realistic. Therefore we learn how to maintain what we have. Sometimes that means that we become more knowledgeable in those things and that also means that we have to develop and learn empathy to communicate with your prior self or others that have not yet made the leap into “nerd talk”.
But the reason I bring this up is that if you are looking to save a lot of money with technology, you are going to have to get a little nerdy. That means you are going to have to learn how this works. A good analogy would be maintaining your car. If you understand even the fundamentals about how a car engine works, you can then relate to why you have to put oil in it. Or fuel. Or why you need periodic maintenance. If you just give up control to your local dealer, then you will be ripped off. It isn’t a matter of it - but when. Knowledge provides you with the protection of smoke screens.
And technological BS is rife in our society. If you have ever received one of those scammer calls from “Microsoft Tech Support” that sounds more like it is coming from some call center sweatshop in New Delhi, well.... It is. They are looking to scam you out of money because you don’t know your tech. See how that work? Their knowledge is being used as a weapon against you because you can’t defend yourself from it. The only defense you have with these things is to get the knowledge so you can call BS on these guys are kick them to the curb. Taking control of your technology is much the same as taking control of your finances. If you think you can’t learn this stuff, you are wrong. And if you don’t learn it, you are a victim to it. Or a “noob” and you will be “pwned” as they would love to say.
I’m not going to try and school you on the art of technology, but I’m going to tell you a little of what it looks like behind the curtain. I’ve made millions and millions in technology over my career and most of it came from one simple little rule - know something that will be in demand well ahead of it becoming in demand. That’s a gamble, but looking back this is no different to how those that pick stocks, or horses or real estate investments work. Those things are going to go up by the free market principles of supply & demand. And technology is no different. But it just happens much faster. If you understand it, then you can pick your winners a bit easier.
Let’s make some general high level statements here - Understand the difference between “analog” and “digital”. The whole reason we have computers is because of a thing called electricity. You probably know about that. You turn the power on or off. We call that a “boolean state”. Other things are boolean like true or false, day or night, up or down, right or left, etc. But there are things that occur within scales (like colors of the rainbow). The thing with computers is that “digital” technology is based on the simple idea of boolean values - on or off. And computers (and anything really that has a printed circuit board in it) counts that using transistors that represent on or off states. We call that Bits (Binary Digits). 0 for off, and 1 for On. Pretty simple.
If you have many parallel electrical lines, you can have multiple 0s or 1s. We call that a “bus” and depending on how many parallel lines, you can use math to determine how to count, or you can embed code in there. For example, when they talk about 32 bit or 64 bit stuff, they are talking about the number of parallel channels of data that move around. The more channels, the more the system can do. That’s why you might have to upgrade technology over time from one thing to another.
This really all came from the companies that make chips since the 1960s. The big ones you probably have heard of are companies like Intel or AMD or ARM. These make what we call “CPUs” (or Central Processing Units). Think of these things as the central brain of a computer. The more powerful the brain, the more it can do. The reason this is important is that these companies live in the world of minaturization. The smaller you can make things, the more busses you can have, the more they can do. And we’re talking not milimeter size things, but nano-meter sized. It is crazy just how smart these people are to create CPU chips like this, but to get them so small that they can do so much with such little space & power requirements.
Over the past 50 years or so, they discovered that about every 18 months you could double the capacity of a CPU for about the same cost to produce it. Once the factories can make these chips, they can spit them out in vast quantities, so the setup costs to do it are finite up front but you can produce an endless supply of chips. They have the research teams inventing the next crazy chip that can do so much, then they work out how to fabricate it, and you get it in your next upgraded whatever. This doubling effect they give the name “Moore’s Law”, named after one of the founders of Intel Corporation, Gordon Moore.
Why is this important? Well every 18 months or so, you can have twice the capability for the same money. It drives the underlying principles of technology.
You see, technology is about leverage. Each time a new thing gets invented, there are thousands of “partners” that use it for their products. They don’t re-invent the wheel all the time. They see a new chip coming out, and so they invent new supporting technologies for it. Some of that is physical (we call that “hardware”) and some of it is the code that runs on those technologies (we call that “software”). And you know that every 18 months there’s something new coming out, so people who work in technology re-invent themselves all the time. They learn a skill, and try and milk it for as long as possible, and then return to learning the next skill. Many are constantly doing these things in parallel - they are practicing in one area, while learning in another. It keeps things dynamic and interesting, but it also means that people who work in technology often have high burnout rates. it also means that they may not have the time or inclination to address social norms because of the immersion factor that comes with working in highly technical, and high change environments.
Anyway let’s bring this back to why this matters for you.
First, whatever you buy today will be obsolete in 18 months. More than likely you have seen this with your phone, etc. The newer model is twice as fast, priced the same, etc. That’s Moore’s law in action. It applies to anything with a silicon chip in it. Your TV, your computer, your car, etc.
Anything more than 5 or 10 years old is definitely obsolete and those that worked on those systems back then are often long gone and moved onto something else, because of the way the technology industry works. That means older is not better. In fact, older is generally expensive to maintain, costs more to run and is usually cheaper to replace than repair. That goes against the fundamental nature of things we are used to in the physical world. You don’t throw your house away because it needs a repair. But you probably would with your phone.
