I. Concentration Risk

We would never put all of our money into one stock. But many of us put the entirety of our identity into one area: Work.

No wonder, that when that identity is disrupted, we become lost.

“If your existence is all about work, and work goes to shit, then life goes to shit too.” - David Heinemeier Hansson, from Diversify your life

And that disruption is guaranteed at some point. It can come in big, obvious ways:

• we lose or quit our job

• we leave a company we feel part of

• we take a break or transition our career

• we get passed over on a promotion

But the agitation can also happen in many more subtle ways:

• we have a bad quarter

• a bureaucrat introduces a new metric that changes how our work is valued

• a new process adds another distraction away from the work we know matters

• we stop doing the work we love to take on that bigger management role

• we receive negative feedback from someone in charge

• our skills lose relevance as we age

• we lose our drive and wonder if it’ll ever come back

What will we do when our identity shows holes?

For many of us, the plight is existential. With so much of our identity at stake, the very question of who we are is in jeopardy. Our identity, like our life, turns out to be mortal.

So what do we do? We double down, magnifying our focus even further. As the Pulitzer-Prize winning anthropologist Ernest Becker wrote, “The prospect of death, wonderfully concentrates the mind.”

We’ll push ourselves harder, in order to raise the bar on that identity. While, at the same time, reinforcing and defending our current position. Again, Becker:

“This despair he avoids by building defenses; and these defenses allow him to feel a basic sense of self-worth, of meaningfulness, of power. They allow him to feel that he controls his life and his death, that he really does live and act as a willful and free individual, that he has a unique and self-fashioned identity, that he is somebody.”

That identity, at first slowly, then all at once, comes to consume our daily lives. It comes to overwhelm all other aspects, which become crowded out by the obese and expanding mass of work.

What fragile beings we are, with so much stock in one thing. We monitor our identity intensely like the daily ups-and-downs of the market. Everyday needing the value to go up, never able to withstand even the slightest, momentary dip.

Because without this identity, who are we?

II. Diversification

“It’s [...] smart to diversify your identity, to invest your self-esteem and what you care about into a variety of different areas—business, social life, relationships, philanthropy, athletics—so that when one goes south, you’re not completely screwed over and emotionally wrecked.” - Tim Ferriss

There is an answer. Or at least an option.

But it’s not one that our culture (or our leaders) will endorse. In fact, it betrays many of the virtues of focus, single-mindedness, and forever-striving that we have been trained for.

It’s an option we, ironically, already know pretty well: diversification.

When it comes to our money, it’s a nearly impeachable strategy. But it’s nowhere to be found in our personal lives.

• With our money, we seek to smooth the ups-and-downs of the market through diversification. With our identity, we look at our entire selves, then push all our chips into one narrow slice.

• With our money, we develop an asset allocation strategy, keeping an appropriate balance across stocks, bonds, alternative assets, etc., evolving it as we age. With our identity, we haphazardly focus on the most obvious thing in front of us right now.

• With our money, we continually rebalance our assets as the market changes and our needs change. With our identity, we assume it’s fixed across time, disregarding the natural evolution of life.

We can take a new approach. One that isn’t just about avoiding risk, but about having a rich, multi-dimensional life. One that considers our identity not as just this-or-that, but a portfolio of things - able to fuel different sources of motivation through the natural evolution of our life.

III. Example in Action

So how would we implement a diversified portfolio of identities?

It’s easier to explain with an example. Here’s a shot at how my identity portfolio has evolved and may evolve going forward: