# Welcome Start here This book is, or rather was, a work in progress. A new version, short enough to maybe be finished before I am, is underway in the background. In the meantime, check out the [Substack](https://moneyblind.substack.com/?r=2o448s\&utm_campaign=pub\&utm_medium=web), or read the newsletter archive [here](https://news.moneyblind.net/). ## Must money seem scary and complicated? Money Blind is a book about systematically overcoming self-deception around your finances. It’s written for all those who’ve ever wondered what to do with the money in their life. What to do with money – be it spending, saving, or investing it, or thinking about it and living with it – confuses everyone, regardless of how much of it they’ve got. Yet I believe that everybody already knows the majority of what they need to make the most of the money in their life. And the rest is ridiculously quickly learned. But it’s hidden. By the wiring of our brains. By the influences of society. And by an investment industry that’s incentivised to make you believe that managing money is so scary and complicated, that you’re better off hiring help before even contemplating what help it is that you need, or whether what’s relevant to you is really so scary in the first place. Money Blind is my attempt to rewire your brain, rethink external influences, and re-examine what good advice looks like, to reveal and realise what is relevant about your relationship with money, and ultimately help you revolutionise it. What is Money Blind? It's [this](https://book.moneyblind.net/the-book/1/1.2/1.2.4#what-is-money-blind). ## Read me! Being a book, Money Blind is best read from the [beginning](/the-book/intro). The order of the insights isn’t random, so your consumption of them shouldn't be either. But starting a book – even one chopped up into chunks – may not look too tempting right now, however valuably the content compounds. In which case, you may like to check out the [newsletter](https://moneyblind.substack.com/) instead. If you want to roam in the meantime, the [If... Then...](/contents/if-then) menu may help. ## Other bits and pieces **Sharing** – If you find something useful, or thought-provoking, don’t keep it to yourself. This shit affects everyone. And what sort of scoundrel doesn’t help their friends? Plus, friends that save money are friends with more money to buy you presents. Be it a link to an individual page, or a nudge to [sign up](https://moneyblind.substack.com/) for themselves, please share the love. **Comments** – If you want to say something about the content, nice or nasty, go [here](/contents/contact). Reading guaranteed. Replying not. **Contents and non-contents** – See [here](/contents/synopsis) for an overview of what this book includes, and [here](/contents/non-contents) for what it doesn’t. **Footnotes and endnotes** – They’re untidy and unhelpful. Sorry. If you know how to make them better within Gitbook, please [let me know](mailto:belgarvm%2Bgitbook@gmail.com?subject=I%20am%20a%20Gitbook%20guru). **Long pages** – Some of the pages take up to 20 minutes to read (though most are under 10). You’ll get no apology from me for this. If people only ever want Twitter trivialisations, then they don't want to become wiser, and with the best will in the world, I'm not going to be able to help them. On the plus side, 20 minutes of Twitter scrolling will be 99% reactive ephemera at best, hateful drivel at worst, whereas each page here should be stuffed with useful insights (and if it’s not, tell me!). # Introduction What this is all about: the main aims and thematic threads Three core ideas that we'll come back to in every part of the book: * **Money screws us up in self-deceptive ways**. This is especially unfortunate, because the point of self-deceptive problems is that you lead yourself astray. You end up wasting your life trying to 'solve' other problems, staying blind to what you actually need to do, or, worse, actively believing that the real problem applies only to other people. * **You are at constant threat from your craving for simplicity and certainty in an inherently complex and uncertain world**. You cannot see self-deception head on, but you can come to see its effects. The main ones, in terms of both frequency and intensity, are the ways in which you desperately grasp for simplicity and certainty. * **There is a better way**. You can overcome self-deception. You can train yourself to improve the money maps in your brain, which of course, is where your relationship with money is written. {% content-ref url="/pages/-MallKG11Q58r67Wn-LH" %} [Revolutionising your relationship with money](/the-book/intro/0.0.1) {% endcontent-ref %} # Revolutionising your relationship with money Money profoundly affects our lives, for good and for ill, and in ways so hidden we’re hostage to them; to take control, and channel the energy of money to our benefit, we need to train our vision Money fucks us up. It fuels our external journeys, but it distracts us from our internal ones. We’ve forgotten how to access mental security because it’s so much easier to buy the cheap material substitute. We want self-improvement, but self-deception is so much shinier, and it’s always on sale. There are three things you can do with money – spend it, save it, and invest it.\[1] We reliably do all of them not only worse than we could, but in a way that compounds stressful thoughts, rather than eases them. The causes of this run deep. They’re woven into the seams of our societies and mapped inside our brains. Being wiser with money is about far more than efficient and effective saving, spending or investing. It goes to the root of our sense of and understanding of our ourselves. Some think a certain level of money whitewashes these problems out of existence, or at least out of consciousness; out of sight, out of mind. My job was to be in these minds, and I promise you their problems were far from out of sight. Others believe problems go away if you denounce them. Yet calling money evil doesn’t absolve you from your attachment, it tightens the screws. It doesn’t have to be this way. Money may be necessary, but its evils are not. To borrow from *Hamlet*,\[i] there is nothing either good or bad about money, but thinking makes it so. To one it is a prison, to another a paradise. On its own, money is meaningless. It is contact with humanity that imbues money with magical powers. Chief among these is its power to change our minds – literally. Amid the unceasing cultivation of neuronal connections that adapts us to survive and thrive in changing circumstances, our interactions with money trigger paving or pruning of neural pathways like nothing else. Because it runs through everything we do, money is the best place to focus whatever energy we can muster for behaviour change. Embedded in our lives means embedded in our brains, whether we like it or not. Few things excite our emotions like money, yet because we pretend we become robots in our dealings with it, we get a distorted view of money, ourselves, and how the two interact. The relationship we each have with money – that is both shaped by and in return shapes our mental maps – is under our control. This is excellent news. For it means money messes us up only when we choose to let it. We can, if we choose to: * free up time, energy, and money itself, and increase the quality of everyday life, simply by changing how we think and act with money; * align our uses of money (what we care for) with what matters most to us (what we care about); * see money as a source of comfort and confidence, not as complicated and scary; * learn how to spend our money to make life better, rather than simply more expensive; * learn how to see savings as a sign of self-love, rather than self-deprivation; and * learn how to reap the rewards of investing without needing a crystal ball or a maths degree. In short, we can go from being fucked up to flourishing. From relying on beliefs to seeing more clearly. And we can do it all without equivocation or fortune-cookie claptrap that overuses the word ‘abundance’ and overlooks how to engender real change. \* In addition, this book will help you understand all you need to know about the weird world of financial advice, including how to spot a good adviser from one that looks even better but is giving you a hug only to distract you from your pockets being picked. And why the adviser you think is the best for you could well be the worst. The journey towards financial enlightenment begins with philosophy. You can sort your finances ‘perfectly’, but without getting *your* philosophy sorted first, you may be less fucked up, but you’ll be far from flourishing. Fertilising our neural soil with philosophy allows us to nurture an all-weather wisdom that transforms how we think, feel, and act with money, that strengthens us from the inside out, and that makes the right call the effortless one, forever more. This is wisdom in the sense described by historian Will Durant: ‘an application of experience to present problems, a view of the part in the light of the whole, a perspective of the moment in the vista of years past and years to come.’\[ii] For millennia, wise minds, from ancient philosophers to present-day neuroscientists, have mused about our relationship with money. Along the journey of this book, we will borrow their wisdom, internalise it, and forge it into a practical toolkit for revolutionising that relationship. {% content-ref url="/pages/-MallKd\_pLLKEbWENKEX" %} [Better money decisions, step by step](/the-book/intro/0.0.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] There are innumerable ways to categorise what we do, of course. This model is the best for our purposes. If you’re wondering where ‘give it away’ fits in, it’s in all three, but mostly spending, for, as we’ll see later, it’s a fundamental means of allocating your resources towards living a Good Life. \--- \[i] Allusion to William Shakespeare, *Hamlet*, Act 2 Scene 2 \[ii] Will Durant, *Fallen Leaves* # Better money decisions, step by step The practical steps on your path towards financial enlightenment are an unfolding story of becoming wiser with money, its star’s fate determined by each fork in the road Money is the great universal. That’s sort of the point of it. This means it gets involved in all sorts of decisions. To do one thing is to not do a million other things. The way your brain works says that how you do anything is how you do everything: every decision is a vote for one version of you over another. Grand stories are told in gradual steps. By assigning a translatable value to the competing components of each decision, money can save us from paralysing confusion. But it can – and regularly does – go too far. Having a universal converter doesn’t stop an incalculable number of decisions needing to be made. We need mental defaults. But the defaults we’ve ended up with aren’t wise ones. Our common money defaults deceive us, and ruin our decisions. Doubt is drawn to kicking cans down roads. Yet later is just now with less time to enjoy living with the outcome of whatever decision it is we’re dodging. This is why a grounding philosophy is so important. Because it wisens up our defaults, linking them to a vision big enough and cool enough to get us to stop and think things through, rather than being blindly swept away by self-deception. ‘Nothing is easier than self-deceit,’ said Demosthenes, ‘For what each man wishes, that he also believes to be true.’\[i] And ‘No hell is worse than that in which one lives without knowing it’\[ii] wrote Alan Watts, 2,000 or so years later. We’re not great at dissolving this deception. Money may be most prone to expressing these errors, but it also gives us the best starting point for correcting them. At each moment of decision, our self-deceiving beliefs about money send us down unnecessarily dumb and dangerous paths. Becoming wiser with money steers us instead in the direction of our dreams – towards financial enlightenment. The aim of this book is to inject a shot of consciousness at each crossroads, to break unhelpful patterns and build better ones in their place. The three main sources of monetary self-deception are: * Believing money is something you have, rather than part of who you are. * Believing other people’s money defaults can be valuably adopted as our own. * Believing the importance of money lies in numbers, rather than narrative. The way we cede control to these self-deceptions is subtle; that’s how self-deception works. Mental mirrors can be uncomfortable to look at. Rear-view ones that force us to reflect upon what we’ve done with our lives are all the more so. But the pain of not confronting them, of remaining trapped by them, far outweighs the discomfort of doing so in a quest for freedom. Financial enlightenment is not a state. It is a process of cultivating a positively reinforcing capacity for making better decisions. It is your sight, not your soul\[1], that needs to change. This is about self-love, not self-control. It calls for clear thinking, not hard-assed discipline. It’s not about learning lessons, but practising them. ## The path towards financial enlightenment Enlightenment is both everyday and ethereal and is a mode of operation of the brain and the body, not the pot of gold at the end of a checklist of circumstances In any anthropocentric tale, the point of a path is rarely its destination. Humans move along paths to grow; to arrive is to stop moving, to stop growing. A focus on a destination may start you going somewhere, but maintaining it gets you nowhere. Dreams of a somewhere may ignite a spark, but it’s nurturing the fire within us, not the light on the horizon (or across the bay), that warms our lives. We need both a zoomed-out view to check we’re on the right path, and to zoom-in on each individual step that keeps us there. The flourishingness or fucked-up-ness of our fate flows like a waterfall from a cascade of droplet-sized decisions. Little lifestyle choices add up to big brainstyle choices. On the one hand, this is lucky. Money is an ever-present at the forks in our mental roads. It’s the perfect vehicle on which better-decision-making machinery can hitch a ride. On the other hand, this is unlucky. For ten thousand reasons, the paths either side of each fork are not created equal. The bad way is often a highway, with a flood of fancy cars offering lifts, while the right way is overgrown with weeds, barely visible without hours of hacking about with a machete. ## Becoming wiser ***We want to become wiser with money more than we want to become loaded with it; this requires a process of seeing more clearly, not making more money*** To take the path towards financial enlightenment is to participate in a process of becoming wiser with money. It is the becoming wiser, not the being wise, that is important. It is a participatory process because money isn’t wise by itself, and you cannot be wise with it, without it. Becoming wiser is to see the right path more clearly, by clearing out the weeds of self-deception, in such a way that we progressively and systematically side-step future self-deception by default. Each step is a choice, between self-deception and its opposite, rationality. Our rationality is our capacity to overcome self-deception in a reliable and systematic manner, so that we may stay on course, take the right next step, and trigger a cascade of insights that levels-up who we are and what we’re capable of. Rationality isn’t about not feeling. It’s about a more refined appraisal of inputs into our predictive model of our place in the world – and feelings are very much part of these inputs. But behaviour-changing protocols that rely only on exciting emotional responses are not reliable if the excitement fades before the habit highway forms. ### Intelligence, rationality, and wisdom The time to dive more deeply into the cognitive science of wisdom, and how it relates to being better with money is at the end of Part Two. Here and now, it’s worth being clear on the differences between intelligence, rationality, and wisdom.\[2] Intelligence is your capacity for being a general problem solver. It is your intelligence that allows you to pick things up with your mind, play with them, manipulate them, and use thereby use them to make sense of the world. Intelligence is not possessing knowledge; it is zeroing in on the most relevant information in a noisy universe to better work out what is going on, and what to do. This zeroing-in is not logicality, i.e. it is not checking every option (and combination of options) and rejecting all the duff ones.\[3] That’s impossible. Not even chess computers work like that. It’s a capacity for *ignoring* all the duff ones. Rationality is your ability to deal with self-deception. Your self-deception arises inevitably from the same machinery you use to solve problems. Because it *cannot* be logical, your brain solves problems by using shortcuts. Self-deceptions, as we’ll see in the next section, are shortcuts gone awry – substituting a tempting easy answer that looks and feels right, for one that actually is right. Intelligence and rationality are therefore quite different things. In the way we make and use money, we often jump to conclusions driven by believing we’re being intelligent (or will be seen as intelligent)… jumps that are often inspired by self-deceptive, self-destructive beliefs. However, the hallmark of rationality is valuing the process, not being fixated on the belief and the conclusion.\[iii] As cognitive science has demonstrated, sometimes the processes that cause you to be intelligent also cause you to be irrational. The distinction is vital for training yourself to become wiser with money. Intelligence is necessary but insufficient for making you rational. Intelligence is a capacity. Rationality is an ability. This is important. Because: a) there’s not a huge amount you can do to become more intelligent, but you *can* become more rational; and b) becoming more rational is more important than becoming more intelligent anyway. In the words of John Vervaeke: ‘Intelligence is not a synonym for being rational. And what you should ultimately care about is not how intelligent you are but how rational you can become.’\[iv] As with life, so with money… For when it comes to money, we worry far too much about the ‘intelligent’ or ‘logical’ problem-solving ‘answer’, when a wiser, more rational approach would remember the emotional human life story that those ‘answers’ should be serving. It’s hard to define wisdom in an especially helpful way. Because it is more a characteristic of a way of living than it is a definition of static state, choice, or even series of choices. It’s the cultivation of a dynamical system for countering the equally dynamical system of self-deception, and consequently for affording a flowing, flourishing, meaningful life. ‘Wisdom,’ wrote Socrates, ‘begins in wonder.’ The sort of wonder that opens you up to the possibility that aspects of your worldview, however well-engrained, and however well-enforced by internal and external guardians, could be bullshit. The sort of wonder that upon being open like this is motivated to challenge previously jumped-to conclusions, and, when they’re found wanting, to aspire to find a better way. Right now, going beyond that isn’t important. Which is why we’ll return to it later. ## The becoming mode v the having mode ***If you misidentify the needs you are trying to meet, you’ll only ever meet them by accident, causing more frustration than flourishing; most misidentification comes from seeing ‘having’ solutions for ‘becoming’ needs*** Money misleads us into believing it will bring us what we want, when in reality it is only a well-disguised substitute. ‘As a man is, so he sees,’ wrote William Blake.\[v] If we are to stop being misled by money, we need to start living in a different mode. > At the very roots of our language we find two verbs: ‘to be’ and ‘to have.’ These words have become so absorbed into our unthinking everyday discourse that their primordial meaning has been lost. However, they denote two of the most fundamental dimensions of our existence: those of having and being. These two dimensions reveal two distinct attitudes towards life. In terms of having, life is experienced as a horizontal expanse precipitating towards ever receding horizons; in terms of being, life is felt in its vertical depths as awesome, foreboding and slightly mysterious.\[vi] Some wants are met by having something. We relate to them in a subject-object fashion. There is ‘I’, and there is ‘it’. ‘I’ owns ‘it’. ‘It’ can be controlled by ‘I’ in service of solving problems. ‘It’ is replaceable. There are many ‘its’, and each one is a good-enough substitute for all the others. Other wants are met only by being, or rather becoming something. Like wanting to be in love, or wanting to become mature. We deceive ourselves into thinking becoming mature can be met by owning a house, or being in love can be met by having sex, but not only does this never work, but because we are deceived, we remain puzzled as to why it didn’t work, and end up blindly trying the same thing again. And again. No second house has ever met the need its prospective owner believed it would. ‘Becoming’ wants are about a relationship, between you and the world, or you and another person, or you and yourself. They relate not to solving isolated problems, but to the very meaning of your existence. Relationships are expressions: they do not fall into neat categories; and finding adequate substitutes is not easy. In the words of Erich Fromm, whose landmark book *To Have, Or to Be?* set out the distinction, being and having\[4] ‘do not refer to certain separate qualities of a subject as illustrated in such statements as “I have a car” or “I am white” or “I am happy.” ’ They refer, rather, ‘to two fundamental modes of existence, to two different kinds of orientation toward self and the world, to two different kinds of character structure the respective predominance of which determines the totality of a person’s thinking, feeling, and acting.’\[vii] It would be a mistake to think of one mode as good, and the other bad; they each have their place. What is very bad indeed though is when we try to meet being mode wants with having mode answers. Unfortunately, inciting this confusion is the foundation of marketing, and marketers have got awfully good at it. Want love? Want maturity? Have sex! Own a Ferrari! Have sex in your Ferrari! ‘In the having mode of existence,’ wrote Fromm, ‘my relationship to the world is one of possessing and owning, one in which I want to make everybody and everything, including myself, my property.’