Now another factor of the tech space is globalization. It used to be that all chips were made in the “Silicon Valley” (northern California) or Texas. But that changed in the 1980s and 1990s as other regions wanted a piece of the action. Today most chip manufacture is done in Asian, with a huge amount in China. Still the R&D is being done in the USA for much of it, and therefore in order to keep funding this globalized model, a big part of technology is the concept of “intellectual property” and “licensing”. This is where lawyers meet nerds.
If you spend millions inventing something, but you don’t make it, then you still want some royalty payment for what you invented. Like a songwriter wants the royalties for their song, or an inventor wants royalties for their patent. Software is no different - there’s a license fee associated with using technologies.
But as I said before, technology is based on leverage - you don’t re-invent the CPU for a new phone app. You write the software that sits on an operating system (like iOS or Android), and if that means that the OS requires you to pay money to use it, you bundle that cost into the cost of your product. If we are trying to keep pricing down, there has to be a better way and in the 1980s and 1990s that way emerged.
It was called “Open Source” or “Free Software”. Basically a faction of the software industry that was more “hippie” than their stiff suited IBM types, wanted to create things and basically give it away for humanity. They were not interested in money - they already had salaries and were doing ok. They just wanted to take the stuff they did in their spare time at home and share it with their friends. But as the things they were doing were connected to things that cost money, a group started to work out that if they went lower and lower in level to create free versions of things that companies wanted to charge license fees for, they could eventually share everything for free.
And that’s what they did. They took research projects from universities that would typically never charge for the use of, and worked out how to reverse engineer other technologies (a technique to work out how something was made, so you could do it yourself) and created the fundamental lowest level of software technology that things would run on, and called it “Linux”. This was a merging of the name of the main guy who created the “kernel” or the core of it, Linus Torvalds, and he used the commonly found “Unix” operating system as his basic design, merged the words together and came up with “Linux”.
This was a game changer. In the past, we all had to pay companies like Microsoft hundreds and hundreds of dollars to use their DOS or Windows operating systems. And other companies like Apple would bundle their operating systems into their proprietary hardware offerings, forcing you into an “eco-system” - a situation where things were interconnected to things but only Apple owned the rights to the “things” and consequently if you wanted to use one thing in their product offerings, it was more likely that you would end up using ALL of the things in their product offerings because not doing this would be almost impossible if not a pain in the ass. And that’s exactly what happened.
Over time, these corporate monoliths emerged, and with that, the richest man in the world was now Bill Gates, the founder of Microsoft. This consolidation meant that anyone also trying to compete would be crushed by the weight of these big corporations that controlled their eco-system.
But one thing they could never do was compete with free. Open source offerings based on Linux were free and always would be free. This is because one of the core ringleaders of that movement, a guy by the name of Richard Stallman, invented a thing called the “GPL” (Gnu Public License) which was an ironclad legal agreement that people could license their free software on. The tenets of the agreement was that although you could charge money to use the free software, you still had the responsibility to release the source code (the underlying trade secrets of what you built) to the general community who could also use it for free. There was no lock in, there was no hiding of the technology and it was kinda like a pot-luck of tech. Take a penny, give a penny, kinda thing.
Technologists went against their own best interests with this, often doing projects at home after work that were free, while being paid to make proprietary software during the day. This battle between proprietary & free software was fierce, and in the end it destroyed some companies. Eventually even the proprietary companies (like Apple for example) gave up because their best software developers only seemed to want to work on free software projects, so they became “friends” of free software and donated large sums of money to it. But they had an alterior motive - they wanted to use the free software for their own commercial projects. The Mac OS (and iOS) was based on the free BSD operating system (a spin-off of Linux). Even Google got into the game - creating Android based on the free Java software development language.
And about this time, another thing came along. It is called “The Internet”.
The idea of a web server was invented in the 1980s, but it would never have worked if you had to buy it. So the free software movement invented a project called “Apache” and webservers based on that project, and then everyone could build and host a website. Small service providers could startup (we call those ISPs) by using free Linux software and hosting websites for people on free Apache software, and charging only a small fee for the use of their connections & power, etc. That’s something I did back in the day. Even to this day, I host Linux systems for a handful of clients and it runs by robot most of the time, so it is a nice smart income source. But it really is a thing of the past. Now it has become a utility that the big companies offer cheap - e.g. Amazon AWS, Microsoft Azure, etc.
Notice how these mega-corporations have embraced free software to find a way to sell it back to you? That’s how they do it. They couldn’t ever win against free software. The old model of you paying a “license fee” for something was threatened with free software. But they could create an environment in which they control the sandbox in which you play using that very same technology, for a small cost, and call that “the cloud”. Then you pay them for the right to use their technology in their “cloud”.
This whole thing is how the proprietary world makes billions against the better interests of those that created the free software. But when you give something away for free, you don’t really get to determine who gets it. That would be discriminatory and goes against the very same fundamental principles of why you are doing it. Free as in freedom, as they say.
OK, now you get a bit of the background how on earth does this all matter to you?
Well it is why you have to spend money routinely for your tech gadgets. It is why you can and cannot do certain things with your tech gadgets. It is why you are feeling extorted with monthly subscription fees or licensing fees for things you want to use. And it is why there is Free stuff still out there, and most of the time they are not telling you about it.
