The inventory carrying costs of our lives

Early in my career, I worked for a supply chain software company. One of our products helped companies reduce the amount of inventory they carried while increasing sales and availability of inventory.

Carrying the excess inventory resulted in lot of costs. There was the cost of capital tied into the inventory; if the company did not have to hold up this cash, they would either not have to pay the interest on the cash, or use the cash for other purposes. There were additional costs; storing the inventory, moving it from one place to another etc.

And then there was the risk that the inventory would be worth much less tomorrow if the market conditions changed. Imagine you had an inventory of accessories that worked with all macbooks except the latest one; how valuable would it be now.

The inventory in our lives

So why am I going on and on about inventory costs? This is because we carry inventory in our life that we are seldom aware of. And each of that inventory carries substantial cost that you might or might not recognize.

Physical stuff

The most obvious inventory is physical stuff. I’ll give you an example — my kids have a lot of toys. A LOT of toys as compared to the number I had when I was growing up. And in this time of the holidays, they get a lot more. These toys are mostly pretty awesome; I would say my wife and our friends and family have great taste and they give the kids toys that are educational and fun.

But now consider a living room and a toy room full of toys. The kids play with them; stuff piles up. Then there is time for cleanup. Guess who pays the cost of that? Yep, me and my wife. And then there is how the living room looks with the clutter of a large number of games, toys, chachkis …

Of course, Ipick on my kids, but then there is my own closet. The other day, I made a decision to donate any item of clothing that I had not worn in the last six months. Wow! My closet is so well organized, and now I actually look in, use more of the stuff that is there, and (based on my judgement) am much more fashionable 😃

So why the pile of crap?

Why then, does this stuff pile up in our houses? Why are we holding on to the collection of CDs that we never listen to, the toys that our kids never play, the notes from graduate school that we never refer to?

Consider the mental dialog that we go through when thinking about whether to keep something or throw it:

“Should I throw this shirt with the dragon on the back? I last wore it 5 years ago. But it might really look good with that pair of jeans that is two sizes too small. But you know, this could be the inspiration for me to loose that weight! So yes, I should keep it!”

Notice what is going on in the mental dialogue. The true costs are hidden. They occur in the future; so we don’t pay attention to them. There is an implicit benefit only analysis, rather than a cost-benefit analysis. Of course keeping a T-Shirt seems like the logical thing to do when you only consider the benefits it gives.

But if we deeply considered the costs we would notice the following:

1. The T-Shirt needs to be washed
2. The T-Shirt needs to be moved anytime you move
3. The T-Shirt takes up space; in aggregate you end up needing a bigger closet, or you end up cluttering the one closet you have
4. The clutter makes it hard to find something to wear. Clothes — awesome clothes — might stay hidden for years (I am not exaggerating. Happened to me recently)
5. The clutter causes more effort anytime you are putting clothes away after washing them
6. The clutter causes stress. Clean work and living spaces calm us down
7. It becomes to find other clothes you might like more
8. You have to make a decision; what to wear. The decision is harder with more choices

Beyond stuff

Until now I only mentioned the physical stuff. Now let’s talk about the mental stuff — the stuff that really starts to take its toll.

Consider

• How many grudges, biases, perceptions do you carry about people you carry? How much does that harm your relationship with them?
• How many decisions are pending in your life, which you keep revisiting because you have not made them?
• How many negative emotions and worry do you carry around in your life?

This is mental inventory that is building up over time. It is like a tax that you pay mentally every time you go to make a decision. Every time you start something new. The tax affects you when you want to relax, when you want to work, when you want to sleep.

Letting go

First we change our mental models. Then we change our behavior. And that re-inforces our mental models.

There is an image from one of my favorite books of all time from Vishen Lakhiani called the Code of the Extraordinary Mind.

From Code of the Extraordinary Mind

We grow through new models of reality; we carry these models of reality around with us everywhere. Once we change them, we can bring along a step change in our lives. As Vishen says “Changing a model of reality is a form of growth that often comes from epiphany or insight. It’s a sudden awakening or revelation that shifts a belief. Once you adopt a new model of reality that is superior to an older model, you can’t go back.”

This is the most invisible, yet most costly inventory in our lives. We are like fish and these models are like water; we don’t notice them, yet they both enable us to slim AND slow them down. When we change models, we evolve to adapt to the new models. (OK, I know the fish cannot evolve so fast without water and the analogy broke down. But just stay with me)

What it requires

What does letting go of this inventory requires? The first step is awareness. And now you have it. You know that the inventory carrying cost is real.

But the next step is much harder; it is action. It is about making decisions differently.

I operate via a method that most people don’t follow. I have a set of questions that I have written down for the major situations I come across in my life. Not that I refer to these questions all the time, but every so often I do; and it changes my decisions and the actions that I take. So for example, when I am looking to buy something new, I question

• Do I love it?
• Can I rent it?
• Can I borrow it?
• Will I love this in a few months?
• What is the cost to maintain it?
• What is the effort to maintain it?
• What else would I rather do with the money

Similarly for problems I face, I have a set of questions I follow (Thanks Tony Robbins for majority of these)

• What is good about this problem?
• What is not perfect yet?
• Why am I dreading it? What mental models are at play here?
• How can I have fun while working on the problem?
• What will I reward myself with once I have solved the problem?

Let go

Here is an exercise for you. Go to your closet. Find everything that you can say confidently (“I love it”). Love it because it is convenient. Love it because I look great in it. Love it because its comfortable.

Now throw out the rest.

Reflect on it the next time you go to find something to wear. You will only see things you love. But you will have enough clothes. And someone else will have the clothes you donated.

Next do this to other physical stuff in your house.

Once you like the changes, you will have motivation to change the mental stuff. That’s the hard part. And so worth it.

Start small. Think of one mental model you carry around. Build a set of questions around the situation you come across the mental model in. Next time you are in that situation, go through the questions.

You will start to see the effect of these changes.

Let me know how you do. And also, if you get stuck on what questions to generate, do get in touch.

Now, As the wise man Tim Gunn says, “Make it work!”

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