\[viii] We believe that if we ‘own’ the answer to our wants, we will be somehow secure. It’s a tempting illusion. Sadly, it’s bollocks. Haves will only take us so far. And when we use having something as a substitute to becoming something, where it takes us is far away from where we want to be. When Prince Siddhartha Gautama left his palace – where he allegedly ‘had’ everything – on his way to becoming the awakened, enlightened one (the ‘Buddha’) this is what he came to realise. If anything feels more like something you have rather than something you are in the process of becoming, it will never feel real. Consider the difference between ‘having’ health versus living healthily, or a job title versus being the competent creator of value for others. In all cases, becoming who you want makes having what you want happen by accident. The reverse is not true. Faking it really can make it, as dreams of a having a six-pack can kick-start a journey to living healthily. But it can also end with a life in service of a metric, rather than a metric in service of a life. In a choice between fundamental modes of existence, metrics are signs of things to be forcefully done, rather than expressions of a way of living. And chores always eventually go undone. ## Thinking v unthinking ***In existential-anxiety-driven desperation we grab at anything that saves us from thinking; sometimes this is wise, but given how well it is woven into the fabric of our lives, making money decisions unthinkingly is unparalleled idiocy*** When the bad way is the highway it doesn’t take a lot of effort to zoom along down it. In many instances, it takes no effort at all. When defaults go bad, inertia carries us to places we don’t really want to be. It is less a path, and more a conveyor belt. Jumping into a car simply because it’s chaffeur-driven isn’t always wise. Where we’re going is important. How we experience getting there is more important still. You can’t climb a mountain in a mobility scooter, and even if you could, you’d feel worse than if you’d hiked up instead. The more we hike, the easier and more enjoyable it gets. But to keep it enjoyable, we don’t keep it easy. We seek new challenges. A baby doesn’t take its first steps, think it’s nailed it and put its feet up. It learns to run. When it comes to the forks in the road on our path to financial enlightenment, we need to see thinking in the same way. The conveyor belt of unthinking will always be tempting, but that doesn’t mean we want to hop on. Unthinking is unquestioning. Often we allow ourselves to be ruled – and ruined – by beliefs that wouldn’t survive the slightest scrutiny… if we bothered to subject them to any. The inaction of unthinking inertia is broken by thinking. This doesn’t happen automatically. We need to train our vision for mental triggers – thoughts, words, phrases, and concepts we know we’ll encounter that we can use as reminders to confirm the consciousness of our actions. That remind us to pause and think before blindly going off course. Do this often enough, and you soon start to dance through your financial life not with discomfort and confusion, but with effortless effort. Doing without feeling like it’s a chore. Fighting without feeling like it’s a fight. Thinking is not the same as believing. We commonly say ‘think’ to describe a process involving precisely zero thinking. I caught myself doing this at least a thousand times in writing this book. Questioning what we have really thought through and what we’ve unthinkingly reacted to is a non-negotiable when initiating any behaviour change. ## The narrative path v the numbers path ***The objectivity of numbers isn’t an antidote to anxiety associated with the uncertainty of a human life, it’s an enabler of it; an exploitative deception that rather than removing the difficulty inherent in human complexity, removes the human from it*** Money’s role in our stories seems like it should be super simple. It’s odd how it doesn’t work out that way. Why do those with money not live reliably better than those without it? Odd, that is, until you realise that not only does it not work this way, but it *cannot* work this way. This isn’t because money cannot buy ‘happiness’\[5]. Because it can. Just not the way we believe it can (N.B. this isn’t about ‘buying experiences’ either). We deceive ourselves when we believe money’s role in our lives is about inanimate numbers that decorate the narrative, rather than being a living, breathing part of the narrative itself. Money is integral and instrumental, not merely incidental, to the story we tell ourselves about ourselves. At each fork in the decision-making road, our options can appear daunting. As we constantly encounter new forks, there is no way to forecast where each explosion of possible path combinations will lead. It would be like trying to calculate every combination of chess moves. Not even the biggest, baddest, computers come close to doing that. Instead, they filter. So should we. All forks are defined by seeing money as either a mere number, or as part of our narrative. To see the distinction more clearly requires unlocking overlooked ways of knowing. We will look later\[6] at the different ways of knowing something, from propositional (facts), to procedural (technical skill), to perspectival (relevance in context), to finally participatory (how we interact with something – how it changes us, how we change it, and how a meaning emerges that belongs to neither it, nor us, but to the interaction). By necessity, we know money in a participatory way. Yet when it comes to money, we ignore this type of knowing, keeping this apparently inanimate, functional medium of exchange firmly in the first two categories, with perhaps an occasional peek into the third when for a brief moment a Mastercard advert reminds us that there are some things money can’t buy, before we nod sagely and go shopping for ‘everything else’. We shall also look at how, when considering the classic pictorial timeline of evolution – where knuckles cease to drag, and everything gets rather less hairy – we must dress the figure at the end, so integral are our clothes to who we are. And how outside of a proportion of people that rounds to nothing, we must also give this tip of the evolutionary chain some money (and companionship to share its story with). \* Your life is not a number. It’s a narrative. So why chase a number as the way to enrich your story? Why try to become what you want by having something as a substitute, when the having never works? Why trust to the impersonal luck of unthinking, when the personal judgment of thinking is always available? Why settle for anything less than becoming wiser with each step? {% content-ref url="/pages/-MallKrPIA4eWSyiDVS-" %} [The slow suicide of monetary self-deception](/the-book/intro/0.0.3) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] ‘Soul’ should be read as analogous for ‘what you want, deep down at the core of your being’. ‘Soul’ may be a bit of a tricky term, because it is inherently impossible to ‘pin down’. That is a feature of its import, not a bug. There is nothing more important in our actions than authenticity. We all know on some level that fleeing from the full actualisation of our potential feels so shitty because it feels so inauthentic. There’s no better guide to authenticity than the body… once we’ve learned to listen to it amid the noise of all the crap both within and without of it. The drive to oversimplify, to narrow a vision that our innate humanity wants to expand, to pin everything down, is at the heart of the self-deceptions that mess us up, as we’ll see in the next section. \[2] In outlining both definitions and applications, I am indebted, once again, to the work of John Vervaeke. \[3] The combination part is very important. However well it works in isolation, a solution to a problem isn’t intelligent if it harms your ability to solve future problems (for example by wiring you to be closed-minded in relation to a particular issue). \[4] Fromm uses ‘being’ rather than ‘becoming’; I prefer ‘becoming’, though the distinction is not hugely important, and in referring to modes of existence, they are interchangeable. \[5] We’ll discuss definitions of ‘happiness’ and related terms in [Part 1, Section 3.4](/the-book/1/1.3/1.3.4). \[6] [Part 1, Section 3.2](/the-book/1/1.3/1.3.2). \--- \[i] Demosthenes, quoted in Peter Bevelin, *Seeking Wisdom* \[ii] Alan Watts, *Become Who You Are* \[ii] As explained by John Vervaeke, *Awakening from the Meaning Crisis, ep. 27* \[iv] John Vervaeke, *Awakening from the Meaning Crisis, ep. 27* \[v] William Blake, Letter to Reverend John Trusler August 16, 1799 \[vi] Stephen Batchelor, *Alone With Others* \[vii] Erich Fromm, *To Have, Or to Be?* \[viii] Erich Fromm, *To Have, Or to Be?* # The slow suicide of monetary self-deception The major ways we deceive ourselves about money involve blindly substituting something that doesn’t work for something that does ## The siren call of simplicity and succumbing to substandard substitutes ***Beware shortcuts taken for the sake of simplicity… they’re the ones most likely to lead you astray*** The three sources of monetary self-deception noted above, and their viral expressions that run riot throughout this book, have one thing in common. Each one caters to a craving for simplicity and certainty in an inherently complex and uncertain world. The unrelenting uncertainty of the world is bit of a pain for brains that evolved as prediction machines in charge of a litany of life-or-death choices in changing environments. Dealing with the inherent impermanence of everything in our worlds – both inside and out –is impossible without taking shortcuts. Not even a chess computer works through *every* possible move. The more you presume, the less you have to predict. Our assumptions, generalisations, and narratives have not only kept us humans alive, but have catalysed our crowning civilisations. However, the machinery that leads us also misleads us. At any moment, were we to attempt to logically calculate the consequences of the choice-combinations that define our possible future paths, our heads would explode. Logical decision-making is an impossibility. So we focus on what feels most relevant. Much like how our vision is not the perfect panorama we perceive with our eyes, but constructed from a focus on the middle bit with the brain guessing how to fill in the gaps.\[1] More often than we’re comfortable admitting, both our constructed vision our constructed worldviews can fail to match up to reality. We want to make things simple so we can act fast – or even act at all. It’s good to have a decent margin for error when deciding if the noise you hear while sauntering through the jungle is likely to kill you. But this innate desire for dumbing down can go too far. If you think *everything* is going to kill you, then you (and those around you) will soon start to wish something actually would. Because of the way it’s interwoven into every aspect of our daily decision-making, the consequences of these shortcuts when it comes to money can be catastrophic. They may not kill us, but they will kill our potential. Just about every way we stray with money can be characterised by succumbing to a substandard substitute – trying to meet a real need with something that makes sense only with a distorted view of reality. In each case, we grab at a simplistic ‘solution’ to an ill-defined ‘problem’. When this doesn’t work we question not the process that defined the problem or arrived at the solution, but something outside of our control – we blame other people, an unfavourable environment, or simply bad luck. Whatever maintains the favoured fiction of our short-term and short-sighted approach to the long-term complexity of living. In the previous section we covered the three predominant shitty substitutes: trying to meet ‘becoming’ needs (which by definition involve change) with fixed ‘having’ answers; doing whatever dodges thinking something through (while ideally feeling like we’re being very thoughtful); and focusing on seemingly objective numbers as a proxy for decisions affecting the narratives of our lives. The legion of subtler substitutes we’ll explore throughout this book all lead back to one or more of these three. For example, the lure of ‘luxury’ goods as a substitute for the sort of character that, if actually present, wouldn’t care for luxuries; deciding that a fund manager being based in Blackpool is a clever reason to invest with them; and how the call to ‘buy experiences’ so commonly backfires. We can’t destroy the drive for simplification, and nor would we want to. But we can learn to calibrate it and control it. We can’t ‘remove’ substitutes, because on some level everything is a substitute: we do not directly ‘do’ meaning – we do other things and meaning happens as a side-effect. However, we can make assumptions without becoming attached to them. We can take shortcuts without doing so blindly. And we can act *as if* something were true, without being fixated on fixity – without assuming we’ve found a universal law that turns us from open-minded testers of such theories into closed-minded protectors of them. ## Simple, complex, complicated ***Understand the difference between simple, complex, and complicated; and then pursue profundity, and avoid triviality*** If we’re to more accurately and reliably calibrate when we’re being simple and when simplistic, we could do with a clearer understanding of what we mean when we use terms like ‘simple’, ‘complex’, and ‘complicated’. The intention behind the modern trend for ‘explaining complex ideas in simple terms’ is wonderful, but the obsession with it impedes insight and shuts down the very engagement with a topic its obsessors believe it brings about. When you hear someone praised for being ‘good at explaining complex ideas in simple terms’ there’s a high chance that what you are hearing is a piece of crap. Grasping why is fundamental to financial advice. People seek financial advice because they think – or rather believe – that finance is complex, that the complexity is numbers-based, and that therefore it’s worth paying someone who understands the numbers to make the complexity go away. This is thrice-flawed. The numbers bits of finance that are relevant to you are simple, the complexity comes not from the numbers, but from the narrative of your life, and complexity by definition cannot be made to go away. Complication, however, can be made to go away. Underneath a complication is a simple algorithmic answer, waiting for the processing power fit to uncover it. Where simple is a clear path from input A to output B that anyone can follow (like a basic recipe), complicated is a knottier path. You’re still aiming for B, but you need more skill or information to get there. It’s a recipe, but with obscure ingredients and a fancy gadget you’ll never use again. Sometimes this is merited, but often the obscure ingredients add more to the ego of the eater than the depth of the flavour. Complex is different. Inputs in a complex situation move. They dance with their environment in a way that changes them both. The ‘dance’ that emerges is a new entity, reliant upon, but independent of, its elements. Changes in its elements change it, and changes in it change the elements. Potential outputs span a range. Tracing a line from one side to the other with any confidence is a predictor only of the idiocy of the person doing it. You may begin at A, but you could end up at B, C, D, or Z, by one of an infinite number of paths. Complex therefore compels focusing on the journey, and the course correction, not the destination. It’s not a recipe, but a nutrition plan for a human. While complications can be dissolved, to ‘simplify’ a complexity is to distort it, resulting not in simplified, but simplistic. It’s comforting, but crap. Simplistic versions can be stepping stones – children read Dahl before Dostoyevsky – but they’re not substitutes. True complexity is irreducible. When people see scary numbers-based ‘complexity’ in finance, what they are seeing isn’t complexity, but complication. And it’s often wilfully exploitative. Because people are either being stupid or trying to sell you something, simple things are made complicated such that we praise those who cut through the crap, rather than blaming those who put the crap there in the first place. Much of finance involves institutions creating crap and then charging individuals for ‘managing’ it. Unfortunately, complex and complicated (and simple and simplistic) are hard to distinguish. Yet the distinctions are important. Because scared minds – as ones thinking about money often are – are so desperate for simple answers that they beg to be sold them, blind to the fact that such answers not only don’t work, but can’t work. ### In defence of simplicity Most simple takes on things aren’t *wrong*. They’re just more domain-specific or context-dependent than their more vocal proponents would have you believe. It’s more instructive to see Einstein as more clearly defining the boundaries within which Newton was right, than as proof that he was wrong. Pithy philosophical Tweets may be mostly pointless, drifting as they do in a contextless, nuance-less, understanding-less ocean of irrelevance, but they’re rarely *wrong* in all times and places. On a good day, they can be of service to the originator, for helping to both consolidate and act as a reminder of the work of understanding something, and may also be the cue that causes the penny to drop for someone else. Outside of the context of how to live (i.e. of philosophy), what jumping to conclusions loses in wisdom, it makes up for in expediency. Even the sharpest minds have limited capacity; it makes no sense to use that capacity in contexts where the aim is to accumulate knowledge rather than to cultivate wisdom. However, regardless of the perception attached to trillions of transactions by billions of people every day, our interactions with money are rarely so trivial. ### The dangers of simplicity The biggest danger of the simplistic consequences of our craving for certainty is beautifully encapsulated by Will Durant’s quip that: ‘The fertility of simplicity defeats the activity of intelligence.’\[i] We fail to keep simplicity in its place. We do not preserve our capacity for conscious thought for when we need it, but train ourselves to avoid it as a default. As Nietzsche wrote: ‘Anyone can be so fatigued and weakened by agitation, fears, overloading with work and thinking that he will no longer resist anything that appears complicated but yield to it.’\[ii] Yet it is precisely in those moments of heightened emotion that we most need wisdom. And in both frequency and intensity, no decisions are quite as emotional as financial ones. The blind belief that simple always equals best suffers from these six problems: * The Having Control Problem – ‘Having mode’ solutions are centred on controlling something, be that owning a material possession or reducing the understanding of a concept to a soundbite. Yet most needs are not met by exercising control, but by enhancing meaning.\[iii] ‘Becoming mode’ solutions, by contrast, are met by developing your relationship with yourself and the world – changing on the inside and inhabiting a different outside. * The Richard Feynman Problem – Astrophysics is, on average, complex. Those that work in it are more used to talking to each other than to people that don’t speak astrophysicist. A shared language and grammar within a complex discipline is necessary for precision delivered at a non-patronising and non-pointlessly placid pace. Some parts of astrophysics are not complex. For example, a simple experimentally obvious expression of a complexly derived law. These simple expressions can be delivered without the precise language required for the understanding of the underlying laws. Richard Feynman was the absolute master of sharing such examples – of sharing simple versions of complex ideas in a fittingly simple, uncomplicated, way. However, to conflate understanding of the simple expression with understanding of the underlying complexity is to err. In the same way, there appears to be zero correlation between those that share Stoic quotes on Twitter and who display any evidence of a stoically calm mind. Simple versions can serve as stepping stones, but they are not shortcuts. * The Michael Pollan Problem – Michael Pollan’s written three excellent books on food. The first is an inch thick and contains the sort of structured, layered, argument that compels not only behaviour change, but worldview change. It can’t do specific context for you, but offers a silent encouragement to examine your life for potential applicability. The second is a centimetre thick and will make those who’ve read the first remember it, and those who haven’t think a bit, though fundamental shifts in behaviour – let alone wiring – are less likely. The third, Food Rules, can be read in an hour. It’s a great summary of the first two, but if your relationship to food has already changed, it’s unnecessary, and if it hasn’t, this on its own won’t do it. Yet it fills a popular hole that believes the ‘just tell me what to do’ version is all that’s ever needed. * The Immanuel Kant Problem – Sometimes, if you can't explain something simply, you don't understand it. But sometimes it’s because *your audience* is in no position to understand it, and effort expended on trivialising something complex (assuming it is also something meaningful) is effort that would be better directed towards tackling ever-more complex problems. ‘I venture to hope,’ Kant wrote, ‘that the difficulty of unravelling a problem so involved in its nature may serve as an excuse for a certain amount of hardly avoidable obscurity in its solution. \[…] Had I longer delayed and sought to give it a more popular form, the work would probably never have been completed at all.’\[iv] Kant said, in effect, that other people could bridge the gap between his understanding and everybody else’s; his time was better spent pressing on into the areas that only he could understand from scratch. * The Alexander the Great and the Gordian Knot Problem – The Gordian Knot, legend has it, was so hard to untie that whoever managed it would be fit to rule the world. For centuries, many tried in vain. Then Alexander turned up and sliced through it with a sword. There is no universal moral of this story. Sometimes such knots should be destroyed – wasting time tidying up what should be discarded is one of the most prevalent and pernicious human errors, from investment analytics to fancy home-storage solutions. Sometimes, however, knotty problems imprison valuable insights whose chance of freedom is lost forever when we favour unthinking rather than untying. Retweeting a conclusion hasn’t saved you the time taken to understand something, it’s wasted the time you could’ve understood it in. * The Dan Brown Problem – Many proponents of fortune-cookie ‘wisdom’ – that proclaim that an epigram that summarises an argument it takes a book to structure is more valuable than the book – make an argument for defining ‘value’ in crude terms of how well it meets the needs of a large group of people. The bigger the group, the bigger the value. It’s democratic and decentralised. To the best storyteller the spoils. There is manifestly something in this. Outside of manipulation, monetary value has always accumulated in the hands of those with the most popular appeal. One large part of popular appeal is instant simplicity. However, this often gets replaced with simplistic. The line here is subjective. The same person that would defend their online course as the ‘best’ because it was the most popular (perhaps because it wasn’t challenging), could vehemently disagree that Dan Brown wrote the ‘best’ books, or MacDonald’s served the ‘best’ food. We’ll see later in the book that teachers that obtain the highest in-the-moment ratings from their pupils have pupils that obtain the worst results over an actually meaningful timeframe. And when it comes to your financial decision-making, ‘instant’ is never the timeframe over which you want to be judging something. How do you know if you’re substituting an illusory understanding for a real one? Here are three quick tests: * The Reverse Engineering Test – Have you learnt the example or the principle? Anyone can parrot back a simple example of a complex principle. But parrots can’t work backwards. Can you build back the complex from the simple? Can you see the same problem from different angles? Can you provide an example of the same expression under different conditions? Or an example of how a change in conditions produces a contradictory expression? What are some implications of what your example is illustrating? * The Five-Year-Old Test – Can you explain this to a five-year-old? Often a slight wilful obscurity is used to mask the limits of our understanding. An infantile interrogation soon shows where this is the case. * The Richard Feynman Test – Want to know if you understand something beyond merely learning an example of it? The true test is not remembering an example, but arriving at one yourself after you’ve remembered the gist. Read the textbook, cover it up, and write your own version. ### Profound or trivial? As the amount of nonsense spouted about the distinction suggests, simplicity v complexity is a poor way of looking at anything. Terms that have become so loaded as to trigger reaction rather than reflection have ceased to be useful. So while it’s important to try to catch and resist such reactions in ourselves, we could do with a better way of spotting where we’re at threat of being blinded by the shiny lights of simplicity. That better way is to understand the difference between profundity and triviality.\[v] ![](/files/-MawiqJLzh2J0mJhbPwI) Trivial ideas or levels of understanding – as in A on the diagram (and fortune-cookie Tweets) – are well-supported, but leave you thinking ‘so what?’ They don’t lead anywhere interesting. Far-fetched ideas – as in B (and conspiracy theories) – can lead to very interesting places. If they were true, they’d explain a lot. But the maps they’re relying on to get there are pretty sketchy and have ‘here be dragons’ scribbled in the corner. The best understanding – as in C – sees depth both backwards and forwards. It is supported by evidence from multiple independent but converging sources and can be elegantly applied to multiple domains. Profundity doesn’t mean something is correct. It means that it’s a plausible stab at reality. It means that there’s less chance you’re being self-deceived. The more desperate we are for certainties, the more likely we will mistake triviality or far-fetchedness for wisdom, thereby strengthening the chains of our self-deceptions, rather than freeing ourselves from them. The added advantage of this approach over arguing about simplicity and complexity is that it places our knowledge more helpfully in a process that is both open to and encouraging of constant challenge and refinement, and that is inextricably linked to the perspectival and participatory nature of our real-life experience. When we get excited by a ‘simple’ explanation, often we’re merely momentarily happy that we don’t need to change anything. When we have an ‘Aha!’ moment, it is the ‘Aha!’ of ‘Aha! I knew that all along.’ Chalk up one more bit of the world you don’t need to worry about not understanding! One more bit that fits within existing frameworks. When we encounter profundity, we break our existing frames. At the highest level, for example after an intense bout of meditation, or psychedelic therapy, people report a fundamental change in their sense of self, and a connection to the world, unattached to one’s own ego that is so profound it’s ineffable – it’s incapable of being adequately described. We see this on a smaller scale when in the midst of mind wandering, we suddenly get a moment of insight. This is why profound experiences – such as the way psychedelic therapy doesn’t ‘treat’ an affliction, but transforms an unhelpful story you were telling yourself about yourself – are so much better at changing behaviours than instructions reliant on simple statements of fact, however well delivered, and in however well-controlled an environment. As we’ll see in Part One, the sort of behaviour change we want always leads back to the frameworks written in our brains about who we are. You need to break the old, unhelpful, deceptive ones, before you can build better ones to take their place. Money has a special role to play in this because it plays such a special role in how we see *everything* and how we decide to live in each moment. ### Wire yourself to want not simplicity, but complexity… when it’s worth it Returning to the more immediately practical implications of this for a second, being able to identify when and how you are in danger of succumbing to simplicity’s siren calls is fundamental to getting a better grip on your finances. Because we see money as scary and complicated, we’re prone to blindly grabbing at the first ‘solution’ that promises to make the fear and the complication go away. Unsurprisingly, the industry that profits from this is more than happy to help us. Acknowledging this is so important, because in finance the ‘simple’ you are sold is a deception. The goal is to use your money wisely. To grow not only itself, but yourself. This is not to say you shouldn’t get professional help… you quite possibly should, and we’ll dive into the detail of this in Part Three. But before you do, it’s vital to be able to catch your craving for certainty, so you avoid the existentially painful and monetarily pricey consequences of being blindly led by this craving. Is the help you are getting playing to and feeding your fears, or helping you face them? Is it growing the complications, and selling itself as a guardian against them, or is it helping to grow the understanding within you that can confidently deal with anything, however complex? After all, becoming comfortable with increasing levels of complexity is precisely what being human is about. As noted in the previous section, a baby doesn’t take its first steps, think it’s nailed it and put its feet up. It learns to run. Evolution is a process of complexifying (note: not complicating). And while we want to avoid complicating things, we don’t want to make everything simple. We want to make ourselves wiser, increasingly capable of mastering complex things. Our resources, however, are limited. We can’t master everything. Which is exactly why, as we’ll look into later, blindly chasing ‘more’ is so silly. Often a simple version of a complex thing, or a conclusion with a cursory understanding (so-called chaffeur knowledge\[2]) is all you need. But when it comes to how you interact with money, be it by its direct input into decisions, or just thinking about it, nothing so obviously or so frequently shapes and expresses who you are: it’s not the time to be taken for a ride. Regardless of the simplicity or complexity of a thing, we want to understand what’s worth understanding. What’s most relevant to and resonate with the goodness of our lives. We want to know what’s good for us. But we want to know it in a more complex and comprehensive way than we’re used to. We’ll look at the four ways of knowing in Part One and how we talk about the two that don’t really matter, and ignore the two that do. When we talk of ‘knowing’ about money or investments, it’s crucial to understand what we really mean. Simple and complicated can be reduced to propositions and procedures: statements of fact and technical know-how. Complex requires a knowing that is perspectival and participatory. That understands ideas in the context of the life they are symbiotically serving. Seeing the world this way is how we can master the participatory process of caring for what we care about. Seeing this more clearly is what Money Blind is about. What you do with money is irrelevant unless it’s making your life better. You can get rich and stay deceived, and those riches won’t mean shit. Think about money more clearly, and not only will you use money more meaningfully, but you’ll get richer as a side-effect. \* When someone claims a complex idea is being explained in a simple way, what they mean is a simple idea has been stripped of its traditional covering of unnecessary complication. Complex processes may end up with simple conclusions, but to jump to them is to trivialise them. And trivial is not transformative. It’s a self-deceiving trick to make you feel you’ve solved something despite knowing in your soul that you’ve done no such thing, and wasted time in pretending otherwise. Believing simplicity automatically equals sophisticated is dangerous. It deceives us into perceiving profundity when presented with triviality, and teaches people to ‘optimise for solving easy problems in ways that make it harder for them to think about the hard ones’.\[vi] A byzantine recipe could be because of Heston Blumenthal, but it’s usually because of some idiot inflating their own intelligence and importance. In financial advice, it allows con-men to create unnecessary complications and charge for removing them. ## The flawed model of straight-line success ***Life isn’t a race, it’s a dance*** The process of understanding our wants is often depicted as a never-ending journey down a yellow-brick road that reaches out into eternity. This is a misleading metaphor. Beyond a certain level of lived experience, while the journey is never-ending, it is less a *lurching towards* down an ever-more *assured* path, and more a *spiralling around* on an ever-more *refined* one. We are too prone to think in ladders (e.g. property ladders, career ladders). Yet any idiot can climb a ladder. Non-idiots check it’s against the right wall. Wiser folk still, right wall or not, wonder if perhaps climbing the same simple steps for all eternity is really the best metaphor for living in the first place. Our financial fears reflect a flawed model of ‘success’; one where ‘success’ is viewed as a straight line, and the most successful person is the one who’s shot along it the fastest. In this traditional view, money – seen as a universal store of value of which one can never have too much – is believed to be an antidote to these fears. Yet in a career-building, let alone life-cultivating, context this is crazy. Because fast and ‘flawless’ is flimsy. It’s a thin tower blowing in the wind rather than a solid pyramid. Building a firm foundation of short-term ‘failure’ along the way generates long-term resilience through increased confidence in the personal fit of the chosen direction, and lessons learned from taking the scenic route that the tunnel-vision of the dash along the straight line can’t teach. As philosopher martial-artist Bruce Lee wrote: ‘What is defeat? Nothing but education; nothing but the first step to something better.’ And: ‘Not failure, but low aim, is the crime. In great attempts it is glorious even to fail.’\[vii] This is echoed by legendary investor Charlie Munger: ‘There’s no way that you can live an adequate life without many mistakes. In fact, one trick in life is to get so you can handle mistakes. Failure to handle psychological denial is a common way for people to go broke.’\[viii] As with most valuable lessons, this applies far beyond business building and investing. As another example, from gymnastics coach Christopher Sommer, shows: ‘Dealing with the temporary frustration of not making progress is an integral part of the path towards excellence. In fact, it is essential.’\[ix] In trial and error, ‘error’ is just part of the process. As Nietzsche wrote: ‘The thinker sees his own actions as experiments and questions, as seeking explanations of something: to him success and failure are primarily answers.’\[x] This is echoed by table tennis player turned student of expert performance, Matthew Syed: ‘Progress is built, in effect, upon the foundations of necessary failure. That is the essential paradox of expert performance.’\[xi] Moreover, anybody who’s ever ‘arrived’ at the destination they believed would trigger the happy-ever-after dream has found out, sometimes at the sacrifice of the very opportunities they were really seeking, that fairytales aren’t quite the storytelling peak they’d been led to expect. \* Beware focusing on specific directional tactics, as opposed to principles of discovery. Even if a map works for who you are now, it may well not work for who you’ll be in a bit, and blindly following does nothing for training your compass-reading abilities. Racing to specific minor milestones is often wise, but treating life as race is not. This isn’t an argument to live at a certain *pace*. It’s just a reminder to pay attention to both where you’re going, and – more importantly – how you’re travelling. Flying too fast down a narrow path also runs the risk of attaching your position to your identity, and then you’re really screwed. This creates the environment where you start to fear falling from your perch more than you start to fear if being sat on that perch is the best use of your resources in any given moment. Importantly, this crushes the perpetual hunger for insight that makes the best lives flow and flourish. We become caught by our circumstances, rather than being taught by them. A fixation on ‘successes’ and ‘failures’ as if the accumulated tallies of ephemeral short-term outcomes of isolated activities were the measure of a life is a fixation not on living well, but on standing still. It’s also to overlook, as Bertrand Russell wrote, that: ‘Our doings are not so important as we naturally suppose; our successes and failures do not after all matter very much.’\[xii] ## **I can see clearly now** ***Philosophy is a commitment to see more clearly; money is a means of making philosophy practical (and offers inescapably honest feedback)*** I said at the beginning of this section that ‘just about every way we stray with money can be characterised by succumbing to a substandard substitute – trying to meet a real need with something that makes sense only with a distorted view of reality.’ If we are to stop it with the shoddy substitutes therefore, we need to see the world, and our interactions with it, more clearly. Seeing and thinking more clearly as a means to living better has been the aim of philosophy, Eastern and Western, for thousands of years. William James even defined philosophy as ‘nothing but an unusually obstinate effort to think clearly.’\[xiii] The trouble with philosophy for a lot of people is that despite its highly practical aims, there exists a chasm between abstract thought and its real-life expression. Some people’s minds are fluid enough to think themselves into better living with an obsessive openness to experience and a few rounds of reflecting on the helpfulness or otherwise of an action. Others… can’t. Money is the best bridge across the chasm. Western philosophy speaks of the importance of living an examined life. What better way to do this than with the unequivocal accounting record of your life choices that your credit-card statements provide? Eastern philosophy centres on a meditative process of overcoming self-deception. As we’ll see on just about every page of this book, nothing keeps the fires of our self-deceptions burning like money. The better we get at meditating upon our relationships with money, the better we are able to see through the smoke that stops us from using our money more wisely. Money is a wonderful thing. Not least because it amplifies our ability to analyse decisions in a domain-specific context. However, while it is often useful to break a life down for analysis, if the aim is the living, not the analysing, don’t forget to put it back together again. I’ve known people excitedly dive into the details of slightly dodgy but entirely legal tax-mitigation strategies for hours, only for them to abandon them in a second when asked if such action were a fair reflection of who they wanted to be. I’ve known people on the brink of trading in months of hard-earned opportunity, and stressful weeks of research for a purchase, only for it to be kiboshed when asked if it were likely to ‘work’, i.e. make their life sustainably better. We constantly grab at poor substitutes because they make the analysis simpler, yet more often than not we forget to zoom out to check that any analysis was even necessary. ‘Perhaps it is not without reason,’ wrote Montaigne, ‘that we attribute facility in belief and conviction to simplicity and ignorance.’ Belief, mused Montaigne, was ‘a sort of impression made on our mind, and that the softer and less resistant the mind, the easier it was to imprint something on it. The more a mind is empty and without counterpoise, the more easily it gives beneath the weight of the first persuasive argument.’\[xiv] There are, of course, good and bad ways of strengthening a mind – the good characterised by open-minded curiosity, and the bad by closed-minded bigotry. Philosophy – James’s ‘obstinate effort to think clearly’ – is the good kind. And with the training I hope to inspire in this book, is a great means of accessing it, and ultimately bringing what you care *for* and what you care *about* into greater alignment. {% content-ref url="/pages/-MBCzC3ZTywG9c04VaNo" %} [1: Towards Financial Enlightenment](/the-book/1) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] This is an oversimplification, of course. See Donald Hoffman’s *Visual Intelligence* for the full picture. \[2] Named after a possibly apocryphal story, in which the great physicist Max Planck one day got his chaffeur to deliver the lecture Max had given all over the world. Having heard it so often, his chaffeur could repeat it verbatim, but when it came to the Q\&A, he had to hand back to Max. \--- \[i] Will Durant, *The Story of Civilization vol. 9* \[ii] Friedrich Nietzsche, *Human All Too Human* \[iii] Explained in John Vervaeke, *Awakening from the Meaning Crisis, ep. 15* \[iv] Immanuel Kant, quoted in Will Durant, *The Story of Civilization, vol. 10* \[v] I am, once again, indebted to John Vervaeke for this section; see *Awakening from the Meaning Crisis, ep. 12* \[vi] Scott Alexander, Slate Star Codex blog \[vii] Bruce Lee, *Striking Thoughts* \[viii] Charlie Munger, quoted in David Clark, *The Tao of Charlie Munger: A Compilation of Quotes from Berkshire Hathaway’s Vice Chairman on Life, Business, and the Pursuit of Wealth* \[ix] Christopher Sommer, quoted in Tim Ferriss, *Tools of Titans* \[x] Friedrich Nietzsche, *The Gay Science* \[xi] Matthew Syed, *Bounce* \[xii] Bertrand Russell, *The Conquest of Happiness* \[xiii] William James, *The Principles of Psychology, vol. 1* \[xiv] Michel de Montaigne, *Essays* # 1: Towards Financial Enlightenment What you need to know about money – and how to know it > Become such as you are, having learnt what that is. > \ > – Pindar, *Pythian Odes* > I feel it is the duty of one who goes his own way to inform society of what he finds on his voyage of discovery. > \ > – Carl Jung, *Two Essays on Analytical Psychology* > Investing is not the study of finance. It’s the study of how people behave with money. > \ > – Morgan Housel, *The Psychology of Money* What this part is about **Making space for good ideas by ridding yourself of deceptive ones** – Self-deceit repels any advice that doesn’t double-down on the deception. And it’s incredibly hard to overcome. But it’s especially important to do so with money. Because money deceives us more, and has more wide-ranging (and expensive) consequences, than anything else. **Trusting your own truth so you don’t get waylaid by someone else’s** – Finance demands a philosophy. A way of understanding yourself, and how you live with money. Without one, you waste money, time, and energy chasing other people’s dreams, and flick from one siren-call of investment advice to the next, never sure if what you’re doing is right for you. **Cultivating wisdom and putting it to use** – Your financial philosophy is tied to your life, not a textbook. But what makes it robust is an understanding of knowing what you know, how you know it, and how to use it in insightful and practically wise ways. What this part isn’t about **Abstract theory** – Tempting as it is to jump to the investing checklist, and dismiss the cultivation of wisdom that actually makes it useful, doing so simply doesn’t work. Becoming wiser should not be dismissed as a theoretical add on. It is by definition a practical endeavour. **Tired clichés** – Thinking more mindfully about money does not mean spouting fortune-cookie claptrap about ‘abundance mindsets’ and spending your money on crystals rather than Cristal. **Pretending that the philosophy can wait** – Philosophy isn’t a nice to have, or something to sort out when the finances are sorted. Finances without a grounding philosophy cannot be sorted. # 1.1: Becoming Wiser with Money If living well is your ultimate goal, this book is a guide to how to best use your money to achieve it > Seek ye first the good things of the mind, and the rest will either be supplied or its loss will not be felt. > \ > – Francis Bacon, *De Augmentis Scientiarum* What this chapter is about **Brain surgery** – Behaviour change is brain change. Every action is a habitual action. Actions are the tools for changing our brain maps. See right actions not as a snapshot, but as a continual cultivation of a lifestyle choice. Right action today makes right action tomorrow easier. This is a meditative process of remembering who you are becoming, not a product to be ‘arrived’ at. **Your centre of narrative gravity** – Your relationship with money is between you, and your money. You need to understand both parts, and how they interact. The ‘you’ is your centre of narrative gravity – the story you tell yourself about yourself. Seeing ‘you’ as a story is key to writing and editing it into a better story. What this chapter isn’t about **Delegation or denunciation** – You do not improve your relationship with money by thinking you can avoid it, through either delegating the decisions that shape it to someone (or something) else, or by denouncing money as evil or irrelevant. This is a participatory process. You want reassurance from within, not the illusory reassurance of the blindfold. **Blindly rabbiting theory** – We cover a lot of theory, from neuroscience to philosophy to psychology to economics and marketing. But accumulation is not application. Too many read Socrates and never think Socratically – the opposite, in fact: believing that to have read something and preached about it is a substitute for internalising it. We are aiming at practical wisdom, not the vain gathering of philosophical soundbites. # 1.1.1: Becoming a better investor A better money mindset leads to better money behaviours leads to a better relationship with money leads to a better life This is a book about the philosophy and psychology of personal finance. Ultimately, it’s a book about behaviour change, or rather an ongoing participatory process of behaviour *changing*. If this book doesn’t change how you think about and act with money, it’s just another distraction; fuel for the false belief that being able to better describe and explain behaviour is the same as actually behaving better, in a sustained, transformative way. ‘Just as medicine confers no benefit if it does not drive away physical illness,’ said Epicurus, ‘so philosophy is useless if it does not drive away the suffering of the mind.’ Few things incite suffering of the mind more than money. No one thinks they have enough of the stuff, even those that have the most. No one knows what to do with the stuff they do have: what to spend it on; how much of it to save; when, where, and how to invest it… even those that spend, save, and invest with a confident, sometimes triumphant, air. Money makes us believe it is the solution to the very problems it has caused. It causes a nightmare of insecurity, and sells us a dream of synthetic security to offset it. It promises freedom for those willing to sell themselves to it as slaves. It magnifies our mind’s suffering, but tells us not to worry, because there is a heaven of instant healing just over the horizon. Maybe, I’ve heard, we don’t need to worry. Our dealings with money may be awkward, but we can dodge them with denunciation or delegation. Yet denunciation leads not to detachment, but to a surreptitious strengthening of attachment. And those to whom we would delegate are incentivised to change neither our beliefs nor our behaviours. Most financial advice isn’t about providing convincing answers; it’s about providing persuasive reassurance. *Why* we’re spending or investing, and *what* we’re spending or investing on or in isn’t nearly as important as doing enough to stop the nagging feeling we need to do *something*. We pay advisers not to think up a suitable solution, but to avoid having to think of one ourselves. However, this reassurance illusion doesn’t change unhelpful behaviours. It enables them. Buying a blindfold stops you seeing, not the things seen. We are moving, slowly, into a new world. A world that admits that investors are humans, and that all personal finance is behavioural finance. That seeks to help people become better investors, not to cajole them into becoming better buyers of investments. Describing systematically silly behaviours and ‘nudging’ people away from them does help people buy better investments. This is a good thing. But the point of nudges is that their prescriptions are followed without the follower noticing. Unhelpful tendencies are to be side-stepped, rather than explained, understood, engaged with, and consciously changed. This again is a good thing… in most circumstances. Not only because through the new actions, one may become a new person (rendering the old problems redundant), but also because most things aren’t worth the extra effort engaged choice demands. When it comes to increasing the efficiency of collecting taxes, or reducing the inefficiency of washing hotel towels, it is better to be blindly led along society’s preferred path. Your relationship with money is different. Because blindly following society’s preferred path is precisely most people’s main money problem. And save perhaps for a few dozen people living in anarcho-syndicalist collectives in hippie communes, whether you want to or not you engage with money every damn day, even when – especially when – you’re deliberately trying not to. Mental suppression is subconscious superglue. Our daily money engagements are central to determining who we are and the goodness or otherwise of our life. There is *nothing* more crucial to do consciously. Engaged, conscious choices come from the way we relate with the world. This is the job not of investment analytics, but of philosophy. A better life requires better behaviours, which requires better thinking, which requires better philosophy. {% content-ref url="/pages/-MBJEhIHo2iUouBg4Xbu" %} [1.1.2: Financial philosophy: what is it and why is it necessary?](/the-book/1/1.1/1.1.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} # 1.1.2: Financial philosophy: what is it and why is it necessary? ## **Your financial philosophy and your relationship with money** ***Your financial philosophy is your dynamic lived experience of your relationship with money, and how you go about improving it*** ‘But what is philosophy?’ asked Epictetus, ‘Doesn't it simply mean preparing ourselves for what may come?’\[i] Philosophy is not something to look at; it’s something to look through. It’s a way of seeing. It’s a way of studying yourself, the world, and the interplay between the two. It’s a set of lenses that brings clarity to the complexity and fuzziness of your vision. It is lived, not possessed. It is brain surgery. If it doesn’t literally change you, and better equip you to interact with the world, then it’s not working. It is a means both of grounding yourself to reality and opening up your eyes to the possibilities of the heavens. Great organisational clarity is the most fertile soil for creative, insightful, spontaneity. A sound financial philosophy better equips us to live with money. All investing is preparation, and because we’re investing – preparing – for living, the preparation of our money is inescapably intertwined with the preparation of our minds. The point of philosophy is not to inform, but to form. Philosophy is the study of human behaviour with the aim of improving it. Financial philosophy is the process of examining how we behave around money with the aim of improving it. Our relationship with money is how we interact with money: how we think about it, and consequently act with it, and around it. It is about the role money plays in our lives: how we connect money to who we are and what we value. This goes beyond psychology. Where financial psychology describes, explains, and occasionally prescribes means of controlling an environment to improve in-the-moment behaviours, and consequently financial outcomes (which can be extraordinarily valuable!), financial philosophy is about rewiring our brains to defeat self-deception by seeing more clearly, rather than playing behavioural whack-a-mole.\[1] Behavioural psychologists use a model of decision-making that divides our cognitive machinery into a fast, reactive, instinctive ‘system 1’ and a slower, more thoughtful, calculant ‘system 2’. Daniel Kahneman, who popularised the terms, gives as examples of system 1: reading words on a large billboard, driving a car on an empty road, and – if you’re a chess master – finding a strong move. They require little or no effort. You can’t mess them up even if you wanted to. System 2 by contrast requires attention, and without it, you’ll make mistakes. For example: focusing on a particular voice in a noisy room, checking the validity of a complex argument, and comparing two goods for overall value prior to purchase. Psychologically inspired environment-control prescriptions are great. When system 1, having spotted something shiny, is likely to get us into trouble by unthinkingly freewheeling after it, psychological ‘nudges’ either swerve us away from danger, control its damage, or switch on system 2 in time to save us. In investing, nudges can get us started and stop us from bailing out, making or saving millions in the process. Yet however well such nudges work, they all start too late. They save us from symptoms, but do little to cure the causes. While any right action makes it a little easier to take the right action again next time, real change comes only with conscious, attentional, action. I’ve seen time and again that while having an adviser acting as a private on-call ‘nudge coach’ can save investors from the monetarily costly consequences of idiotic investment ideas, it doesn’t stop the emotionally costly thoughts and feelings that inspire those ideas from arising. It can even enable them, as we’ll see later.