Know that whatever you spend money on with technology, it will be obsolete. But that there is a growing movement of contrarians out there that want you to get more life out of your investments. Call them “Retro enthusiasts”. Many are just folks that were developers 20 years ago and have fond memories of working on or with technology and like old cars, they want to restore and celebrate them forever.
The question comes down to whether there is any sense in this considering what the new stuff can do. Outside of the nostalgia of it all, probably not. But there are some sweet spots that few people think of with technology, and why you can spend 10% of the price for something and yet get 80% of the benefits of it when compared to the current model.
TIming is everything here. Remember if you buy a new car and drive it off the lot, you will devalue it by about 25% on day 1. The same is true of technology. Like I mentioned with factories that gear up to mass produce something like CPU chips, the first wave of anything is super expensive. Take, for example, hard disk drives. We store our “stuff” on these things and they keep getting bigger. But the first wave of storage technology has a 10x price premium vs. when it goes mainstream. Today, as I record this, I can buy a 4TB hard disk drive for under $120. Five years ago, that same drive would have cost me $400. Do you want to be in the first wave of buying stuff? For most that is a luxury they can’t afford. They find a time when it makes sense based on how long you get to use it before it is degraded to the point that the thing offers no reason to continue to use it, vs. the cost factor up front to buy it.
It is why the worst possible thing you could do is to be in the first wave with anything. We call that the “bleeding edge” in technology. It is rife with bugs, quality issues, etc. but more importantly it is super expensive. It is always better for someone else to get the kinks out of something and you spend half as much money to buy it. Of course, everyone’s patience and threshold of pain is different. Some need to get the competitive advantage that even a 5% speed improvement gives. They will be on the bleeding edge. Most of us do not.
That’s where you have to see through the BS out there. The latest XYZ chip that is super fast, etc. is what they are selling you. But are you willing to spend the money for it? And do you realize that because everything else is leveraged from it, you won’t just need to buy the new chip, but the new computer to put it in, the new operating system version that only runs on it, and all the new application software that runs on that operating system.
This is where you see the deceit in the tech industry. They want to create a situation where you fall prey to the future, because they get repetitive purchases. They might give you a small discount for being a “loyal” customer by charging less to “upgrade” something than a new purchase, but the discount is usually negligable and it would be better to never have to spend the money at all. But this comes with the fact that, as they say, “In for a penny, in for a pound”. If you pull the trigger on a new phone or laptop, etc. then you will need a ton of other new stuff. Therefore the longer you can keep things, the more likely you keep your money.
Remember I said up front that a big part of you gaining control back in technology is to understand it better so that you don’t get smoke blown up your ass with technical facts? This is critical. If you can see through the BS as to why you have to buy that new router, or that new computer or that new operating system, then you might just save yourself thousands and thousands, over and over again.
There is a luxury “tax” associated with having the latest, greatest stuff. We all want to be the cool kid with the new toy. But that luxury tax is very, very expensive. Having the latest phone might be cool with your friends, but every app that runs on the old one may need to be upgraded or re-purchased again. And you get ever locked into a subscription model of monthly payments over time - bleeding out your money and further enslaving you.
How do you break this cycle?
Go back to the free software ideas. If you understand that you can have Linux for free, and you realize that pretty much all the software that runs on it is free, then you would never have to pay for anything ever again. And the cool thing here is that if you go down that path, whether it be on your desktop computer, your laptop or even your phone (yes, there are free software operating systems for phones that respect not only your wallet but your personal freedom & privacy), you can regain your world again.
The latest Linux operating system releases are feature for feature competitive with the latest Windows or Mac software releases. And pretty much anything you need to run can run on them. You download Ubuntu or something like that, put it on a thumbdrive and install it on your computer. It is simple and easy to do. And here’s the really cool thing - you can go to your local thrift store and buy a $100 old computer and install Ubuntu on it, and it will probably perform competitively with the $2000 computer at Best Buy running Windows 10.
Why? Because there is no profit motivation with free software. It is more of a world of inclusion than a world of money & exclusion. Of course they have no marketing budget or ways to make you feel “woke” or part of some exclusive community. The people in the free software/open source world are bearded folk that are nerdy and probably don’t bathe as much as they should But that’s how a maverick or a contrarian looks. They don’t accept hypnotism and definitely they are more interested in protecting their privacy (and yours as well).
They are the hackers - the mavericks, that have purple hair, drive some old clunker of a car and lace their laptops with stickers. You see them at the coffee shops. You probably encounter them online but you’d never know unless you video chat with them.
But the one thing that you can rely on is that although they hold the keys to the technology because they wrote most of it, the true hackers don’t want to steal from you. They are more interested in “sticking it to the man” or supporting revolution, particularly when it comes to personal privacy and being unconstrained. I am proud to say that I’m one of them and although these days I don’t write anywhere near as much software as I used to, I will always support a hacker over a corporate wonk. That’s because one creates the future and the other extorts it. If you buddy up with those that create the future, you can have it before the wonks get it. And the only way to do that is to understand free software & open source and embrace it.
If that means that you look odd, or you run some operating system that no one else does, but you get everything for free, then you win. You might think that the level of effort to understand the technology is large and that all you will end up doing is to be able to talk with purple haired hackers, then let me explain how this works out financially:
Microsoft Windows 10 is about $200 to purchase, and you will likely do that twice over the course of the lifetime of your computer. Ubuntu is 100% free and comes out twice a year with new releases. That’s about a $15 a month saving.