\[2] There is a better way. When sailing through stormy investment seas that summon screams of ‘get me out of here!’ there is a world of difference between shutting your eyes, hearing ‘calm down’, asking ‘where to?’, and instinctively knowing that despite the storm there is nowhere you’d rather be. The last option is possible only with a conscious internalisation of a sound investment philosophy. Reactive behaviour changes work. Changes in the way you see the world that trigger the need for such reactions work better. Better insights are better than better incentives. To become wiser with money is to see more clearly such that your system 1 and system 2 responses become more closely aligned. You cannot ‘stop’ system 1’s instincts, but you can wire yourself to improve them. As Pierre Hadot wrote: philosophical knowledge is ‘not just plain knowing, but knowing-what-ought-to-be-preferred, and hence knowing how to live. \[…] Philosophical discourse must be understood from the perspective of the way of life of which it is both the expression and the means.’\[ii] Both behavioural-psychology and philosophy solutions to the problems of our screwy relationship with money aim at better outcomes. Psychology does so through triggering better behaviours, philosophy does so by making decisions more conscious. As John Vervaeke explains: > What consciousness seems to do is the following: it seems to be a way in which you can coordinate attention and other related abilities of awareness so as to optimise how insightfully you can make sense of your world. That’s why you need consciousness for complex problems that require insight, for situations that have a high degree of novelty or challenge in them. You can reduce consciousness when the problem has become very well defined for you.\[iii] Behavioural tricks are brilliant because they reduce the cognitive load of taking the right action at the right time. But we can train ourselves to reduce the conscious requirements in a more reliable, long-term, way. Not by dodging having to define problems, or pretending to understand them better, but by seeing more clearly both the problems and the range of solutions. Psychological solution tricks are less necessary when you defeat the problematic self-deceptive tricks that triggered their need. To live philosophically is to live more authentically. Because each interaction with money is both an expression of, and a stimulus to changing who we are, your relationship with money is a process to be lived and observed, not a snapshot to be ‘discovered’ and ‘preserved’. A relationship with anything involves one thing meeting another thing and together creating a new thing that stands outside of each original thing, while at the same time changing those original things by virtue of the relationship. A person meeting money creates an expression of who that person is. Money is sitting there all inanimate, then a person comes along and chooses how to allocate it. In that allocation of resources, that web of decisions, lies the determination of whether the life it is shaping is a good one or not. ## **Who or what is your ‘self’?** ***You are the product of your self-centred storytelling*** Our relationship with money is a means of matching the story we tell the world about who we are with the one we tell ourselves. Knowing who that ‘self’ is has entertained thoughtful types forever. The model we’ll use to guide us through this book\[3] is Daniel Dennett’s concept of the conscious self as an emergent ‘centre of narrative gravity’.\[iv] In discussing how spider’s make webs, snails shells, and bowerbirds bowers, Dennett describes how: > the strangest and most wonderful constructions in the whole animal world are the amazing, intricate constructions made by the primate, Homo sapiens. Each normal individual of this species makes a self. Out of its brain it spins a web of words and deeds, and, like the other creatures, it doesn’t have to know what it’s doing; it just does it. This web protects it, just like the snail’s shell, and provides it a livelihood, just like the spider’s web, and advances its prospects for sex, just like the bowerbird’s bower. This ‘web of discourses’\[4] emerges as unconsciously as a dam does from the interaction of a bunch of beavers with their environment. Our wiring, our environment, and our interaction with them – our effects on them, and their effects on us – creates what we call a ‘self’. And just as, in Dennett’s words, ‘an illustrated encyclopedia of zoology should no more picture Homo sapiens naked than it should picture Ursus arctus — the black bear — wearing a clown suit and riding a bicycle’\[v], nor should we rob this picture of some money. Whether we like it or not, the money in its pocket has become as much a ‘biological construction’ of the human as the clothes on its body. If we’re going to be pictured with clothes, we’re going to need resources to trade with a tailor. The discourse-laden web we weave may be who we are, but in two crucial ways we are not always its authors. The web is for protection, and progress. Having the protective functions happen automatically is a good idea. We don’t want conscious control over this stuff. ‘Our tales are spun,’ wrote Dennett, ‘but for the most part we don’t spin them; they spin us. Our human consciousness, and our narrative selfhood, is their product, not their source.’ The brain is a prediction machine. It preserves its existence by guessing how to navigate its environment, by using inputs from a body (including emotions\[5]), and a mind (with a cool ability to talk to itself and tell itself stories) and the environment itself.\[6] The progressive functions of our storytelling are a bit different. If we don’t consciously control the authorship, unconscious influences take the reins by default, and letting this happen is not such a good idea. Our ability to overcome unhelpful influences and take control of our centre of narrative gravity is at the root of all that is good – or not so good – about our lives. When Dennett writes that ‘Of all the things in the environment an active body must make mental models of, none is more crucial than the model the agent has of itself’ it is as correct in its application to allowing us to stay alive as it is to allowing us to really live.\[7] The success of a personal philosophy relies in part on its dance between efficiency and resiliency. Efficiency means we can move fast, but we’re blind to the bigger picture, and adapt poorly to new situations.\[8] Resiliency makes us slower, but we’re better able to respond to novel stimuli because we see a more complete picture and have better connections to potential solutions from other areas we can make use of. When it comes to money, we optimise for efficiency, which is why we’re so prone to panic when things go wrong. The same narrow lens that helps us make sense of a series of next actions also stops us from checking in on how those actions fit into something more transcendentally meaningful. The better we can flick between efficiency and resiliency, the more adaptive we become. Sometimes what is relevant is what’s changing, sometimes it’s what’s staying the same. There are more possible games of chess than there are atoms in the universe; master chess players (human or machine) cannot analyse them all. They need a filter for relevance. They need a philosophy. ## **Retirement is a terrible goal** ***Mental preparation is more important than financial preparation*** Nowhere is the importance of our self-storytelling cast into starker relief than with the most universal financial-planning ‘goal’: retirement. Retirement in its traditional sense is a stupid goal. And not only because up until a mere few generations ago, life expectancy and retirement age were give or take the same thing, or because retirement often sucks meaning out of life, rather than pumps it in.\[9] Retirement is a terrible goal because it makes no sense to spend years in the service of a single overarching goal, while not enjoying the journey, and then, upon arrival at the destination, realising not only that neither of the two biggest determinants of your everyday happiness – your body and your relationships – are what they could have been, but the future doesn’t feel like it was supposed to either. Robbed of the relevance a career provided, many – men especially – become less happy and less fulfilled, even suicidal. Lifelong striving ending in suicide? What sort of goal is that? A completely shitty one, of course. It may be a cliché, but spending your life finding work you enjoy is far wiser than spending it doing something you don’t for the chance to stop at some point before you die. A person with a mind sufficiently well prepared to know what it both wants out of life, and can best contribute towards life, is in a healthier position, with or without needing to continue to earn an income, than one who has made a mattress out of money to land on when a period of their life comes crashing to a halt. Unlike mental preparation, which proves its worth along the way, financial preparation needs a finish line. Saving for tomorrow is sensible; forgetting that tomorrow technically never comes is not. As John Maynard Keynes remarked, noting the propensity to grow the ‘cake’ of safety-net savings:\[10] > And so the cake increased; but to what end was not clearly contemplated. Individuals would be exhorted not so much to abstain as to defer, and to cultivate the pleasures of security and anticipation. Saving was for old age or for your children; but this was only in theory – the virtue of the cake was that it was never to be consumed, neither by you nor by your children after you.\[vi] Philosophy is about how to live a Good Life.\[11] To live it, not to dream about it. Living only ever happens in the here and now. Living that happens in the future is only a dream, inspired by nightmare thoughts of ‘just in case’ or ‘better safe than sorry’. Much of financial planning is about seeking security. Yet poorly done it is more often the security of a stagnant pond, not a beautiful waterfall. ‘Nature is stable, and money is not’\[vii], wrote Euripides. Money worries come from viewing money in a non-natural way, focusing not on the stability of one’s ability to be rewarded with it for the value one provides to the world, but on what would happen if one lost what they had – which leads, inevitably, to believing that one can never have enough. {% content-ref url="/pages/-MBJEmkkKT4U0PYPo89y" %} [1.1.3: The two types of financial errors](/the-book/1/1.1/1.1.3) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] The same point applied specifically to the benefit of an investment philosophy over and above an investment strategy will be the theme of [Part 4](/the-book/4). \[2] [Part 1, Section 2.3](/the-book/1/1.2/1.2.3#when-is-delegation-dangerous): When is delegation dangerous? \[3] Whether Dennett’s model is ‘true’ is irrelevant here. What’s important is if it is a useful model for helping us determine when our actions turn our resources into a Good Life, and when they don't. \[4] To borrow a phrase that Dennett borrowed from Robyn Penrose. \[5] Emotions literally move us. Even the etymology – *emovere* – is shared. Emotions are the way the body has its say in moving the mind towards a thought. In the words of Matthieu Ricard, in *Happiness*: ‘Emotion is that which conditions the mind and prompts it to adopt a particular perspective, a certain way of seeing things.’ The common distinction between ‘emotional’ and ‘rational’ is unhelpful. Emotions are inputs into rationality and the process of becoming wiser, but neither self-avowed ‘thinkers’ nor ‘feelers’ prefer to focus on whatever they’ve identified with rather than the wisdom they really want. \[6] It’s important to remember, in the context of believing there to be an objective reality of any sort (including, say, that money is objectively useful) that we don't observe reality, we construct it. As Anil Seth explains in his TED talk: [Your brain hallucinates your conscious reality](https://www.ted.com/talks/anil_seth_your_brain_hallucinates_your_conscious_reality), ‘Instead of perception depending largely on signals coming into the brain from the outside world, it depends as much, if not more, on perceptual predictions flowing in the opposite direction. We don't just passively perceive the world, we actively generate it. The world we experience comes as much, if not more, from the inside out as from the outside in.’ Both we and the world *are* our stories. ‘Your experience of being a self,’ Seth continues, is ‘a controlled hallucination generated by the brain.’ We have far more control over – and responsibility for – our ‘reality’ than most people realise. \[7] We’ll return to this in the context of the [relative importance of our income and our expenditure](/the-book/2/2.2/2.2.1), after we’ve studied the study of how to really live. \[8] As the state of PPE procurement during the coronavirus pandemic testifies to all-too-chillingly. \[9] From God to Brexit, humanity is very good at taking things away without working out what to replace the good bits with. \[10] Please do not mistake this as exhorting the equally stupid opposite: to spend, spend, spend. It is the lack of consciousness of the consequences of the allocation of monetary resources that is the issue, not the quantum of expenditure. \[11] Capitalised to distinguish what we’ll come to define in [Section 3.4](/the-book/1/1.3/1.3.4) from something more mundane. \--- \[i] Epictetus, *Discourses* \[ii] Pierre Hadot, *What is Ancient Philosophy?* \[iii] John Vervaeke, *Awakening from the Meaning Crisis, ep. 10* \[iv] Daniel Dennett, *Consciousness Explained* \[v] Daniel Dennett, *Consciousness Explained* \[vi] John Maynard Keynes, *Economic Consequences of the Peace* \[vii] Euripides, *Electra* # 1.1.3: The two types of financial errors Wise money decisions start with avoiding mistakes in problem formulation and problem solving Good philosophies focus on flourishing and flow, rather than fixing on a target and forgetting about the life behind it. Philosophy is about the process, not the goal. Specifically, the process of thinking things through in an undistracted and undistorted way. Of learning to love self-insights enough to overcome the resistance to the effort required to uncover them. Of making better decisions by getting more comfortable filtering and processing inputs from internal (body, mind, memory, emotions) and external sources to produce the sort of suitably reasoned outputs that enhance a life in an honest, whole, long-term sense. The best filter is a smart human brain, and the best human brain is a smart filter. If improving filtering (how effectively you choose what to bother thinking about at all) and processing speed (how efficiently you think about what’s left over) are the two ways to improve decision making, misunderstandings and fallacies are the two ways it goes awry. Misunderstandings are about problem formulation: a mistake in coming up with the question – asking a bad one, or asking the right one in a bad way. For example, asking what is the best investment? (for there is no such thing, as we’ll see later\[1]). Fallacies are about solution reasoning: a mistake in getting to the answer – using flawed logic, or an inefficient method. For example, using the price of something to the world to determine its value to you. To combat misunderstandings, we need to cultivate what Jonathan Baron calls ‘active open-mindedness’. This involves both an ability to quickly integrate new information into your beliefs, and a willingness to change your beliefs when that new information suggests you should. If you think changing your mind is a sign of weakness, or don’t instinctively look for reasons your beliefs may not be true, then you’re not being actively open-minded. To combat fallacies, we need to cultivate wisdom. This does not mean we need to be wise. Fortunately for our purposes, if you approach money problems with an actively open mind, the wise choices will often look after themselves. Beliefs passively absorbed rather than actively acquired are the root of how we end up with a poor relationship with money. Part Two of this book sets out to challenge those beliefs: to make you stop and think about if your current way is the only way, and if it’s the best way. If it is, that’s excellent news. You don’t need to change anything, and your old actions will have a new confidence. If it’s not, that’s also excellent news, for acknowledging this is the first step to finding a better way. This needn’t be any harder than simply not stopping at the first shop that sells something that looks like it’s what you went out to buy. It’s swapping accumulating a landfill of facts for finding and solving a single problem at a time. However, relevance does not always reveal itself; now we're unburdened by the cold, hard, realities of life outside of the self-service savannah, choosing what to focus on can be blinding. We want to cultivate a philosophical process, set within an economics framework. This is cultivation in the horticultural sense: gardeners do not buy plants and take no further care of them; they nourish them, encouraging adaptability to inevitably changing and uncontrollable circumstances. In our context, philosophy is economics for the soul. Economics is the study of how best to allocate scarce resources. Philosophy is concerned with how to live a Good Life. And how to live a Good Life is the ultimate resource-allocation problem.\[2] {% content-ref url="/pages/-MBJEpy5ZxREhu808dz5" %} [1.1.4: What unites every money decision?](/the-book/1/1.1/1.1.4) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Part 3, Section 4.4. \[2] Furthermore, while as a subject economics is notoriously mostly nonsense, that misses the point that those trained to think like economists (like philosophers) think more clearly and creatively than most (see examples in David Epstein’s *Range*). While we want to avoid the numbers-based forecasting part of the economics world, we want to embrace an approach to our individual lives that understands both the big picture and the minor details, knows the place of both, and dances between them, to creative and insightful ends. # 1.1.4: What unites every money decision? Everything in this book ties to one central idea: we each have resources we’re trying to allocate in a way that turns them into our best possible life Viewing life at a high level, we’re all doing the same thing. We each have a bunch of resources – which we’ll simplify into money, time, and energy\[1] – and we’re all trying to turn them into a ‘Good Life’ (whatever that may mean to each of us). This game is played out in innumerable different economic, political, social, and psychological circumstances, but as Will Durant noted, if history teaches us anything, it’s that ‘everything changes, except woman and man’.\[i] A bunch of women and men trying to corral whatever circumstances they find themselves in so as to live as well as possible. `DIAGRAMS TO COME` `Resources –> Good Life` `Human + non-human separate –> Human + resources combined` It seems reasonable to think that there should be correlation between more on the left and more on the right. And there should be. But because of what happens in the middle – because of how we relate to the resources, how we combine them with ourselves – there usually isn’t. And in some cases, the correlation is negative. Historically, the role of money in this equation hasn’t changed. It sits firmly on the left-hand side. It can be turned into a Good Life, but it is not a part of the Good Life itself. You do not get or have a life, you participate in it. On its own, as a determinant of your Good Life, money is as useful in another person’s private bank vault as it is in your hands. Yet as much as people may talk about how money does not equal happiness, they think, speak, and act otherwise. {% content-ref url="/pages/-MBCzEc-t\_z3JSPmWRis" %} [1.2: The Root of All Deception](/the-book/1/1.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] We could include other resources (e.g. one’s network, intelligence, etc. but these tend to be inexhaustible, so their allocation is less of an issue). When we talk about time and money, we’re not doing so in the fatuous fortune-cooking profundity ‘time is money’ sense that infects the discourse of the pathologically ‘driven’ to justify both their jobs and how much they spend on cleaners, coaches, and cooks. This sort of attachment of time to money obscures the value of time that they thought they were revealing. These are also the last people to realise that not all time is created equal and the first to have severe energy-management issues. \--- \[i] Will Durant, *The Story of Civilization, vol. 1* # 1.2: The Root of All Deception No other life lessons have such immediate and compounding value as those that can be learned about living with money > One repays a teacher badly if one remains only a pupil.\ > – Friedrich Nietzsche, *Thus Spoke Zarathustra* ## What this chapter is about **Recognising that nothing is more important to get right** – Initially, finances can seem daunting. But the important parts needn’t be. And besides, there’s no escaping money’s input into all our decisions, so it pays to learn how to become more comfortable making them and to make them more wisely. **Psychological growing-up** – Becoming wiser with money doesn’t mean delegating the decisions (which is impossible to do effectively). It means upgrading our cognitive machinery so we can see more clearly. ## What this chapter isn’t about **Pretending that the mental side is a nice-to-have, not a must-have** – Believing your relationship with money doesn’t matter as much as getting your numbers-based ducks in a row is a palliative pretence. You can have your finances ‘sorted’ and still interact with money in an incessantly unhelpful way. **Selling a solution** – Thinking the solution is for sale is how we shut down attempts to become wiser before we even begin. This includes magic-bean products and the illusionists that sell them. You cannot buy the answer, so don’t waste your money stuck in the loop of believing you can. # 1.2.1: Where does the path to good investing begin? ## **How do you get unstuck from financial confusion?** ***To start your investment journey, get unstuck with a self-propelled change of motion*** At the height of his fame, artist Damien Hirst was making millions. Lots of millions. $200 million in two days, for example. He had no idea what to do with it. Like Sherman McCoy in Tom Wolfe’s *The Bonfire of the Vanities*, he didn’t know where it was going, but he knew it was going somewhere; ‘you can very quickly spend any amount of money’, Damien told *Idler* magazine.\[i] People chase money to feel more in control. Yet the opposite often happens: ‘When you don’t have control, you can’t see the beast. You have a sense something’s wrong but you can’t see the mess,’ Damien continued. It’s an archetypal example of money, whatever its amount, and however fast its flowing, leaving people feeling stuck. My personal business model as a self-styled financial psychologist was a controversial one: I wanted to make myself redundant. This was unsurprisingly unpopular with my boss. It was more surprisingly unpopular with my clients. The way I saw it, I didn’t pay myself for financial advice, so if I could get clients to where I was, they wouldn’t need to either. It can’t be good financial advice to recommend spending money on something unnecessary.\[1] This was not about knowing what I knew, but living with money the way I lived. People seek financial advice for the same reason they seek any advice: because they feel stuck. Someone can want to change, can imagine what being changed would look and feel like, can attempt all sorts of ways to change, but never actually change. The way clients saw it, however, was that they were paying not to get unstuck, but to ‘allow’ them to be unaware of being stuck. This has the advantage of being easy, but the disadvantage of not working. It looks like it works, because it works better than nothing, but it doesn’t work on the meaningful sort of level that leaves someone feeling like they can comfortably fire the adviser. It doesn’t work because to feel stuck is to experience an existential inertia, and external treatments can only salve, not solve existential issues. Etymologically, to suffer from inertia is to be ‘unskilled’, ‘inactive’. Unable to go anywhere under one’s own steam. To basically be dead. Even if you’re drifting *somewhere*, you’re essentially going *nowhere*. The inert body is both not changing and resistant to changing because it is resistant to self-propelled changes of motion. Having no money doesn't bug people in the same way as having no idea how to think about money, or to know what to do with it when they do have it. Just as it’s now easier to find food but harder to find nutritious food, money’s easy to spend, but difficult to spend well. We’ve become better at living expensive lives and worse at living good ones.\[2] Everybody has the ability to live a Good Life, and money is no excuse for why we don't.\[3] Personally and professionally, I’ve been inside the heads of the people that other people think they want to be (or rather that have what other people think they want to have). Business folk, film folk, sport folk, idle posh folk… from the boardroom to the pages of Tatler, I’ve examined a circus of rich people’s relationships with money, even if they couldn’t be bothered to do it themselves. There is no correlation between having money and living well. However, when it comes not to what people *have*, but how they *are* with what they have, there is a correlation. I’ve seen what works, and what doesn’t. The ways that work are the same, and the ways that don’t are too. It is simple, and systematic. Focusing on embracing what works and shunning what doesn’t should be everyone’s aim. Yet if anything, because of the way we’re wired, because of the way society is set-up, and sometimes because of the way the people we pay to help us are incentivised, everything gets flipped: we embrace what doesn’t work, and shun what does.\[4] This needs to change. For the stakes – your life savings, if not your life – couldn’t be higher. And the application – you’re thinking about money right now, and you’ll be spending some soon – could be neither more incessant nor more immediate. A poor relationship with money leads to poor money decisions leads to wasting money. And time. And energy. It leads to wasting your life. It leads to expressing yourself in ways that don’t feel right, but that you can justify in the short-term, conveniently overlooking the ability of the short-term to turn into the long-term when you’re not looking. When the stakes are high and you’re busy looking elsewhere, it can be tempting to hire some help. Unfortunately, the obvious place to turn often doesn’t help at all. ## **How much are you unwittingly and unknowingly wasting?** ***Of all the things you can make the effort to learn, nothing in your life is nearly as valuable as learning how to improve your relationship with money*** Nothing dodges danger like delegation (or at least nothing dodges having to deal with danger right now like delegation). If you can successfully do this… if you can pay someone to do your worrying for you, to make your earning and spending decisions for you, to guide each of your trade-offs, to reliably allocate your resources in life-enhancing fashion, to think about money for you, and deal with all the physical and mental consequences of doing so, while you enjoy effortlessly fulfilling your potential… then congratulations: this book isn’t for you. Perhaps that sounds a bit overblown. You just want someone to deal with your investments – to tell you what to own and how to own them, and to handle the associated paperwork (and maybe lend you a few clever-sounding things to say about ‘the markets’ should you be unfortunate enough to end up in company impressed by that sort of thing). You’ll deal with what those investments are *for* on your own time. This is a service many offer, and many are willing to pay for. But is it a price worth paying? It’s worth checking. Investment is a journey. *Your* journey. There's no excuse for being taken for a ride. In the gap between the perception and the reality of financial advice lurk two main dangers: paying unnecessarily high (and largely hidden) fees, and receiving illusory reassurance rather than the real deal. What would you say if I offered to cover 20% of your entire expenditure, each and every year? What about 50%? 100%? What if I went further, and *paid you* the same again for the opportunity? No strings attached. You’d take it wouldn’t you? What would you say if I described to you a most assiduous budgeter, the type that tracked and categorised every purchase, was able to tell you to the penny how much they’d spent on coffee or car insurance or children over any time period… and yet had, neither through foolishness nor fear, missed off their single largest expenditure? An expenditure so large, it was higher than all the other stuff added together. And also grew at twice the rate of everything else, including this budgeter’s wages. Chances are you’d question my assertion that this person wasn’t a fool. What they, and many other less-assiduous non-fools fail to account for is that the money paid to manage other money is too cool to let itself be seen in budget clubs. Investment-management fees are magic. Not even those that charge them know how much they really are.\[5] The investment-management industry is a master illusionist, but an emergent one. Its is a collective, unconscious, deception; its secrets aren’t known by any one participant: all the better to sustain the system that keeps them secret. We’ll look at this in more detail later.\[6] In the meantime, rest assured this isn’t just another warning about high charges.\[7] What you need to know now is how easy it is to be misled into thinking that fees don’t matter because it’s all so complicated and scary, it has to be worth it, or because there’s no alternative, or because they’re actually not that large, or because they’re magically paid for by someone or something else, that they don’t form part of *your* expenditure. Because that is all bollocks. These mistakes can mislead millionaires into easily – but unknowingly – spending more on investment fees than everything else combined. And completely unnecessarily because the returns never justify them (unless I suppose you put a particularly high value on being able to talk about your brand-name-bank ‘investment guy’ and have curly writing on your cheque book).\[8] Millionaires are merely a magnifying glass: this applies to everyone. If something looks outrageous at the extreme, chances are it’s just as bad an idea when it flies under the radar too. The second danger is more worthy of focus. For when we seek help with ‘sorting out the finances’, and when we dig a little deeper and understand we’re seeking something about ‘security’ or ‘freedom’ or ‘reassurance’ or even appeasing a fear of missing out, we’re really seeking a better relationship with money. Which is rather more involved than simply stopping chucking money at cowboys. But it’s infinitely more rewarding. This is why I’ve written this book. Because the lessons learnt from seeing the world through a diverse set of moneyed lenses apply to everyone. They are always important, but without money’s magnifying glass, they aren’t always obvious. This is thrillingly counterintuitive, because the most important lesson is that it’s not about the money. {% content-ref url="/pages/-MBSsg7KJVFexrzyja5y" %} [1.2.2: Why focus on money?](/the-book/1/1.2/1.2.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Though as we’ll see this is the foundation of the traditional advisory model, both in terms of paying for the advice itself, and what the advice encourages people to buy. \[2] See Trigger #1. \[3] Above a certain threshold, which is way lower than anyone thinks it is. If you’re reading this book, you’re probably above it. More on this in [Part 2, Section 1.1](/the-book/2/2.1/2.1.1). \[4] This triple whammy of errors – how we’re wired, how society is set-up and how advisers are incentivised – runs through every chapter of this book. \[5] Few people believe me when I tell them this, but it is staggeringly common. Not only are the fee structures of the traditional investment management firms opaque to the point of an artform, but the people who receive those fees have no more need to understand them than you need to know how your car engine works to be able to drive. \[6] In [Part 4](/the-book/4). \[7] A subject plenty have covered well enough already, and for which one needn’t search too hard for horror stories, for example, the JP Morgan broker caught because he churned a bit too much () or St James’s Place, or every offshore ‘adviser’ in the world. \[8] One crude mathematical example: It’s easy to spend 2.5%-3% unnecessarily. So if you spend £36,000 p.a. on other things, and you’ve got more than £1.2-1.44m invested, you spend more on pointless investment management. It’s not about a single year, though; the cumulative effect is frightening. And it quickly gets much worse – I’ve known people to pay over hundreds of thousands a year into the pockets of people who reliably make less money than the easiest DIY alternative. \--- \[i] Damien Hirst, interview with *Idler,* [issue 71, Mar/Apr 2020](https://www.idler.co.uk/article/interview-damien-hirst/) # 1.2.2: Why focus on money? Our minds and our environments are obsessed with money, and it enters into every decision; it’s therefore the most reliable means of changing our worlds On the one hand, a book about the Good Life should concentrate on the stuff that universally contributes to such a thing. It would be a book about physical, mental, and spiritual health. About breathing, moving, eating, and sleeping. On the other hand, there are plenty of them already and relatively speaking no one listens to them. But there is something people do listen to. Give anyone the choice between learning how to breathe, move, eat or sleep better and a promise (however dodgy) of being able to buy better breathing, moving, eating or sleeping and the wallet will get busier than the brain. Give anyone the chance to change one thing to improve their life, and most will plump for more money over perfect sleep, even if the money they already had wasn’t really working for them and the days following a perfect sleep were reliably the best of their lives. More is always better, they think, and money’s the ultimate convertible cure. In our resources-into-good-life equation, money is the least important of the three main exhaustible resources of money, time, and energy. The stuff that makes life worth living always gets done in time, it doesn’t always get done just because there’s money around. And not all time is created equal. Two hours of high-energy time will always out-rank ten hours of being hungover or heartbroken. So why focus on the least important? Because it’s easiest. We think about money all the time, intentionally or otherwise. We’re too busy to pay attention to time and either too tired or too wired to pay attention to energy. Going from zero to one is always the hardest step to take. Remember too that this is fundamentally a book about changing behaviour by inspiring thinking changes that lead to action changes. It’s harder to change actions with time and energy prescriptions, because time and energy are so much more capricious. Our relationship with money is like meditation: it happens immediately, feedback is instant, and every second is a chance to choose which way you’d like your brain to behave. You live in a never-ending trading floor of feelings, with money choices the inescapable public record of choices for one way of living over another. When we talk here of money, it is not in isolation; it is our relationship with it – our money mindset – that’s vital to our vita. This comes with a caveat, of course: money is important up to a threshold. But that threshold is lower than you think it is. If you’re not so short of the stuff that it dictates every single decision, if you’re not either already in or one missed payday from poverty, then you’re either above or within touching distance of this threshold. When I talk about money not solving money problems, I am talking about problems above this threshold. {% content-ref url="/pages/-MBSsaltp6Vknm-oWLdK" %} [1.2.3: What other investment books miss](/the-book/1/1.2/1.2.3) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} # 1.2.3: What other investment books miss ## **To jump higher, first bend lower** ***It’s possible to follow the best investment advice and for money to still have a net negative effect on your thoughts and your life*** It’s not difficult to find adequately sane investment advice in books or blogs. The sane ones may be in the minority, but it’s a growing minority. However, knowing how to spend, save, and invest does not automatically translate into doing so in a way that improves the quality of your life. Wisdom can elude even the educated and erudite. When the very mention of money causes arms to flail about in a frenzied bid to cast aside unwelcome thoughts like flies around shitty mental machinery, telling the owner of those arms what to do with their money does not make them do it, however clearly the steps are spelled out. It’s like telling someone on a diet to stop eating sugar. The knowledge that their body doesn’t respond at all well to sugar may work for a bit, but if they never change their belief that their sweet tooth is as much part of them as the ones made of rapidly deteriorating enamel, then the march to diabetes won’t be denied.\[1] For example, take the traditional first step in financial planning: an emergency fund. Telling someone to build a cash fund of 3-9 months’ worth of expenditure\[2] is not going to make them do so when the reason they haven’t already is because they’re addicted to doing the opposite of saving. Would you bother telling a crack addict to stop spending money on crack and put it in a piggy bank? Other addictions may be more socially acceptable, but that can make them harder, not easier, to overcome. Next to nobody thinks they have a major problem with money. Even if the emergency fund did get built, it’s no guarantee it will stop its owner panicking when it’s time to use it. It may lessen the panic, but it doesn’t let it go. `DIAGRAM TO COME` `from brain change to money change` This is where most investment advice goes wrong: it’s written for people whose brains are already in the right place to receive it. Most people’s brains are in no such place.\[3] You can’t fire a cannon from a canoe. Most investment advice rightly knows it has to combat the perceived complexity of finance, but focuses on painting prettier pictures of clarity and simplicity, forgetting that the audience still needs to go to the gallery, still needs to remove their hands from their eyes, and still needs to learn how to see what they’re looking at. If jumping to the tactics – if stocking your cupboards with chia seeds and quinoa and signing up at a gym – were all it took to rewire a brain that’s been slovenly about everything bar stuffing its face for years, we’d all, in the immortal words of Derek Sivers, be ‘billionaires with perfect abs’.\[i] You can manage your money ‘perfectly’ and still live poorly. But if you think about money well, you’ll use it well, you’ll live well, and a lot of the managing will look after itself. This is still an investment book, and indeed all the relevant investment stuff is summarised on a single page later on. If you’re into living in a castle in the sky in the Kingdom of the Blind, skip straight there.\[4] If you prefer firmer foundations, and figure that the one-eyed man is only in charge when everyone else has their eyes closed, stay on course. Learning isn't about getting to the truth, it's about helping grasp the relevant implications. ## **When is delegation dangerous?** ***There’s a time and a place for delegation; delegate the numbers, but keep the meaning of them under your control*** There’s a reason the words ‘peace of mind’ appear on every financial adviser’s website. It’s not to distinguish them from all the firms aiming to give you a mental breakdown. It’s because when your mouth says you’re seeking advice, your mind says you’re seeking peace. Yet peace in the abstract is a tricky concept. Without a boundary of time, it’s pretty useless. Concussion brings a type of temporary peace. Peace can be found in the early days of a Ponzi scheme. Every old-school sales manual teaches the value of creating a ‘disturbance’ just so you can take it away again in the name of ‘creating’ peace. Panic-selling grants investors a short-term peace, while reliably robbing them of the means of a longer-term version, in the vein of Tacitus’s quip that ‘they make a desert and call it peace’\[ii]. So desperate are we to find it, that we attach the label ‘peace’ to anything offering a hint of temporary external calm. We substitute peace of blind for peace of mind; yet the peace we seek can come only from within. Inner peace is secure, external peace, even when ‘achieved’, is fragile. In the words of Seneca: > Peace itself will supply you with new fears. If your mind has once experienced the shocks of fright you'll no longer have any confidence even in things which are perfectly safe; once it has acquired the habit of unthinking panic, it is incapable even of attending to its own self-preservation. For it runs away from dangers instead of taking steps to avert them, and we're far more exposed to them once our backs are turned.\[iii] That was written when people walked around with swords, but it’s just as true now, when the dangers we face come from the cutting edges of accountancy. Millionaires, it turns out, are people too. And people will always find a reason to worry. In any era, the most debilitating dangers are inventions of our imaginations. Even if we have a hunch that money messes us up, we turn away from interrogating how, fearful of what may be revealed, while clinging to the hope that if we can just corral enough cash together, ‘peace’ will find us. Those we turn to are happy to encourage this, to persuade us worries are better delegated than dissolved. In some times and places – where the worry is attached to a time-bound event where a precise expertise is called for – this is wise. Angry people on Twitter never know better than international scientific institutions. In one study\[iv] looking at financial decision-making, it was shown that when given the advice of an expert, people turn off the bit of their brain that thinks for themselves. In the words of the paper’s first author: ‘there occurred an offloading of the decision-making process in the presence of expert advice.’\[v] ‘The problem with this tendency,’ noted the research team’s leader, ‘is that it can work to a person's detriment if the trusted source turns out to be incompetent or corrupt.’ Which makes this a huge problem in financial advice, because, as per the title of Part 4, Chapter 2, ‘(Almost) all financial advisers are crooks or idiots’.\[5] This problem would be lessened if financial advice were time-bound and centred on expert application of technical skills. A bit of it is. But most of it is not. This Part of the book is about explaining that how your money affects the goodness of your life is an ever-evolving relationship you participate in, not a series of decisions to be made by a mythical robotic version of you that is capable of stepping away from emotional involvement every time it picks up a calculator.\[6] The hallmark of rationality is to focus on the process, not the product. Rationality isn’t logic. It isn’t not feeling. As above, emotions are an input into the prediction machinery of your brain. ‘Being rational means knowing when, where, and to what extent to be logical’\[vi]. In terms of turning your resources into your Good Life, this is a process of defining your identity in relation to and in interaction with, your environment. You’re doing this all the time, mostly unconsciously. Because money decisions have such a powerful effect on this co-identification process, we need to pay great attention to this process: we need to turn our brains up, not off, lest we be sucked into an abyss of self-deception and self-destruction. When someone’s spent their life selling hammers, it’s hard to stop seeing the nails just because they’re not there. As we’ll see later, investment advice still operates from a profoundly product-selling position. Even when the UK banned commission, it changed only the label applied to a fee based on the amount invested in a product (from commission to ‘adviser charge’); it did not change the mindset of the salesman, or by extension the nature of the industry that mindset had created. \* We forget how emotional money is, so we don't change. As French philosopher-monk Matthieu Ricard explains, ‘When we emerge from that moment of blindness during which we are completely in the grip of a strong emotion, and our mind has been freed from its disruptive emotional burden, it is hard to believe that an emotion had dominated us to such an extent.’\[vii] While most advice is happy to pretend that feelings are so fleeting as to be ignorable, some more modern advice does at least nod towards the non-number stuff. However, even then, it’s burdened by the blinkered grammar of the past from which it is only slowly evolving. One of the pioneers of the move in the right direction set out ‘the five aspects of financial wellbeing’ as follows:\[viii] 1\. A clear path to identifiable objectives 2\. Control of daily finances 3\. Having financial options in life 4\. Preparing for financial shocks 5\. Clarity and security for those we leave behind This is all important. But every one is focused on the numbers. And every one is geared towards a product of some form as the solution.\[7] The intentions of the movement are superb. But the understanding of how to achieve them is sadly a bit off. Delegation is often most tempting where it’s most ill-advised. Resisting the persuasive promises of ‘peace’ isn’t easy. But making zero effort as anything other than a side-effect of a healthy habit is always a false economy. The difference between pain and discomfort is how you feel afterwards. Discomfort makes you grow, pain makes you break. Much long-term money pain is a direct result of avoiding short-term money discomfort. Adding extra padding to a support a poor position doesn’t improve your posture, it accelerates its decline. Not making the short-term effort required to level-up your long-term quality of living leads to pain. None of the prescriptions in this book is hard, but they’re all immediately harder than doing nothing\[8]. To carve out your personal Good Life may be natural, but it’s not going to happen by accident. Because the world isn’t you. That’s sort of the point of you. Like the difference between practice and deliberate practice, conscious action and addicted action, you can go through the motions of the turning world, or you can turn yourself. {% content-ref url="/pages/-MBSsYGjkmjKJp7bWklH" %} [1.2.4: Money Blind](/the-book/1/1.2/1.2.4) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] This isn’t to say the step-by-step approach cannot work as a kick-start to making change where it really counts. It can. But that’s never how it’s sold. \[2] We’ll look at the specifics of how much is right for you in Part Four/at the very end (tbc). \[3] The motivated person that goes to bed dreaming of sticking to their new routine may think that the person who wakes up in their place is the same person and will need no extra motivation. This is never true. \[4] If, beyond that, you would rather have a life beset by existential angst before becoming the richest chap in the cemetery, this is not the book for you. Nothing’s the book for you. Stop wasting your time reading and go out and make more money. Make stuff people want, and make it well or sell it well. You’re welcome to come back when you’ve ‘succeeded’ only to find out you didn’t. \[5] Be careful not to hypercorrect. Pointing out that investment advice is mostly bullshit does not mean it’s all bullshit, or that finding the non-bullshit bits is impossible, and therefore an excuse for not even trying. We’ll see how to demand the good stuff in [Part 4](/the-book/4). \[6] We’ll revisit this in the next chapter, when we look at the crucial differentiation between different types of knowing. \[7] In order, and in the context of the article and the author’s book: a financial plan, a budget, cash-flow modelling exercise tied to an advised portfolio, insurance, the organisational aspect of a financial-planning service. \[8] If they weren’t, there’d be no need to write about them, for they’d be the default action. \--- \[i] Derek Sivers on the Tim Ferriss podcast \[ii] Calgacus' ‘Speech to his Troops’ in Tacitus, *Agricola* \[iii] Seneca, *Moral Letters* \[iv] Emory University of School of Medicine, ‘[Expert Financial Advice Neurobiologically “Offloads” Financial Decision-Making under Risk](https://doi.org/10.1371/journal.pone.0004957)’ Jan B. Engelmann,C. Monica Capra,Charles Noussair,Gregory S. Berns, March 24, 2009 \[v] Jan B. Engelmann, Emory University [news release](http://shared.web.emory.edu/emory/news/releases/2009/03/financial-advice-causes-off-loading-in-brain.html) \[vi] John Vervaeke, [*Awakening from the Meaning Crisis*, *ep. 27*](https://youtu.be/9j5O-tnaFzE) \[vii] Matthieu Ricard, *Happiness* \[viii] Chris Budd, quoted in [*Money Marketing*](https://www.moneymarketing.co.uk/analysis/financial-wellbeing-inside-the-movement-to-make-clients-happy-not-just-wealthy/) # 1.2.4: Money Blind ## **What is money blind?** ***If you can’t see because you have your hands over your eyes, it’s better to remove your hands and adjust to the light than to pay for an expensive guide dog*** In discussing the use and meaning of language, Wittgenstein described how we view the world in a distorted way because ‘we look at the facts through the medium of a misleading form of expression’, that standard forms of expression, however common, ‘prevented us from seeing the facts with unbiased eyes.’\[i] He likened idealising and ideologising a particular theory of usage or meaning to ‘a pair of glasses on our nose through which we see whatever we look at.’ And, he stated importantly, that ‘It never occurs to us to take them off.’