If you can get 2x the life out of your technology by using open source, the $2000 purchase of the computer that lasts you 3 years vs the $100 one that lasts you 6 years represents a $3900 savings. Amortize that over the months of time, and it is a $54 a month savings.
If you are able to save $1,000 in software purchases over a 5 year period, that’s a $16 a month savings.
If you learn that you can take an old $100 computer and put some cheap hard drives in it, install FreeNAS or some other free server software to store all your movies, music, documents, etc. for your home rather than spending $100 a year on DropBox or some other cloud storage system, you save $8 a month there and you have 100% control over your stuff. Privacy issues are reduced.
If you are able to take advantage of older technologies, particularly phones, and reduce buying $1000 phones down to once every 5 years, the savings there would be about $42 a month to you.
The total monthly savings there add up to $135 a month and we are just getting started. That’s $1620 a year, BTW.
Now in today’s market, your personal data has become a currency that we spend (often without even knowing it), and it means that we have become just some data point in a database somewhere. By aggregating the data, correlating it with other databases, and using a combination of math and psy-ops, the mega powerful FANG companies are selling us to each other in order to extort advertisers and those that wish to control us. This is nothing new - it is much like the “rat on your neighbors” model that Soviet Russia used to keep people in check. No one has any privacy anymore, so control is given to those with the data.
We give away our anonymity and privacy to get free Google searches. Rather than using our own memory, brains, commonsense, etc. we give that away to search Google for anything. We probably do that at least 5 times a day. Each search is identified to us, and we tell Google what we are thinking, desiring, fearing, envying, etc. Our entire human personality is disclosed with the questions we ask to a public corporation that is likely more powerful than governments. The same is true of whatever you do on Facebook. Or Twitter. Or Amazon, etc.
Our emails that we let a third party host for us, tells us more in intimate details about where we spend money, who our friends are, our thoughts & feelings, etc. We all know the story of Edward Snowden or Julian Assange. We know that our data is being used against us. We know that every time you cross an international border. You know that some computer & database knows everything about you. Don’t even try and lie to an immigration officer because they already know the answers to the questions they are posing to you, as they just want to see if you are trustworthy to be allowed into their country.
Banks know all about you when you apply for a credit card or a loan, by harvesting the same data. It will determine how much you pay in interest to use other people’s money or even if you can. Your FICO score, for example, factors in your trustworthiness to pay back the loan and that is determined by harvesting data on your past activities. Your health insurance premium or even the ability to get heath care that the insurer will pay for, is determined by data harvesting of data that you openly give them. So when you receive a letter in the mail that says they are canceling your insurance policy, it’s because you told them to. Or when Amazon starts to offer you baby products because you disclosed to your best friend over Gmail that you are pregnant, that’s when it starts to get real & scary.
Technology is a great tool that we can use to do things that we could never have done before. But it is also a weapon to be used against us, and if you don’t understand it, you are loading the gun with live ammunition that will be pointed directly at you.
Look, the reality is that in order to exist in the 21st century, you are going to need to use technology. The fight to use free and open source technology might save you some money. But more importantly, the control that get back to your own sovereign existence and privacy is more important. The currency here isn’t just dollars - as they say with free services like Google, Facebook, Twitter, etc. - when you are not forced to spend money to buy the product, you ARE the product.
If you were financially wealthy and never needed to worry about saving money, what would then become your more important concerns? Would you spend millions to have some privacy? I mean many of the super wealthy do just that. They buy their own islands to live on, they pay for their own security attache, they spend hundreds of thousands for their own anonymity, they pay millions to land their own planes at airports and use VIP level gates so they can avoid others.
They ultimately value their freedom and privacy and once they are no longer slaves to banks and the costs of their existence, they look to spending money to regain their own sovereign existence. They don’t want to be censored - they don’t want to be surveiled. It is the same for all of us, but because people don’t invest in understanding their technologies, they become slaves to them. And in the process, they give themselves to organizations, governments, etc. that have no interest in protecting them but to extort them like some node in a battery network like in The Matrix.
Now I realize you have probably heard all of this before. You are probably sick of the loud “shock jocks” out there telling you the end of the world is Nigh or that you are being watched, etc. The comparisons to a world of George Orwell’s 1984 has to be encountered by all of us at least a few times each week. But no one ever tells you how to avoid it, or at least make it much, much harder for the bad guys. Well the technology you use is the very weapon they are using against you, and unless you control it, it will enslave you.
Understand the concept of encryption of your data. Sure, nothing can be easily protected anymore. But if you saw the level of quantum computing power that is needed to break encryption, you would realize that if we all used it, no central authority could ever amass the computing power to decrypt our communications. That’s why encryption matters. But understanding the true nature of end to end encryption is the only way to realize that if anything intercepts your communications before it gets encrypted, then its game over. Your very operating system sits in a prime position to get your decrypted data and send it to the bad guys. And often the bad guys are the very purveyors of that OS that you spend your own hard earned money to acquire.
Hence the importance of using free and open source software in which the code that does those nasty things are open and vetted by the very same software developers. The one thing that destroys evil is the transparent light that can be shone upon those bad things being done in the dark.