\[ii] Wittgenstein suggested we at least try to take off these distorting lenses, to liberate ourselves from views that held us ‘captive’. We should not *replace* the glasses, but remove them, on the grounds that our ‘uncorrected’ way of looking at the world was probably just fine as it was. And in any case, it’s impossible to know how messed up our vision may be until we take off our glasses and compare it to an alternative. We mess up our relationships with money, and our relationships with money mess us up in turn, because we look at money’s role in living a Good Life through distorted lenses. We see all things financial as complicated and scary and in response cover our eyes. When a well-meaning, well-heeled helper offers to sell us a guide dog, we’re so grateful we barely pause to consider how much it costs, or how effectively it works. And it never occurs to us to just uncover our eyes. We remain money blind. I’m advocating neither replacement lenses, nor scrapping the current set and assuming all will instantly be well. This isn’t a manifesto for a ‘correct’ way of thinking about money so much as it’s a suggestion to think about it at all. However, even if someone’s eyes are anatomically sound, you don’t take away their guide dog until you’ve taught them to see. It takes time for eyes to adjust to new lights. This is as true in modern finance as it was in Plato’s cave. ## **Do you see money through the eyes of a child, an adult, or a sage?** ***Becoming wiser with money is a process of internalising aspects of your future self that though you do not yet possess them, can still be a symbol to guide you where you want to go*** Becoming wiser with money presents us with a quandary. The skills you are trying to acquire to transform yourself are those possessed not by the person you are, but by the person you are becoming. How does the person you are now know what it will be like to become what you could be? How do you know that becoming that person is even a wise move? We need a way of testing before we can’t turn back. Leaps of faith are terribly exciting, but sometimes it’s better to build a bridge. We need a philosophical bridge that tempts us with an inkling into a more illuminated world, shows us how to get there, and which, when we have travelled across it, becomes part of our expanded, wiser, self. A bridge that allows something to contribute to and inspire our current experience without actually being part of that current experience. This is the function of a symbol – an aspirational spark that illuminates the path of becoming. Fortunately, you’ve gone through such a transformation before. Child You crossed a bridge into Adult You by interacting with and internalising the actions of the adults around it. Adult You can cross the bridge into Sage You by internalising and interacting with sages (with the distinct advantage of the choice of sages being under far greater conscious control than the child’s choice of adults). This goes far beyond ‘learning’ the lessons of such sages, reading some quotes and banging them out on Twitter. You do not want to read Socrates; you want to know what it is to think Socratically, to in some sense *become* Socrates. It is not a lecture, it is a process in which you participate. Symbols must not be treated as fixed. To do so is to turn a potential source of inspiration into an idol, to worship a product, not a process, and thereby to *refuse* growing, not aspire towards it. Symbols open us up to levels of ourselves otherwise hidden from view. Idols do the opposite. Think of the archetype of the hero, that sits at the centre of so many stories. For those stories to transform us, we must not see the hero as a fixed image to carry around with us, but as something to aspire towards… something that inspires us to act a little more heroically… that in turn enables us to ever greater transformation. In linguistic terms, symbols are adverbial, not adjectival – they belong with actions, not nouns. When a child learns from adults, it doesn’t understand what it is doing. It’s following an aspirational symbolic idea of what it could become. Understanding comes later, after the transformation and self-transcendence of growing up. This book should be seen in a symbolic light. A tempting beam from a brighter future that draws you along your own path to becoming a financial sage. That shines lights on previously unexamined aspects of your financial life, to inspire examination in a way that gradually changes how money is represented in your mind, in an ongoing virtuous cycle. \* Plato’s famous allegory of the cave is chock-full of symbolism. We are asked to imagine a group of people living their whole lives underground, chained so that they can see only shadows on a wall cast by the real world above them. Yet, never having known anything else, they take this shadowy puppet show to be truth. One day, one of the prisoners escapes his chains. ‘What do you suppose he’d say,’ Plato asks us, ‘if he was told that what he used to see before was of no importance?’\[iii] And as for the confusing 3D objects around him, ‘Wouldn’t he believe the things he saw before to be more true?’ Wouldn’t he, in short, go on the defensive? Wouldn’t he shield his eyes from the glare, and deny that everything he’d taken for truth were in fact no such thing? We are encouraged to think that our unchained man likely needs to be dragged to the surface. And when he gets there, ‘would he be able to see a single one of the things people call real?’ No, we are told, he would not. Not at first. The light is blinding and the fear is paralysing. He must acclimatise. Perhaps starting with shadows, then moving on to reflections, then the things themselves, then the lights of the night sky, until finally he’s ready to see the sun. The story goes on, but the key thread for our immediate purposes is the acclimatising acceptance of reality. Reluctance to abandon the illusions becomes reluctance to return to them once the taste for reality takes hold. But the path is painful, and change cannot happen without time and effort. This cycle of ascent\[1] – of coming into contact with clearer patterns of thinking which change the self, thereby making that self better able to distinguish still clearer patterns, which further changes the self, and so on such that we come into ever closer contact with reality, become ever wiser – is a template not only for you working through the lessons in this book, but also for the book’s lessons to continue to work through you. A paced prescription of new patterns of thinking, and a lifetime of application with adjustments to account for growth in your money mindset. You are operating on your mind. It’s time to go to brain-surgery school. {% content-ref url="/pages/-MBJ7nsykjdXBcfc-e\_6" %} [1.3: Money and the Good Life](/the-book/1/1.3) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Referred to in Ancient Greek as *anagoge*, if you’re into that sort of thing. \--- \[i] Ludwig Wittgenstein, *The Blue and Brown Books* \[ii] Ludwig Wittgenstein, *Philosophical Investigations* \[iii] Plato, *The Republic* # 1.3: Money and the Good Life Paying attention to the right things and knowing things in the right way shapes your brain, trains your wisdom, and enhances the goodness of your life > Tell me to what you pay attention and I will tell you who you are.\ > – Jose Ortega Y Gasset, *Man and Crisis* ## What this chapter is about **Knowing about knowing** – Seeing clearly is about wiring your brain to systematically beat self-deception. This is a participatory process, grounded in an understanding of the four types of knowing, and how to use that understanding to set yourself up to generate systematic insights. **The Good Life** – The Good Life is our only goal. That it largely defies definition is irrelevant (though this doesn’t stop people wasting energy worrying about it in a way that misunderstands that we are participating in a process, not trying to ‘win’ an objective reward). ## What this chapter isn’t about **The end of history** – Set it and forget it can be great investment advice. But investing in general looks through a much wider lens. You and your environment are continually changing, and because your relationship with money is so deeply embedded with this ongoing interaction, you cannot ‘arrive’ at a place where everything – or anything – is magically settled. This is a participatory process, not a thing to secure and protect. Use your understanding as a way of life, or lose it, and life with it. **An objective right answer** – When it comes to living well, there is no objective right answer. But money makes us believe otherwise in subtle and pernicious ways. It’s important to recognise the difference between propositional and procedural knowing (statements of fact and technical know-how) that is only ever incidental to our lives, not integral or instrumental to them. # 1.3.1: You are a brain surgeon ## **Pay attention** ***All behaviour change is brain change, and brain change is a discipline of where, and how, to pay attention*** Before you pay anything else, pay attention. ‘There is an endless war of nerves going on inside each of our brains’, wrote psychiatrist, psychoanalyst, and author Norman Doidge. You are losing this war. ‘If we stop exercising our mental skills,’ Doidge continues, ‘we do not just forget them: the brain map for space for those skills is turned over to the skills we practice instead.’\[i] In other words, the common diet strategy of allowing yourself a minor transgression now in return for the promise of behaving better later is doomed, because the very act of transgression is a vote for a brain that’s going to be even more likely to want to misbehave later too.\[1] It’s also a kick in the teeth for those that live their lives in resting-on-laurels mode, desperately wishing that anything, once ‘secured’ is set for life. Whatever our excuses say, we are blocked from doing what we want to do – from becoming who we want to become – not by isolated incidents but by systematic errors. You grow out of systematic errors with systematic insights: new ways of seeing the world that solve lots of errors at once. A pertinent example of this in your relationship with money is the ability to look at the obviously silly behaviour of others (e.g. an extravagant wedding) and connect it to subtler things in your own life (e.g. Champagne-based showing off every Friday night) and realise they come from the exact same place. Amateur behavioural scientists love to describe systematic errors, ideally in an infographic. Yet as above, *describing* behaviour doesn’t *explain* it, let alone prescribe how to *change* it. The prescription is brain surgery. The way your relationship with money is mapped in your brain is either changing or being reinforced with every decision about how to make it, save it, spend it, invest it and even just think about it. As Iris Murdoch wrote: ‘The task of attention goes on all the time and at apparently empty and everyday moments we are “looking”, making those little peering efforts of imagination which have such important cumulative results.’\[ii] You are losing this war not because you are lying to yourself, but because you are falling for your own bullshit.\[2] You cannot lie to yourself because you cannot change a belief simply by telling yourself it’s wrong. Beliefs are not a voluntary action; you are committed to your subjective ‘truths’, even if they are objective falsehoods. You can, however, change what you pay attention to. Bullshit, in the technical sense\[iii], slips concern for truth into its back pocket while it’s deceiving you with something supposedly more salient: more relevant according to rhetoric, but not reality. You don’t stop caring about truth, you just forget it’s there to care about. This is a book about defeating self-deception, not changing beliefs. It’s about thoughtfully directing your attention, rather than letting it be caught by a succession of shiny distractions. You can bullshit yourself because you can direct your attention. But because of this you can also beat bullshit at its own game. When you pay attention to something you tell your brain it’s something worth paying attention to. It stands out for you better in future. Do this often enough and what once required a thoughtful direction of attention begins to grab attention automatically. You slowly but surely begin to be concerned with what you ought to be concerned about. Your beliefs will update themselves in due course. ## **Defeating self-deception** ***To defeat self-deception, train to see all your actions as an allocation of limited resources to either helping or hindering the goodness of your life*** Defeating self-deception starts with paying attention. Specifically, paying focused attention to what is relevant to the goodness of your life. As Doidge writes, ‘Paying close attention is essential to long-term plastic change \[…] While you can learn when you divide your attention, divided attention doesn't lead to abiding change in your brain maps.’\[iv] And to any old dogs out there: do not be dispirited! Neuroplasticity – the capacity of your brain to rewire itself and cultivate more useful connections – doesn’t fade. As Professor Emeritus of Neuroscience Michael Merzenich adds, if an adult brain pays sufficient attention, ‘everything that you can see happen in a young brain can happen in an older brain \[…] the changes can be every bit as great as the changes in a newborn.’\[v] Like people age because they stop moving just as much if not more than they stop moving because they age, so our brains become rigid not through nature, but through choice. To return to Doidge: ‘Anything that involves unvaried repetition – our careers, cultural activities, skills, and neuroses – can lead to a rigidity.’\[vi] So what should we be paying attention to? What patterns should we be moulding our plastic brains into knowing, and using? Living things have feedback cycles. Output feeds back in as input, in an incessant interchange of interactions. You bounce around in an environment, bumping into things, the environment changes, which changes you, and how you bounce around, and so on. We understand ourselves only in context. So with money. You use money in a certain way, consequently crafting a life and an environment that encourages you to use it in a certain way, and so on. And so with the mind in general, ‘mental activity is not only the product of the brain but also a shaper of it.’\[vii] It is these interactions which are worthy of attention. Not only how the universe of money and all it entails is integrated together but also how your mind is integrated with it. But what is it we need to know? Why are we paying such close attention? If picking the best investment\[3] were what was required to turn money into a Good Life, we wouldn’t have to know anything too special. Recall our resources-into-good-life framework: it’s the middle bit – our human-resources interaction – that’s important. The isolated inputs on the left are circumstances, and circumstances change. The outputs on the right are not a fixed goal to be arrived at, and even if they were, a focus on the end product doesn’t get you there, the process does. However, ‘knowing’ as we commonly use the term is not enough. For common knowledge does not cultivate wisdom. Becoming wise with money would not be difficult… if you were starting from scratch. If cultivating a healthy relationship with money were taught in schools, it wouldn’t be complicated and scary for anyone, and no one would need this book. Excavating self-deceptive strata solidified by years of neglect, and beating back the incessant waves of bullshit from your brain, and from the world at large, is more difficult. But it’s far from impossible, and it quickly gets easier. And it matters enough to try. ‘There are, unfortunately,’ wrote Jung, ‘all too many who are content to learn words by heart, and to put these words in the place of experience, thereby becoming more or less addicted, according to temperament, either to faith or to criticism.’\[viii] Common knowledge – especially in personal finance – learns the names of things, but overlooks their experiential importance, and subsequently robs them of their practical utility. We need to embrace a better kind of knowing. {% content-ref url="/pages/-MBSt4jqqGQqVTR3s\_t9" %} [1.3.2: The four types of knowing](/the-book/1/1.3/1.3.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Having a pre-set ‘cheat day’ is a possible way around this, but the ‘eat junk’ side of cheat days (as opposed to the ‘occasionally eat excess calories’ side) is just a psychologically preferable management system; cheat days aren’t a cure. The only cure is identity change. This isn’t a diet book, though the best diet book would also be more about rewiring your brain than about your shopping basket or exercise routine. \[2] ‘We are always making ourselves susceptible to bullshit because we are being driven by powerful motivations that are salient to us that are greatly in excess of our understanding of their truth or reality. We are always all of us bullshitting ourselves.’ – John Vervaeke, [*Awakening from the Meaning Crisis, ep. 4*](https://youtu.be/Lhl51bZQlM8) \[3] By the way, there is no such thing, as we’ll see in [Part 3, Section 4](/the-book/3/3.4). \--- \[i] Norman Doidge, *The Brain That Changes Itself* \[ii] Iris Murdoch, *The Sovereignty of the Good* \[iii] See Harry Frankfurt, *On Bullshit* \[iv] Norman Doidge, *The Brain That Changes Itself* \[v] Michael Merzenich, quoted in Norman Doidge, *The Brain That Changes Itself* \[vi] Norman Doidge, *The Brain That Changes Itself* \[vii] Norman Doidge, *The Brain’s Way of Healing* \[viii] Carl Jung, *Two Essays on Analytical Psychology* # 1.3.2: The four types of knowing ## **Do you know how to know if you know?** ***Not all knowledge is created equal; life is lived beyond the boundaries of the textbook – your knowledge of how to live it needs to match*** Philosophy is pointless if it doesn’t help you live better. It does this through upgrading the quality of your decision-making. This is not, however, about individual decisions. It’s about cultivating underlying wisdom that makes wiser decisions your default setting. Any plan predicated on being able to summon peak perspicacious powers on cue is doomed to fail, especially when those powers are most in need. What counts as wisdom is a complicated topic. Focusing on money helps to keep our eyes on a guiding, practical prize. There are four ways we can ‘know’ about money\[1]. #### **1. Propositional knowing** This concerns statements of fact. It is knowing what stuff is, usually in the form of ‘I know *that*…’. It is universal, unchanging, and independent of context. The numbers in a bank account, for example. Indeed, wherever numbers are the focus, we’re in the realm of propositional knowing, and we no more have any insight about money than we have insight about what it’s like to share a meal with someone when we know how long the table is and what our companion is wearing. Propositions are related to beliefs. To do anything with them, we need to add some procedural knowing. #### **2. Procedural knowing** This concerns technical skill; pragmatic, practical know-how. It is how stuff works, not just what stuff is. It is variable and context-dependent. It is knowledge garnered through competence on the road to mastery, that requires the sort of refined motor patterns and brain maps that can’t be trained from reading a textbook: think of the difference between the action of swinging a tennis racquet and the physics of it. Most advice gets stuck here, because for the dispensers of advice, it’s simply so much easier to sell you an objective blueprint than it is to help you more deeply. Note that tailoring a blueprint to your situation is different to developing an understanding of the interplay of you and your situation from within (which is what we ultimately want). Procedural knowing can take a factual proposition like not chasing performance and put it into a set of investment principles. However, living those principles, using them to improve not only your portfolio, but what that portfolio does for your life, requires additional perspective. #### **3. Perspectival knowing** This concerns awareness and perception in context. It is knowing what is relevant right now, in your current circumstances. Right now, these words are (hopefully) standing out for you, but the feel of your clothes on your skin is likely not (at least before you read that). In the world of money, perspectival knowing is about awareness of opportunity costs. Every time you do anything with money, you are not doing another thing. This is too-easily and too-often forgotten when we’re blinded by the shininess of short-term super-salient things thrust into our faces by sales tactics. Intention is important here. Just as the same chat-up line can bomb if delivered from a place of desperation where it would successfully woo if delivered with confidence, so can the same purchase action work if the intention is to live aligned with a personal version of the Good Life, rather than one borrowed from an advert. Society will solve neither the opioid crisis nor its web of individual meaning crises when it thinks the solution is for sale. Perspectival knowing is to know money by knowing what it is like to be a person that has some, to see it in the context of a universe of opportunity costs. It is the knowledge of what it is like to be something, i.e. a human in a particular time, place, and situation. This makes it closely linked to the next type of knowing. Because to be that human is a snapshot, but that human is also always becoming another human. #### **4. Participatory knowing** This concerns a shared, symbiotic, identity-based knowing. There is an inherent degree of internalisation (rather than mere ownership) of object by subject. It is money becoming part of the same pool of a human’s resources, as their intelligence, network, bodily abilities, life expectancy, etc. – one of many resources all aimed at a single goal. The classic example is the knowledge of what it is like to be a parent. It is a transformative experience\[2], that cannot be known in advance by any amount of propositions, mastery of any procedure, nor even understanding of a parental worldview from either the parent’s or the world’s perspective. Because the act of becoming a parent changes the person doing the knowing, the only way to know what it’s like is to be, or rather become, one. More crudely, a pen takes on a use only when there is a human hand there to pick it up and write with it, and a human-pen hybrid is fundamentally different to a human and a pen side by side; the act of writing with the pen is fundamental to neither human nor pen. Our participatory relationship with money is incessant. Our interactions with it are constantly shaping our identity and the environment in which that identity is finding its way. And the money-environment in turn shapes us. ## **Knowing what to do with your new knowledge of knowing** ***Leverage participatory knowing for lasting behaviour change*** In *Alchemy*, Rory Sutherland relates how ‘Robert Zion, the social psychologist, once described cognitive psychology as “social psychology with all the interesting variables set to zero” ’.\[i] Analysing human behaviour outside of social context is of very limited value. Knowing money in a propositional and procedural way is incidental to our lives. Knowing it in a perspectival and participatory way is instrumental and integral to them. I’d read Aristotle many years before working in financial advice, but seeing people relate to money, and the effect of those relationships on the quality of an individual’s life transported the different-types-of-knowing theory from the ancient world into something more modern and more practical. By definition, if you want to change a behaviour, your knowledge of a thing must extend beyond its narrow technical boundaries. Otherwise you’ll be like every other schmuck who has ‘tried everything’ in a battle against an unwelcome behaviour, save for questioning if the identity that is bankrolling the resistance must continue to be supported (for example, a belief in a ‘sweet tooth’ or other narrative-backed as opposed to biologically backed addiction). What we’re aiming for is practical insight. When you know the role something plays in your life, how it becomes a part of you, and how that subject-object hybrid fits into the wider world – only then can you claim any sort of insight into using this knowledge in the service of something practically wise. As Jung wrote, ‘Does a thing or fact ever mean anything in and of itself? We can only be sure that it is always the human being who interprets, that is, gives meaning to a fact. And that is the gist of the matter for psychology.’\[ii] If you know what a thing is, how it works, how it sits in context, and how it works with who you are, there’s no excuses for not using it well. This book is about cultivating a philosophically grounded conviction within you, rather than the old-school sales model of trying to persuade you of something for long enough to guide an action or two until a more persuasive idea comes along. To return to Jung, ‘The artful denial of a problem will not produce conviction; on the contrary, a wider and higher consciousness is called for to give us the certainty and clarity we need.’\[iii] Right now, we’re too deep in the weeds to make sense of it all. The wiring of our money-mindset neurons is as messed up as a pair of headphones that’s been stored in a salad spinner. And of course this is taking place in a society incentivised to be painfully unhelpful in both prescriptions and how obnoxiously they’re promoted. We need to zoom out. \* There is, naturally, a posh technical term for a psychological zooming out – construal level theory. This is psychologist for chilling out and stepping back for a second to make challenging tasks easier. It doesn’t matter if the distance you create is in time or space, or is more mental or hypothetical. Think of acting as a devil’s advocate or of Brian Eno’s set of ‘oblique strategies’ cards.\[3] So what does the world of money relationships look like when viewed from above? One of the best tools in a financial planner’s toolkit is time travel – breaking the usual ‘buy now’ framing of financial decisions, and considering the consequences of a decision in 10 minutes, 10 days, 10 months, or 10 years’ time? How long did the uplift from the last similar purchase last? Did you adapt to a new world that was the same as your old world, only more expensive? Or did life become consistently better thereafter? What does one small decision now look like when aggregated into a lifestyle choice? This simple exercise works because it forces you to break out of the first two types of knowing and reminds you that your financial decisions have relevance only in the context of your life. It helps you see yourself and your circumstances – and the interplay of the two – differently, reframing what appears relevant, and then applying your powers of reason to make a wiser decision. Making wise decisions without such a transformation in your view of both yourself and what is most salient to that self, especially when it comes to money, is nigh-on impossible. Seeing money issues as a series of isolated incidents is at the heart of how people mess things up. People see money in isolation and forget themselves. If we want to make proper changes, we need something more systematic. As John Vervaeke explains, ‘If you try to change your behaviour and you’re not doing things that give you skills and identities for altering your salience and your sense of self, your ability to change a behaviour fails.’\[iv] Recall how even with all the propositional and procedural knowledge in the world – a perfect nutritional blueprint – a diet is doomed to fail if the dieter never changes the belief that they possess a ‘sweet tooth’. Your beliefs about yourself have both internal and external origins. Those imposed by society are often the most resistant to challenge. Zooming out makes this easier. As Vervaeke continues, ‘You’re less easily pushed around by social influences precisely because you’ve lifted yourself out of that usually unchallenged arena of behaviour. It makes you more creative, it generates systematic insight.’ Moving between levels of construal – zooming in and out – produces the sort of systematic insight that improves your relationship with money. Flipping between high-level theories and their real-world application aims at changing behaviours right from their roots in your brain. To become a better thinker is to become a better person who consequently becomes a better thinker, and so on. Procedure becomes process becomes perspective becomes participation. This is the map for our journey out of the cave of faulty financial thinking, and towards an embedded practical wisdom. {% content-ref url="/pages/-MBSt4VCEI9kbrA-3m4d" %} [1.3.3: Putting knowledge to use: becoming practically wise](/the-book/1/1.3/1.3.3) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] These correspond to the Ancient Greek terms *episteme*, *techne*, *noesis*, and *gnosis*. Though these terms (and indeed other ancient words to do with knowledge, wisdom, intelligence, insight, etc.) have been around for millennia, I am hugely indebted to John Vervaeke for breathing new life into them in a modern cognitive-science context. Where possible, I’ve avoided using uncommon words, though it has not always been possible. Unfortunately accurate understanding is a casualty of the drive for simplicity over precision. Simple is great, but simplicity for simplicity’s sake is a false economy. Precision is paramount if we are to avoid fooling ourselves with equivocation and the illusion of true understanding. \[2] To borrow the language of L.A. Paul, from *Transformative Experience*. \[3] A deck of cards designed to help artists break creative blocks by encouraging lateral thinking, e.g. work at a different speed. \--- \[i] Rory Sutherland, *Alchemy* \[ii] Carl Jung, *Modern Man in Search of a Soul* \[iii] Carl Jung, *Modern Man in Search of a Soul* \[iv] John Vervaeke, # 1.3.3: Putting knowledge to use: becoming practically wise Abstract thinking about money easily drifts into self-deception; for money to serve the Good Life, we need to anchor it to a practical philosophy Abstract notions of wisdom are all well and good, but what to do with money is an intensely practical topic.\[1] ‘Wisdom,’ wrote Matthieu Ricard, ‘is precisely that which allows us to distinguish the thoughts and deeds that contribute to authentic happiness from those that destroy it. Wisdom is based on direct experience, not dogma.’\[i] The Greeks – unsurprisingly – had a word for particularly practical wisdom: *phronēsis*. It’s the sort of wisdom derived from our perspectival and participatory forms of knowing. It stands in contrast to the cross-contextual sense of wisdom more commonly conjured up in ancient contexts, which they called *sophia*. Where *sophia* is concerned with understanding underlying principles, *phronēsis* is pragmatic, variable, context dependent, and oriented towards action. It implies good judgment, helpful habits, and excellent character. In some spirits it can mean ‘mindfulness’. In others (including Part Three of this book) it simply means not being an idiot\[2]. It’s less about knowledge of rules, and more about knowing what to do in a given situation. It’s the difference between telling someone to calm down and getting them to breathe deeply. The concept of *phronēsis* also has important implications when we look at spotting a good adviser in Part Four. We need sophia-esque wisdom too, of course. But people rarely go wrong because of a lack of understanding of principles or even the processes in which those principles fit. They go wrong because they fail to use such understanding to make their lives better. They fail to grasp the interpretive significance of the descriptive knowledge. Investments provide unlimited scope for crunching numbers, but it’s practically pointless if the crunching doesn’t improve your living. The first two layers of knowing are textbook knowing. In contrast, ‘Phronēsis,’ Aristotle tells us, ‘is concerned with human affairs, namely, what we can deliberate about.’ No one can deliberate about what cannot be otherwise. You cannot debate the output of a mathematical equation. Nor can you deliberate, Aristotle continues, ‘about what has no goal that consists in a good achievable in action.’\[ii] The goal of phronēsis – of practical wisdom – is not only how to choose a path to an end, but how to choose the end most consistent with the aim of living well overall.\[3] For a tool as convertible as money, with almost infinite options for deploying it towards the intrinsically individual goal of a Good Life, there is a surprising confluence of ways in which it is wielded. Especially so, given that the most common ways have an obviously terrible track record of not working very well. Recall our earlier contemplation of the ways in which our deliberation goes awry – misunderstandings in problem formulation, and fallacies in reasoning towards a solution. Phronēsis is the process of overcoming these: achieving the right things by the right steps. It is in this way the antidote to another concept we’re all aware of (in life, if not in language) – *akrasia*. *Akrasia* is the unhelpful force that prevents us from doing what we deep down want to do, know well enough how to do, know we ought to do, but for some reason don’t do. It’s our procrastination, our misprioritisation, and our falling prey to distraction all in one. It is impossible to be both phronetic and akratic. Practically wise people do not act against their better judgment. Practically wise people are not blind to the right actions to take with money. Money problems are mindset problems. Specifically they are problems of self-deception. We adopt and believe stories about money that do not serve our higher aims. Philosophy is a cure for self-deception. In the hierarchy of our cognitive development, the philosopher is to the adult as the adult is to the child. Better able to both zoom out and zoom in, to better understand the world, themselves, and the perspectival and participatory interplay of the two. Better able to see through the veil of self-deception to the Good Life, and to live it, as a natural side-effect of their cognitive experience. But what, precisely, is the Good Life that we want to be living? {% content-ref url="/pages/-MBSt1p0IaNm5gYj-Aff" %} [1.3.4: What is the Good Life?](/the-book/1/1.3/1.3.4) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] In human contexts, the answer is never accumulating more knowledge in a propositional or procedural sense. A paper that counted for a quarter of my degree was on money in an abstract political, social, and economic context. It taught me nothing of any relevance when advising people how to make more of the money in their lives. \[2] Doing idiotic things is still entirely possible, of course; the point is that such things should not be derived from a positioning of oneself as an idiot. \[3] In Aristotle’s words, ‘It seems to be characteristic of the practically wise person to be able to deliberate nobly about what is good and beneficial for himself, not in particular respects, such as what conduces to health or strength, but about what conduces to living well as a whole.’ (from *Nicomachean Ethics*). See also Principle #2: There is only one goal. \--- \[i] Matthieu Ricard, *Happiness* \[ii] Aristotle, *Nicomachean Ethics* # 1.3.4: What is the Good Life? ## **What is the Good Life not?** ***For individuals, quality of life measurements are mostly harmful, and the feelings that define the Good Life defy description*** ‘If you wish to converse with me,’ said Voltaire, ‘define your terms.’\[i] In our resources-into-good-life framework, we’ve already defined our exhaustible resources as money, time, and energy. The Good Life is what everyone is trying to turn those resources into.\[1] However, everyone aiming at the same thing does not mean everyone is more likely to hit it. In fact, it is because we mistakenly view having the same general goal – the Good Life – as there being the same specific best way to achieve it – the same system of objective goals – that we go so commonly awry.\[2] It is not *the* Good Life at which you want to aim, but *your* Good Life.\[3] Failure to look deep enough into our desires concerning the sort of life we want to lead is like charging into an essay in an exam without a plan: it is not lack of time, but our fear of running out of it that causes a shoddy solution. We may get the gist of everything down on the paper, but if it ends up being structured in any sort of meaningful way, we’ve got damn lucky. Defining *your* Good Life is hard, especially when the lenses through which you’re examining it are misted up with misleading messages from society’s marketers and your own mischievous addictions.\[4] This encourages us to delay the defining, swapping pondering a precise purpose for stitching together an all-purpose safety net instead, to protect us from demons that in most cases aren’t real. There are plenty that scoff at the idea that happiness is a house so big you could have Black Sabbath round without disturbing the neighbours, a title that you can pretend to be embarrassed to use, and a private jet on standby, but no amount of scoffing hides the fact that these same people exhibit actions that while they flower less exuberantly, are firmly rooted in the same crap beliefs. Whether you want to or not, you’re taking actions to some sort of end, so if you don’t specify those ends yourselves, something will be sucked in to fill the void. A common way people fool themselves is to think the void-filling borrowed objective goals that they’re too busy chasing to work out what their ‘true’ ones actually are, are practical temporary fixes, as opposed to the waste of life they are in reality. \* In many ways the Good Life defies definition because it is inherently personal. However, something being partially ineffable doesn’t mean it’s entirely inexplicable. Just because you can’t always put your finger on precisely what combination of sleep, food, company, and other assorted actions lead to feeling oddly productive, at ease, and as though you’re that bit closer to fulfilling your potential, or living like the best version of yourself, it doesn’t mean you can’t have a pretty good guess and try to engender such a state more often, all the while remembering that it is the engendering that is key.\[5] As ass-kicking philosopher Bruce Lee reminds us: ‘The Good Life is a process, not a state of being’\[ii]. Few outright argue that the Good Life is a destination to be arrived at, but everybody is so drawn towards the supposed security of a promised land and the lack of thinking this ‘arrival fallacy’\[6] promises that they act like it’s true anyway, often at the highest possible cost. Landing on a precise definition isn’t as important as the process of looking for one. Failing to think through to the bitter end what it is we’re all looking to achieve with our money, time, and energy – and continually revisiting and refreshing our conclusions – is the root of all money mistakes. Most people stop this process when it gets difficult. But it’s only after it gets difficult that anything moderately insightful emerges. Difficulty is a sign that you haven’t worked something out yet. Everything before that is just patting yourself on your back for remembering your own name. It’s helpful, therefore, to think about what the Good Life isn’t. It isn’t happiness. Happiness is fleeting, ill-defined in itself, and it’s perfectly possible to be happy and unfulfilled to the extent that we’ll give up a smile in search of fulfilment even when we have no idea what fulfilment looks like nor if there’s much chance of finding it.\[7] Furthermore, as Mihaly Csikszentmihalyi noted, ‘Happiness and unhappiness \[are] independent of each other \[…] just because a person is happy it does not mean he can't also be unhappy at the same time.’\[iii] Perhaps the most common modern interpretation of the Good Life is the concept of ‘life satisfaction’ – a sort-of catch-all term for an evaluation of one’s life as a whole, rather than current feelings. We’ve realised that happiness can be fickle, fleeting and stubbornly unscientific, so we’ve looked for something with a better basis for objective measurement. And as per the rules of modern life management, if it can’t be measured, it may as well not exist. However, my experiences navigating the mental mazes of millionaires has taught me that, for our purposes, ‘life satisfaction’ scores are bullshit. Life satisfaction has its uses at scale, but for a given individual, especially when analysing one’s relationship with money, it’s irrelevant. Not only does it specifically ignore the very feelings that are a guide to one’s Good Life, but, as Daniel Kahneman points out, ‘life satisfaction is connected to a large degree to social yardsticks.’\[iv] What this means is that when asked to evaluate how satisfied someone is with their life on the whole, people (especially in my experience ones for whom wealth feels an inescapable part of who they are) answer not how good their life feels (in the flourishing and fulfilment-of-potential sense we’ll come to in a minute), but instead answer ‘how could I not be?’ regardless of their actual feelings. Look a millionaire in the eye and ask them how satisfied they are with their lot and their body will always give a more honest answer than their words.\[8] This is why income is a much stronger predictor of ‘life evaluation’ scores than it is of positive or negative feelings.\[9] If life doesn't feel good, it's not a Good Life, however much you may think you ought to feel good about it. If you can’t feel good with untold millions sloshing around, what on earth does that say about your life choices? ## **How do you define what defies definition?** ***You – and brain scanners – know when a life is being well-lived, and the actions that lead you there*** Despite consistently looking like we’re lost, we do know the Good Life when we see it. Or rather feel it. We know what works, and what doesn’t, but we pay insufficient attention to the feelings that determine each. The trouble is we’re trapped in the limiting cage of our language, desperately going round in circles, repeatedly pawing at the same unillumined and unilluminating corners, like an anxious tiger in a shitty zoo that has yet to figure out how glass works. To cut through this, we need another helping lexographical hand from the Greeks, and their concept of *eudaimonia*, which is basically Greek for being comfortable in your own skin. Eudaimonia is more than happiness, or meaning. According to historian Anthony Gottlieb, ‘eudaimonia means “happiness” only in a very broad sense of the English word, for it implies successful, admirable living and all-round good fortune, as well as a contented state of mind.’\[v] Others link it to concepts such as fulfilment of potential, or frequently finding oneself in the flow state. The definition doesn’t really matter. It’s like trying to define love or happiness or health. We are clear about what it’s not, but we only really know what it is when we are experiencing it. What we’re focused on is a feeling of flourishing, of living a life that feels worthwhile, in whatever idiosyncratic form that takes. The word ‘eudaimonia’ is derived from the idea of ‘having a good guardian spirit’, which suggests living as you would were your better judgment sat on your shoulder. There is therefore a strong link to phronēsis – do the practically wise thing consistently and you live well, live up to your potential. For eudaimonia is not a fleeting emotion. It is something you do. Something you feel so deeply that it is part of who you are. It is a way of life. Eudaimonia isn’t only a fancy word, a wishy-washy attempt to derive authority from some folk long since lost to Aegean depths. It’s a concept of lasting happiness. The type Matthieu Ricard has described as, ‘a way of interpreting the world, since while it may be difficult to change the world, it is always possible to change the way we look at it.’\[vi] It’s vital to the processes of cultivating a better relationship with money and of making better financial decisions. Because the purposes of these processes is living a better life, and the pathways on which they work to do that are all in the brain. It’s time to transport eudaimonia from Ancient Greek academies to present-day cognitive-science labs. \* Eudaimonia changes your brain. In a really cool way. People judged to be high in ‘eudaimonic well-being’\[10] tend to have brains better at the exact sort of higher-order thinking, including goal-setting, language, memory, and processing of emotional information that is key to taking the sort of better actions and making the sort of better decisions that we’ve been talking about.\[vii] Outside of psychedelic therapy, brains don’t tend to rewire themselves without a sustained series of actions. Specifically, choosing the right course of action over all the wrong ones. And as with diets that are based on denial being doomed to fail,\[11] these actions need to come from a positive place. A place that reframes defensive ‘can’t’s into either empowering ‘can’s or identify-affirming ‘don’t’s. A place that sees stepping stones rather than obstacles and figures that if something important and daunting doesn’t instantly make sense, that’s probably to be expected, and there’s probably a tiny initial step that can be taken anyway, until without consciously trying, things start to *flow*. As exemplified in the concept of ‘flow’, or the Daoist notion of ‘*wu wei*’,\[12] once your brain is wired for the Good Life, the actual living of it (despite its quasi-elusive nature and the effort required to prepare the neural environment for it) happens effortlessly. Indeed, if the execution feels effortful, the benefits are likely to escape into the non-eudaimonic ether. Pressure to be present is an antidote to actually being so. This is why perspectival and participatory knowledge is so important. You cannot become such as you are if you’re looking for yourself in a textbook. Right actions are about existentially becoming, not mechanically doing. Such a way of knowing may lead us to wisdom. But what are we being wise for? What does being wiser with money mean in practice? {% content-ref url="/pages/-MBJ7tm7NQj9Ylbibzb6" %} [1.4: Is the Good Life for Sale?](/the-book/1/1.4) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Well, almost everyone. ‘There is one case and only one, when man may deliberately and consciously desire something that is downright harmful even stupid, even extremely stupid, and that is: to have the right to desire what is even extremely stupid and not to be duty bound to desire only what is intelligent.’ – Fyodor Dostoyevsky, *Notes From Underground* \[2] See Rule #13: Beware the Arrival Fallacy (also [Part 2, Section 3.1](/the-book/2/2.3/2.3.1)). \[3] See Rule #4: All Success is Subjective (also chapter [Part 2, Chapter 4](/the-book/2/2.4)). \[4] See Trigger #4: Needs, wants, addictions (also [Part 2, Section 3.2](/the-book/2/2.3/2.3.2)). \[5] Describing such a state, whether you call it being a ‘fully functioning person’ (a la Carl Rogers) or ‘self-actualised’ (a la Abraham Maslow) or being a goddamn rock star, isn’t in any case as helpful as explaining the actions that produce such states. It’s the difference between rabbiting on about building good habits being the key to achieving anything and everything with ease, and realising that habits emerge as a result of doing the things your environment makes easy. \[6] See Arrival Fallacy, [Part 2, Section 3.1](/the-book/2/2.3/2.3.1). \[7] Even if we follow Professor Paul Dolan’s take, in *Happiness by Design*, that happiness is about feeling both pleasure and purpose and that ‘life is less about trading off happiness now for happiness later (and vice versa) and more about trading off pleasure and purpose at different rates at different times’ we still don’t get much insight into what it is we should be doing with our cash. \[8] As rationalist website Clearerthinking.org puts it: ‘Another potential problem for the evaluative method is that people tend to make a comparative judgment when assessing their life satisfaction. Evidence suggests that we first judge what the norm of satisfaction is based on our social group, or the group we strive to be part of, then decide whether things like our career status, income or relationships either exceed this norm or fail to meet it.’ \[9] See, for example, Ed Diener; Weiting Ng; James Harter; Raksha Arora, *Journal of Personality and Social Psychology, Vol 99 (1), Jul 2010, 52-61* \[10] Assessed across six dimensions: self-discovery; perceived development of one's best potentials; a sense of purpose and meaning in life; investment of significant effort in pursuit of excellence; intense involvement in activities; and enjoyment of activities as personally expressive. \[11] Something we’ll return to in [Part 2, Section 2.1.2](/the-book/2/2.2/2.2.1/2.2.1.2). \[12] ‘According to the central text of Daoism, the Dao De Jing: “The Way never acts yet nothing is left undone”. This is the paradox of *wu wei*. It doesn’t meant not acting, it means ‘effortless action’ or ‘actionless action’. It means being at peace while engaged in the most frenetic tasks so that one can carry these out with maximum skill and efficiency.’ – The School of Life, *The Book of Life* *---* \[i] Voltaire, quoted in Will Durant, *The Story of Philosophy* \[ii] Bruce Lee, *Striking Thoughts* \[iii] Mihaly Csikszentmihalyi, *Flow* \[iv] Daniel Kahneman, interview with Haaretz \[v] Anthony Gottlieb, *The Dream of Reason* \[vi] Matthieu Ricard, *Happiness* \[vii] See Shirley H. Wang, [*The* *Wall Street Journal*](http://online.wsj.com/article/SB10001424052748704893604576200471545379388.html), for a summary: # 1.4: Is the Good Life for Sale? Money can fuel your inner fire, or accelerate you along the road to nowhere; take control of your life story, for the default destination is disaster > I preferred the riches that paralysis had brought me to those of my class: I felt I was living more intensely, that at last I was human.\ > – Philippe Pozzo di Borgo, *A Second Wind* > People should think less about what they ought to do and more about what they ought to be.\ > – Meister Eckhart, quoted in Aldous Huxley, *The Perennial Philosophy* ## What this chapter is about **Money’s role in ‘success’** – The only measure of ‘success’ is living a Good Life. The correlation of this with money is non-existent. But the correlation between the Good Life and how one thinks about money is sky-high. Money is more readily used to amplify self-deception than defeat it, but this needn’t be the case. **Editorship of your life story** – Using money well is hard enough to warrant getting help. But finding the right help can be harder still. You want an editor, not a co-author or a press agent for the unsatisfactory (but very shiny) status quo. ## What this chapter isn’t about **The relentless pursuit of more** – Blind accumulation has (probably) never worked for anyone, and yet it’s the default choice for everyone. Understanding why this is (as opposed to bemoaning it while carrying on the pursuit in subtler ways) is key to doing something about it. **Wishy-washy woo-woo mindfulness** – We want to be mindful about money, but not in the way mindfulness is usually portrayed to the modern western mind. Mindfulness is an active participatory process of remembering. Becoming wiser with money is about remembering what matters, when it matters. And what matters is never matter. # 1.4.1: Money. Huh. What is it good for? ## **A way of life, or a way of death?