If you have gotten this far through my podcast episode, you probably think I’m some tin foil hat crazy person. But I’ve spent 40 years watching the technology industry that I was a part of creating in my own small way, be destroyed by evil and enslaving everyone around us. It is the fundamental observation that led me down the rabbit hole of what has become beUnconstrained.
If you are only focused on money and your financial freedom, you are a fool. Your wealth comes in many currencies, including your anonymity and privacy. You can get pissed off that you can’t pay your rent because you don’t have any money and the landlord will evict you and you will be living in a cardboard box. That’s one form of freedom being e
We are continuing down the path of how the rich save money. But this episode is a little different because as you will see, if you only ever value your freedom in dollars, you are cursed to lose it. Technology has been one of the greatest gifts to the human species, and allowed us to become the apex predator on this planet. The problem, however, is that with great power comes great responsibility, and we’ve never been in a time in history when responsibility is being neglected at a level that risks the entire future of humanity. So I’m going to talk about money & frugality here, but I want you to keep in the back of your mind that dollars or your local regional currency is just one currency that the frugal are concerned about, and you need to be aware of all the other currencies that technologies touches, or be enslaved by it.
I’m going to try and explain the landscape of technology without being technical. Just know that this is a challenge for me - I’ve been a software engineer since the age of 17, and with almost 40 years of history in this field, it is going to be hard for me to explain things to those that are not technical.
These days there are fewer and fewer of those people. I remember decades ago about communicating with people who would brand themselves as “not technically savvy”. These days I rarely find them. Even my mother-in-law who is in her 80s knows more about her phone, laptop computer, router and TV setup than most 40 year olds. Why? Because it became important to her.
That’s the thing - when something becomes important, you invest some time in learning it. Sure, it isn’t welcomed but knowing your technology helps you manage it. Imagine if you had to call the local Big Box retailer when your router needed to reboot. Or if your computer locked up. That’s just not empowering or realistic. Therefore we learn how to maintain what we have. Sometimes that means that we become more knowledgeable in those things and that also means that we have to develop and learn empathy to communicate with your prior self or others that have not yet made the leap into “nerd talk”.
But the reason I bring this up is that if you are looking to save a lot of money with technology, you are going to have to get a little nerdy. That means you are going to have to learn how this works. A good analogy would be maintaining your car. If you understand even the fundamentals about how a car engine works, you can then relate to why you have to put oil in it. Or fuel. Or why you need periodic maintenance. If you just give up control to your local dealer, then you will be ripped off. It isn’t a matter of it - but when. Knowledge provides you with the protection of smoke screens.
And technological BS is rife in our society. If you have ever received one of those scammer calls from “Microsoft Tech Support” that sounds more like it is coming from some call center sweatshop in New Delhi, well.... It is. They are looking to scam you out of money because you don’t know your tech. See how that work? Their knowledge is being used as a weapon against you because you can’t defend yourself from it. The only defense you have with these things is to get the knowledge so you can call BS on these guys are kick them to the curb. Taking control of your technology is much the same as taking control of your finances. If you think you can’t learn this stuff, you are wrong. And if you don’t learn it, you are a victim to it. Or a “noob” and you will be “pwned” as they would love to say.
I’m not going to try and school you on the art of technology, but I’m going to tell you a little of what it looks like behind the curtain. I’ve made millions and millions in technology over my career and most of it came from one simple little rule - know something that will be in demand well ahead of it becoming in demand. That’s a gamble, but looking back this is no different to how those that pick stocks, or horses or real estate investments work. Those things are going to go up by the free market principles of supply & demand. And technology is no different. But it just happens much faster. If you understand it, then you can pick your winners a bit easier.
Let’s make some general high level statements here - Understand the difference between “analog” and “digital”. The whole reason we have computers is because of a thing called electricity. You probably know about that. You turn the power on or off. We call that a “boolean state”. Other things are boolean like true or false, day or night, up or down, right or left, etc. But there are things that occur within scales (like colors of the rainbow). The thing with computers is that “digital” technology is based on the simple idea of boolean values - on or off. And computers (and anything really that has a printed circuit board in it) counts that using transistors that represent on or off states. We call that Bits (Binary Digits). 0 for off, and 1 for On. Pretty simple.
If you have many parallel electrical lines, you can have multiple 0s or 1s. We call that a “bus” and depending on how many parallel lines, you can use math to determine how to count, or you can embed code in there. For example, when they talk about 32 bit or 64 bit stuff, they are talking about the number of parallel channels of data that move around. The more channels, the more the system can do. That’s why you might have to upgrade technology over time from one thing to another.
This really all came from the companies that make chips since the 1960s. The big ones you probably have heard of are companies like Intel or AMD or ARM. These make what we call “CPUs” (or Central Processing Units). Think of these things as the central brain of a computer. The more powerful the brain, the more it can do. The reason this is important is that these companies live in the world of minaturization. The smaller you can make things, the more busses you can have, the more they can do. And we’re talking not milimeter size things, but nano-meter sized. It is crazy just how smart these people are to create CPU chips like this, but to get them so small that they can do so much with such little space & power requirements.
Over the past 50 years or so, they discovered that about every 18 months you could double the capacity of a CPU for about the same cost to produce it. Once the factories can make these chips, they can spit them out in vast quantities, so the setup costs to do it are finite up front but you can produce an endless supply of chips. They have the research teams inventing the next crazy chip that can do so much, then they work out how to fabricate it, and you get it in your next upgraded whatever. This doubling effect they give the name “Moore’s Law”, named after one of the founders of Intel Corporation, Gordon Moore.
Why is this important? Well every 18 months or so, you can have twice the capability for the same money. It drives the underlying principles of technology.
You see, technology is about leverage. Each time a new thing gets invented, there are thousands of “partners” that use it for their products. They don’t re-invent the wheel all the time. They see a new chip coming out, and so they invent new supporting technologies for it. Some of that is physical (we call that “hardware”) and some of it is the code that runs on those technologies (we call that “software”). And you know that every 18 months there’s something new coming out, so people who work in technology re-invent themselves all the time. They learn a skill, and try and milk it for as long as possible, and then return to learning the next skill. Many are constantly doing these things in parallel - they are practicing in one area, while learning in another. It keeps things dynamic and interesting, but it also means that people who work in technology often have high burnout rates. it also means that they may not have the time or inclination to address social norms because of the immersion factor that comes with working in highly technical, and high change environments.
Anyway let’s bring this back to why this matters for you.
First, whatever you buy today will be obsolete in 18 months. More than likely you have seen this with your phone, etc. The newer model is twice as fast, priced the same, etc. That’s Moore’s law in action. It applies to anything with a silicon chip in it. Your TV, your computer, your car, etc.
Anything more than 5 or 10 years old is definitely obsolete and those that worked on those systems back then are often long gone and moved onto something else, because of the way the technology industry works. That means older is not better. In fact, older is generally expensive to maintain, costs more to run and is usually cheaper to replace than repair. That goes against the fundamental nature of things we are used to in the physical world. You don’t throw your house away because it needs a repair. But you probably would with your phone.
Now another factor of the tech space is globalization. It used to be that all chips were made in the “Silicon Valley” (northern California) or Texas. But that changed in the 1980s and 1990s as other regions wanted a piece of the action. Today most chip manufacture is done in Asian, with a huge amount in China. Still the R&D is being done in the USA for much of it, and therefore in order to keep funding this globalized model, a big part of technology is the concept of “intellectual property” and “licensing”. This is where lawyers meet nerds.
If you spend millions inventing something, but you don’t make it, then you still want some royalty payment for what you invented. Like a songwriter wants the royalties for their song, or an inventor wants royalties for their patent. Software is no different - there’s a license fee associated with using technologies.
But as I said before, technology is based on leverage - you don’t re-invent the CPU for a new phone app. You write the software that sits on an operating system (like iOS or Android), and if that means that the OS requires you to pay money to use it, you bundle that cost into the cost of your product. If we are trying to keep pricing down, there has to be a better way and in the 1980s and 1990s that way emerged.
It was called “Open Source” or “Free Software”. Basically a faction of the software industry that was more “hippie” than their stiff suited IBM types, wanted to create things and basically give it away for humanity. They were not interested in money - they already had salaries and were doing ok. They just wanted to take the stuff they did in their spare time at home and share it with their friends. But as the things they were doing were connected to things that cost money, a group started to work out that if they went lower and lower in level to create free versions of things that companies wanted to charge license fees for, they could eventually share everything for free.
And that’s what they did. They took research projects from universities that would typically never charge for the use of, and worked out how to reverse engineer other technologies (a technique to work out how something was made, so you could do it yourself) and created the fundamental lowest level of software technology that things would run on, and called it “Linux”. This was a merging of the name of the main guy who created the “kernel” or the core of it, Linus Torvalds, and he used the commonly found “Unix” operating system as his basic design, merged the words together and came up with “Linux”.
This was a game changer. In the past, we all had to pay companies like Microsoft hundreds and hundreds of dollars to use their DOS or Windows operating systems. And other companies like Apple would bundle their operating systems into their proprietary hardware offerings, forcing you into an “eco-system” - a situation where things were interconnected to things but only Apple owned the rights to the “things” and consequently if you wanted to use one thing in their product offerings, it was more likely that you would end up using ALL of the things in their product offerings because not doing this would be almost impossible if not a pain in the ass. And that’s exactly what happened.
Over time, these corporate monoliths emerged, and with that, the richest man in the world was now Bill Gates, the founder of Microsoft. This consolidation meant that anyone also trying to compete would be crushed by the weight of these big corporations that controlled their eco-system.
But one thing they could never do was compete with free. Open source offerings based on Linux were free and always would be free. This is because one of the core ringleaders of that movement, a guy by the name of Richard Stallman, invented a thing called the “GPL” (Gnu Public License) which was an ironclad legal agreement that people could license their free software on. The tenets of the agreement was that although you could charge money to use the free software, you still had the responsibility to release the source code (the underlying trade secrets of what you built) to the general community who could also use it for free. There was no lock in, there was no hiding of the technology and it was kinda like a pot-luck of tech. Take a penny, give a penny, kinda thing.
Technologists went against their own best interests with this, often doing projects at home after work that were free, while being paid to make proprietary software during the day. This battle between proprietary & free software was fierce, and in the end it destroyed some companies. Eventually even the proprietary companies (like Apple for example) gave up because their best software developers only seemed to want to work on free software projects, so they became “friends” of free software and donated large sums of money to it. But they had an alterior motive - they wanted to use the free software for their own commercial projects. The Mac OS (and iOS) was based on the free BSD operating system (a spin-off of Linux). Even Google got into the game - creating Android based on the free Java software development language.
And about this time, another thing came along. It is called “The Internet”.
The idea of a web server was invented in the 1980s, but it would never have worked if you had to buy it. So the free software movement invented a project called “Apache” and webservers based on that project, and then everyone could build and host a website. Small service providers could startup (we call those ISPs) by using free Linux software and hosting websites for people on free Apache software, and charging only a small fee for the use of their connections & power, etc. That’s something I did back in the day. Even to this day, I host Linux systems for a handful of clients and it runs by robot most of the time, so it is a nice smart income source. But it really is a thing of the past. Now it has become a utility that the big companies offer cheap - e.g. Amazon AWS, Microsoft Azure, etc.
Notice how these mega-corporations have embraced free software to find a way to sell it back to you? That’s how they do it. They couldn’t ever win against free software. The old model of you paying a “license fee” for something was threatened with free software. But they could create an environment in which they control the sandbox in which you play using that very same technology, for a small cost, and call that “the cloud”. Then you pay them for the right to use their technology in their “cloud”.
This whole thing is how the proprietary world makes billions against the better interests of those that created the free software. But when you give something away for free, you don’t really get to determine who gets it. That would be discriminatory and goes against the very same fundamental principles of why you are doing it. Free as in freedom, as they say.
OK, now you get a bit of the background how on earth does this all matter to you?
Well it is why you have to spend money routinely for your tech gadgets. It is why you can and cannot do certain things with your tech gadgets. It is why you are feeling extorted with monthly subscription fees or licensing fees for things you want to use. And it is why there is Free stuff still out there, and most of the time they are not telling you about it.
Know that whatever you spend money on with technology, it will be obsolete. But that there is a growing movement of contrarians out there that want you to get more life out of your investments. Call them “Retro enthusiasts”. Many are just folks that were developers 20 years ago and have fond memories of working on or with technology and like old cars, they want to restore and celebrate them forever.
The question comes down to whether there is any sense in this considering what the new stuff can do. Outside of the nostalgia of it all, probably not. But there are some sweet spots that few people think of with technology, and why you can spend 10% of the price for something and yet get 80% of the benefits of it when compared to the current model.
We are continuing down the path of how the rich save money. But this episode is a little different because as you will see, if you only ever value your freedom in dollars, you are cursed to lose it. Technology has been one of the greatest gifts to the human species, and allowed us to become the apex predator on this planet. The problem, however, is that with great power comes great responsibility, and we’ve never been in a time in history when responsibility is being neglected at a level that risks the entire future of humanity. So I’m going to talk about money & frugality here, but I want you to keep in the back of your mind that dollars or your local regional currency is just one currency that the frugal are concerned about, and you need to be aware of all the other currencies that technologies touches, or be enslaved by it.
I’m going to try and explain the landscape of technology without being technical. Just know that this is a challenge for me - I’ve been a software engineer since the age of 17, and with almost 40 years of history in this field, it is going to be hard for me to explain things to those that are not technical.
These days there are fewer and fewer of those people. I remember decades ago about communicating with people who would brand themselves as “not technically savvy”. These days I rarely find them. Even my mother-in-law who is in her 80s knows more about her phone, laptop computer, router and TV setup than most 40 year olds. Why? Because it became important to her.
That’s the thing - when something becomes important, you invest some time in learning it. Sure, it isn’t welcomed but knowing your technology helps you manage it. Imagine if you had to call the local Big Box retailer when your router needed to reboot. Or if your computer locked up. That’s just not empowering or realistic. Therefore we learn how to maintain what we have. Sometimes that means that we become more knowledgeable in those things and that also means that we have to develop and learn empathy to communicate with your prior self or others that have not yet made the leap into “nerd talk”.
But the reason I bring this up is that if you are looking to save a lot of money with technology, you are going to have to get a little nerdy. That means you are going to have to learn how this works. A good analogy would be maintaining your car. If you understand even the fundamentals about how a car engine works, you can then relate to why you have to put oil in it. Or fuel. Or why you need periodic maintenance. If you just give up control to your local dealer, then you will be ripped off. It isn’t a matter of it - but when. Knowledge provides you with the protection of smoke screens.
And technological BS is rife in our society. If you have ever received one of those scammer calls from “Microsoft Tech Support” that sounds more like it is coming from some call center sweatshop in New Delhi, well.... It is. They are looking to scam you out of money because you don’t know your tech. See how that work? Their knowledge is being used as a weapon against you because you can’t defend yourself from it. The only defense you have with these things is to get the knowledge so you can call BS on these guys are kick them to the curb. Taking control of your technology is much the same as taking control of your finances. If you think you can’t learn this stuff, you are wrong. And if you don’t learn it, you are a victim to it. Or a “noob” and you will be “pwned” as they would love to say.
I’m not going to try and school you on the art of technology, but I’m going to tell you a little of what it looks like behind the curtain. I’ve made millions and millions in technology over my career and most of it came from one simple little rule - know something that will be in demand well ahead of it becoming in demand. That’s a gamble, but looking back this is no different to how those that pick stocks, or horses or real estate investments work. Those things are going to go up by the free market principles of supply & demand. And technology is no different. But it just happens much faster. If you understand it, then you can pick your winners a bit easier.
Let’s make some general high level statements here - Understand the difference between “analog” and “digital”. The whole reason we have computers is because of a thing called electricity. You probably know about that. You turn the power on or off. We call that a “boolean state”. Other things are boolean like true or false, day or night, up or down, right or left, etc. But there are things that occur within scales (like colors of the rainbow). The thing with computers is that “digital” technology is based on the simple idea of boolean values - on or off. And computers (and anything really that has a printed circuit board in it) counts that using transistors that represent on or off states. We call that Bits (Binary Digits). 0 for off, and 1 for On. Pretty simple.
If you have many parallel electrical lines, you can have multiple 0s or 1s. We call that a “bus” and depending on how many parallel lines, you can use math to determine how to count, or you can embed code in there. For example, when they talk about 32 bit or 64 bit stuff, they are talking about the number of parallel channels of data that move around. The more channels, the more the system can do. That’s why you might have to upgrade technology over time from one thing to another.
This really all came from the companies that make chips since the 1960s. The big ones you probably have heard of are companies like Intel or AMD or ARM. These make what we call “CPUs” (or Central Processing Units). Think of these things as the central brain of a computer. The more powerful the brain, the more it can do. The reason this is important is that these companies live in the world of minaturization. The smaller you can make things, the more busses you can have, the more they can do. And we’re talking not milimeter size things, but nano-meter sized. It is crazy just how smart these people are to create CPU chips like this, but to get them so small that they can do so much with such little space & power requirements.
Over the past 50 years or so, they discovered that about every 18 months you could double the capacity of a CPU for about the same cost to produce it. Once the factories can make these chips, they can spit them out in vast quantities, so the setup costs to do it are finite up front but you can produce an endless supply of chips. They have the research teams inventing the next crazy chip that can do so much, then they work out how to fabricate it, and you get it in your next upgraded whatever. This doubling effect they give the name “Moore’s Law”, named after one of the founders of Intel Corporation, Gordon Moore.
Why is this important? Well every 18 months or so, you can have twice the capability for the same money. It drives the underlying principles of technology.
You see, technology is about leverage. Each time a new thing gets invented, there are thousands of “partners” that use it for their products. They don’t re-invent the wheel all the time. They see a new chip coming out, and so they invent new supporting technologies for it. Some of that is physical (we call that “hardware”) and some of it is the code that runs on those technologies (we call that “software”). And you know that every 18 months there’s something new coming out, so people who work in technology re-invent themselves all the time. They learn a skill, and try and milk it for as long as possible, and then return to learning the next skill. Many are constantly doing these things in parallel - they are practicing in one area, while learning in another. It keeps things dynamic and interesting, but it also means that people who work in technology often have high burnout rates. it also means that they may not have the time or inclination to address social norms because of the immersion factor that comes with working in highly technical, and high change environments.
Anyway let’s bring this back to why this matters for you.
First, whatever you buy today will be obsolete in 18 months. More than likely you have seen this with your phone, etc. The newer model is twice as fast, priced the same, etc. That’s Moore’s law in action. It applies to anything with a silicon chip in it. Your TV, your computer, your car, etc.
Anything more than 5 or 10 years old is definitely obsolete and those that worked on those systems back then are often long gone and moved onto something else, because of the way the technology industry works. That means older is not better. In fact, older is generally expensive to maintain, costs more to run and is usually cheaper to replace than repair. That goes against the fundamental nature of things we are used to in the physical world. You don’t throw your house away because it needs a repair. But you probably would with your phone.
Now another factor of the tech space is globalization. It used to be that all chips were made in the “Silicon Valley” (northern California) or Texas. But that changed in the 1980s and 1990s as other regions wanted a piece of the action. Today most chip manufacture is done in Asian, with a huge amount in China. Still the R&D is being done in the USA for much of it, and therefore in order to keep funding this globalized model, a big part of technology is the concept of “intellectual property” and “licensing”. This is where lawyers meet nerds.
If you spend millions inventing something, but you don’t make it, then you still want some royalty payment for what you invented. Like a songwriter wants the royalties for their song, or an inventor wants royalties for their patent. Software is no different - there’s a license fee associated with using technologies.
But as I said before, technology is based on leverage - you don’t re-invent the CPU for a new phone app. You write the software that sits on an operating system (like iOS or Android), and if that means that the OS requires you to pay money to use it, you bundle that cost into the cost of your product. If we are trying to keep pricing down, there has to be a better way and in the 1980s and 1990s that way emerged.
It was called “Open Source” or “Free Software”. Basically a faction of the software industry that was more “hippie” than their stiff suited IBM types, wanted to create things and basically give it away for humanity. They were not interested in money - they already had salaries and were doing ok. They just wanted to take the stuff they did in their spare time at home and share it with
In July 2018, 32% of cable TV subscribers in the USA had cut the cord and left cable. This was due to the excessive pricing model and the free market's supply & demand model by opening up options to Internet subscribers.
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