** ***If there is a secret learned from being inside the heads of rich people, it is this: money can just as easily hinder a life as help it, and the way to guarantee it hinders is to assume it helps*** ‘The chief value of money,’ wrote H.L. Mencken, ‘lies in the fact that one lives in a world in which it is overestimated.’\[i] Money is great at getting you places. It’s rather less good at judging if those places are worth getting to. Sometimes going somewhere no one else can go is profoundly good. Other times it leaves you miserable in a palace when everyone else is having fun playing in the mud. Many a lottery winner has become a tourist in their own lifestyle, unfriended by old, unaccepted by new.\[1] I’ve been inside the heads of people who appeared only a few steps removed from killing for wealth. And who possessed levels of wealth that others have certainly killed for. These heads are not always a pretty, nor even a satisfying, place to be. No one explained why this was better than a man who is also very wealthy, and who almost did kill himself. Philippe Pozzo di Borgo never really questioned the story of his wealth until he became paralysed. Being the subject of major international films, his outside story has been told well enough already. But it is the inside story, told in his book, in his conversation, and in the ineffable messages of his art collection, where the real value lies. For that is a story of how extreme wealth can act not as an enabler of life, but as a limiter of it. When it’s easy to do anything you like, it’s easy to do nothing like you. When Philippe’s paraglider crashed, so too did the story of his wealth that until then had been written and directed by ghosts, with little concern for the life of the leading man. Spectres of societal expectations and ancestral authority, writing scripts for what *is*, based on what they deemed *ought to be*. When he lost the freedom of his physical movement, and could no longer conduct himself so comfortably within the confines of his class, Philippe became freer to move and more comfortable within his mind. Just as in ethical philosophy ‘Hume’s Guillotine’\[ii] sought to sever claims about what objectively ‘ought’ to be based on what is, so in financial philosophy, we should seek to sever claims about how one ‘ought’ to live based on whatever financial circumstances one happens to find oneself in, and tie them instead to whoever one happens to be. For finances are the stage on which one expresses themselves, not the expression itself. ‘Nearly all human beings’, wrote Egon Friedell,\[iii] ‘are in the possession of the secret of how they ought to live, but the magnificent and unique invention that each one of them embodies is hardly ever realised.’ That money is not an aid to the expression of one’s life, but merely the circumstances in which that expression happens to take place, is a lesson as worthy of being learnt as it is so regularly not.\[2] This book exists because of the belief that if others could see what I have seen, they wouldn’t sacrifice so much for the sake of a booby-trapped illusion. This is something Proust well understood: ‘One way of solving the problem of existence, after all, is to become so closely acquainted with things and individuals we once saw from further away as being full of beauty and mystery, that we realize they are devoid of both.’\[iv] The ‘way of life’ characterised by sacrificing life for money is, of course, no life at all. Life is for living, not sacrificing. No one argues that humans need a sense of purpose. But purpose for what? A purpose for their resources, a direction to which to turn them that best fulfils that human’s potential. This is why it’s imperative to view money as one part of the human-resource whole – human capital and financial capital as the same source of potential. Your money needs purpose just as much as you do, because your money has meaning only when you see it as something you participate with, as a part of you and your relationship with the world. This goes beyond a trite trade-off between ‘working to live’ and ‘living to work’, or a myopic entreaty to ‘live in the moment’. It is also not about a saccharine replaying of messages such as ‘money can’t buy happiness’ or ‘the best things in life are free’. Because money *can* buy you happiness and everything costs something when you look at it, as you always should, through a wider lens than one that treats money in the immediate moment as the only resource. ## **Mo’ money, mo’ problems** ***Traditionally, wealth is defined not by worth, but by waste; for money to truly enrich your life, you must understand, and then shake, this belief*** It is a central theme of this book that most of what we think of as money problems are really mindset problems, and are therefore solved not by more money, but by better thinking. If the way you think about money is screwy, then your life will be too – and more money will only make you more screwed. As happiness researcher Professor Paul Dolan notes, ‘While poorer people have more intrusive thoughts about money than do wealthier people, the latter's happiness is more negatively influenced by those thoughts.’\[v] This is so important because the ‘more money is a panacea’ illusion is so pervasive. And it’s been ruining lives for centuries. Since forever, those that do acquire the ‘more’ they sought get lost wondering why it didn’t work; and those that don’t get lost in envying those that do, unaware of the fact it didn’t work for anyone else, or blinded by the belief that it *would* work for *them*. Hear, for example, Søren Kierkegaard: ‘A young man today would scarcely envy another his capacities or his skill or the love of a beautiful girl or his fame, no, but he would envy him his money. Give me money, the young man will say, and I will be all right \[…] he will die in the illusion that if he had had money, then he would have lived, then he certainly would have done something great.’\[vi] Or Montesquieu: ‘If one only wished to be happy, this could be easily accomplished; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are.’\[vii] No man is a hero to his valet. In the short-term, blaming mindset problems on a lack of money is the perfect means of eschewing responsibility for anything that isn’t working as well as we think it should be. If you can confidently state that your life would be great if only the system weren’t so unfairly stacked against you, then you can maintain the comforting belief that you are perfect. However, long-term, few beliefs are so pernicious. Because ‘more’ as a state is by definition unobtainable, your excuses (and associated experiential shortcomings) last forever. Moreover, making more money isn’t ultimately as easy, nor as inherently positive, as choosing a different way of seeing the world. And it comes at a much higher cost. It is precisely believing money is the limiting factor that stops people from living the sort of better lives they believe more money would enable. Financial planning can be an uplifting profession. But it can also be a depressing one. Watching people squander opportunities is never joyful. But watching millionaires do it is like watching a Messi or a Michelangelo swapping their talent for more time watching television. Just as we fail to consider the long-term consequences of running from responsibility, we also fail to consider what we’d do even if we procured the panacea pot of gold. So everyone ends up allocating their monetary resources in service of society’s identikit ‘oughts’ rather than in smoothing the paths towards fulfilling the potential of their unique ‘is’. This needn’t be simply buying symbols of excess. ‘From the behaviour of many rich people,’ wrote Nassim Taleb, ‘we can infer they live constantly terrorized that other rich people think that they are poorer than they actually are.’\[viii] Imagine sacrificing your time and energy to obtain cash you don’t know what to do with, and then doubling down the sacrifice by using that cash to try to ensure that other people think you’ve got it. And yet that sort of behaviour is so well-cherished that it can land you in the White House. In the traditional model of financial ‘success’, wealth is defined not, as it may first appear, by worth, but by waste.\[3] However, as Philippe’s story shows, the traditional way doesn’t always equal the right way. We may believe that ‘success’ in the sense that demands quotation marks in every country outside of America is a halo, but the evidence is clear: its bearers are not always angels.\[4] Much of what we refer to as ‘success’ requires inverted commas because we actually mean something else. Usually luck. And even then, unless we’re aware of the feelings of the allegedly lucky bugger, we probably want to qualify or caveat the label. ‘Success’ is not about crossing a finish line. It’s about how you feel when you do… and in the training before… and in whatever you do afterwards. We wouldn’t consider anyone to have lived a successful life if they sacrificed what truly made them feel alive to achieve something they weren’t all that bothered about and the accomplishment of which left them feeling flat forever more. Objective measures of success are as pointless as a miserable millionaire. Not that this story would ever make it to the big screen. As Douglas Adams reminds us, ‘Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so.’\[ix] We hide the cost of our wealth for fear we would appear less remarkable otherwise. We fail to learn from others, because we fail to teach others ourselves. In the words of La Bruyère: ‘We need not envy certain people their great wealth; they acquired it at a heavy cost, which would not suit us; they staked their rest, their health, their honour and their conscience to acquire it; the price is too high, and there is nothing to be gained by such a bargain.’ Fortunately, we need not sacrifice anything – let alone the use of our limbs – to learn this, and to live it. {% content-ref url="/pages/-MBStJn8FEw3NpqmAVam" %} [1.4.2: Is success for sale?](/the-book/1/1.4/1.4.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] I’ve worked with real-life lottery winners for whom this was unquestionably the case. \[2] One last reminder of the caveat: beyond a threshold lower than anyone lets themselves believe. \[3] For example, spending habits that show off not what we own, but what we’ve lost in order to own it, and substantial amounts of stuff that act as vain substitutes for substance of self. We’ll return to these ideas in [Part 2, Chapter 2](/the-book/2/2.2). \[4] Indeed, the only universal link between the traditional model and happiness (however defined) is that lawyers are basically always miserable. This is probably less because there’s anything particularly specially shitty about being a lawyer, but because they’re trained both to find fault and convert everything into money (their time, their clients’ damages, etc). Personal fit is a powerful determinant of finding meaning in one’s work, and one has to worry about anyone who’s personal fit is for a fault-finding arch-materialist. \--- \[i] H.L. Mencken, *A Mencken Chrestomathy* \[ii] David Hume, *A Treatise of Human Nature* \[iii] Egon Friedell, *A Cultural History of the Modern Age, vol. 3* \[iv] Marcel Proust, *In Search of Lost Time, vol. 2* \[v] Paul Dolan, *Happiness by Design* \[vi] Søren Kierkegaard, *Two Ages: The Age of Revolution and the Present Age. A Literary Review* \[vii] Charles de Montesquieu, quoted in *A Dictionary of Thoughts* (1891; edited by Tryon Edwards) \[viii] Nassim Nicholas Taleb, Facebook post 2nd July 2014 \[ix] Douglas Adams, *Last Chance to See* # 1.4.2: Is success for sale? ## **The difference between success and failure** ***The difference between success and failure is actually doing what you want to do (and most of the time you already know how to do it well enough to get started)*** Success may be subjective, but what makes the difference between success and failure is the same in every case. No one considers they’ve failed to achieve something they were never remotely interested in. And if you’ve an interest in achieving something, you probably know more or less how to do it, at least how to get started. Nor does anyone consider they’ve failed to achieve something they were genuinely incapable of achieving.\[1] Failure is therefore a result of not doing what one wants to do, is capable of doing, and to a decent-enough extent knows how to do. Success is actually doing it. Actually doing what one wants and knows how to do when one is well-rested, undistracted by addictions, and unburdened by fighting fires requires no effort. Conversely, taking the same action when the sunshine of intrinsic motivation is hidden behind the clouds of akrasia\[2] can require more effort than a mortal can muster. Working out how to take action anyway – cracking the code that unlocks all doors, and sets frees the fulfilment of one’s potential – is the central problem of most people’s existence. It’s not like we want for trying. Enough tired people have drawn more lines in more sand than a planet-sized Japanese Zen garden raked by gnats with fine-toothed gnat-sized combs. Success with money – with allocating our resources in successful service of our Good Life – is the same. Daily life is one long chain of resource allocations. Where it goes wrong – when we don’t do what we want to do – it looks less like a chain anchored to a guiding philosophy and more like a chaotic mess of broken links. The strength of a guidance-less link is nothing compared to that of the chain. In the face of attacks of *akrasia*, floating links get hijacked and hooked up to unhelpful habits, enslaving your resources to an unwanted end, and slaying your success in the process. Recall that every action is voting for one habitual way of being over another, whether you want it to or not. Better money decision-making is a combination of avoiding our addictions and supporting our wants. Not doing what doesn’t serve our Good Life, and doing what does. To recall our cognitive-science model, it is avoiding misunderstandings and fallacies (mistakes in problem formulation and solution reasoning) and taking right action. Avoiding mistakes – especially those that we’re subconsciously wired or overly tempted by our environments to make – is the first step to success in most realms. Money is no different. Therefore Part Two is about moulding our minds into mistake-dodging machines by examining the lens with which we look at money, and the language with which we talk about it. Parts Three and Four are about actively using this machinery to make better financial decisions. \* The same errors that mess up our view of the world also screw with how we see ourselves. Addictions both stop us achieving what we want and being clear about what it is we want in the first place. The process of understanding our wants is often depicted as a neverending journey down a yellow-brick road that reaches out into eternity. This is a misleading metaphor. Beyond a certain level of lived experience, while the journey is neverending, it is less a *lurching towards* down an ever-more *assured* path, and more a *spiralling around* on an ever-more *refined* one. We are too prone to think in ladders (property ladders, career ladders). Yet any idiot can climb a ladder. Non-idiots check it’s against the right wall. This is also why you shouldn’t set too much stall by specific directional tactics, as opposed to principles of discovery. Because even if a map works for who you are now, it may well not work for who you’ll be in a bit, and blindly following does nothing for training your compass-reading abilities. Despite the spiralling around, and the fact that you will likely know your Good Life when you feel it, this is not about gut instincts. Instincts can be infiltrated by ideologies that lead us away from insights, not towards them. As Alain de Botton wrote in *Status Anxiety*, ‘Our minds are susceptible to the influence of external voices telling us what we require to be satisfied, voices that may drown out the faint sounds emitted by our souls and can distract us from the careful, arduous task of correctly tracing our priorities.’\[i] To understand our wants is to understand ourselves. Understanding ourselves is understanding the story we tell ourselves about ourselves – our centre of narrative gravity. Fortunately, with the right philosophical self-care,\[3] you get to write the story to your spec. This makes the writing harder (which is why most people run from it) but everything else easier, and orders-of-magnitude more meaningful. Successful stories require knowing where you’re going, and (roughly) how to get there. And while there will be obstacles to be overcome, they are stepping stones, not derailing or unduly delaying distractions. Stories fail when we delegate their authorship (deliberately or otherwise), when we try to tell too many at once (thereby telling none with sufficient focus to make it worthy of being told at all), and when we forget that what makes a story is learning something important along the way (so if we start off thinking we already know the answer or otherwise never face the discomforting realisation of our ignorance, there is no story and ultimately no meaning to our existence… which sucks). If we want to live as well as possible, we need to challenge our worldviews, not assume that we’ve found the answer. A worldview\[4] that doesn’t stand up to challenge doesn’t become stronger if we simply choose not to challenge it. As Vervaeke et al wrote in *Zombies in Western Culture*, it is ‘necessary to have our sense of the world pulled periodically from underneath us. Insight emerges from the wreckage of this experience. It allows our perspective to reframe itself around a fuller appreciation of reality.'\[ii] Because of the central role of money in all our major and minor life decisions, the story of our relationship with money is intricately related to the story of ourselves. A successful relationship with money – using it to help you do what you actually want to do – is possible only when the story you tell yourself about yourself, your centre of narrative gravity, is conscious, clear and under your control. ## **The difference between anxiety and fear** ***We seek security in money, but security derived from money is impossible if it’s not founded on the sort of security that exists without it – from a firm centre of narrative gravity*** If you visit a half-decent financial adviser for the first time, you’ll likely be asked what it is about money that is important to you. And you’ll likely answer something to do with security and freedom. A little digging will likely reveal that ‘freedom’ in the sense you’re likely to have used it is in fact also about security.\[5] While it may take on some elaborate, if not excessive, expressions at the edges, our idea of money ‘success’ is centred on security. This is a shame, because money does a terrible job of providing security. To understand why, we need to understand what we think money is securing us from. We need to understand the root of our fears, or, more precisely, our anxieties. Anxiety is untethered fear. The fear of fear. The easy familiarity of the phrase ‘there is nothing to fear but fear itself’ has blunted an edge that cuts through to an important truth, that we’ve known since at least Epictetus (‘For it is not death or hardship that is a fearful thing, but the fear of death and hardship.’\[iii]). We can cope with fear. Fear has a defined object. An object allows us to focus, to formulate plans. It may take a while for a plan to take shape, and it may be crap when it does, but it saves us from the uncontrollable recirculating terror of a ruminatory whirlpool. As Paul Tillich explains, ‘Our anxiety puts frightening masks over all men and things. If we strip them of these masks their own countenance appears and the fear they produce disappears.’\[iv] Being eaten by a lion causes far less anguish than expecting to see one around every corner. It is not lack of money, but anxious predictions of its consequences that causes us chronic pain. In the words of Julian Jaynes, ‘Anxiety \[is] the knowledge of our fear. We see a bear, we run away in fear, and have anxiety. But anxiety as a rehearsal of our actual fear partially occasions the emergency response at least weakly.’\[v] Our brains are wonderful prediction machines, but the same ‘capacity for conscious imagery’ that makes helpful predictions also makes unhelpful ones. The same machinery that once saved us from being eaten now more often stops us from being appropriately relaxed. Money is a magnet for anxiety because just as it is a universal medium of exchange in goods and services, it is also a universal means of turning anxiety into fear. Worrying about something? Must be money. Need a plan? Get more money. Difficult? Maybe. Directionless? No. Sometimes this is a suitable response. More often, however, we’re suckered by the streetlight effect: in the position of the drunk who lost his keys in the park, but is looking for them in the street because it’s better lit. We fixate on money as a means of eradicating anxiety, but it doesn’t work. Because it cannot work. Anxiety belongs to existence. It cannot be eliminated, with money or anything else. As Tillich continues: > Immediately seen, anxiety is the painful feeling of not being able to deal with the threat of a special situation. But a more exact analysis shows that in the anxiety about any special situation anxiety about the human situation as such is implied. It is the anxiety of not being able to preserve one's own being which underlies every fear and is the frightening element in it. This may feel like a stretch in relationship to the failure of a new pair of shoes to alleviate an itch, let alone level-up our life, but it’s at the core of our screwy relationship with money. It is why what we think will work never does, and why it not working doesn’t stop us trying the same thing next time, with the confidence of General Melchett before another bold push over the top of the Somme’s trenches. When Thomas More prophesised in Utopia that ‘At the very moment when money disappeared, so would fear, anxiety, worry, toil and sleepless nights’,\[vi] he was of course pushing polemical boundaries, but he had a point. \* If we can’t do anything about the roots of our worrisome financial weeds, and if spending a ton of time and money on ineffective weedkillers feels like a shitty solution for our security issues, what should we do? If you can’t kill it, be cool with it. Anxiety asks for courage. Courage comes from character. Specifically the character that’s the star of our centre of narrative gravity. The strength of our narrative gravity is a far more reliable source of our sought-for security. And courage in this case comes from consistency. External financial security is a poor substitute for the internal security that comes from knowing what your Good Life looks like and using your resources consistently in support of it. It’s the internal security we’re after anyway, and while we may have been led to believe the direct route is harder, or impossible, this just isn’t true. It’s the only way that works. Our need for a consistent narrative has two sides: the need to feel as though there is actually a meaningful thread woven through our enigma of existence, and the need to actually follow this thread, to live a life that feels meaningful. ‘Human beings have a very strong desire to have reasons for what they do and find indeterminacy hard to accept’\[vii] wrote social and political theorist Jon Elster. So strong, in fact, according to neuropsychologist Professor Nicholas Humphrey, that ‘People’s overriding need to maintain a consistent narrative can trump the memory of what has actually occurred.’\[viii] These roots reach deep. As psychoanalytic psychotherapist Sue Gerhardt explains: ‘When adults talked about their emotional lives and their important relationships in growing up, it didn't matter whether they had a “happy childhood” or not. Their current emotional security depended much more on having an internally coherent and consistent narrative than on the actual story they had to tell.’\[ix] At first glance, Gerhardt’s discussion of the translation of feelings into words in a way that makes a human feel like ‘a coherent whole’ may look like it has no place in a book about money. But that’s precisely part of the problem. When we forget or ignore that money is one of the most emotional topics there is, that every one of our purchase decisions is an attempt to obtain an underlying emotional reward,\[6] when we try to repress the very real emotions that money inspires, rather than put them into language and integrate them into the grand decision-making edifice of our lives, we end up in a massive money mess. ## **The difference between accumulation and alignment** ***Know thyself and live in accordance with that knowledge is – and always has been – the universal motto of a successful life*** The starkest lesson from my time inside rich people’s heads – and something we’ll revisit consistently throughout this book – is that while living well isn’t correlated with the amount of one’s resources, it is correlated with how one uses them: aligning one’s actions with one’s preferred story of one’s self, aligning one’s string of isolated experiences with one’s vision of who one really is, one’s centre of narrative gravity. ‘It is not truth that rules the world, but illusions’, wrote Kierkegaard\[x]. All success is subjective: stay true to your preferred illusion. As Lynne Twist wrote in *The Soul of Money*: > When people were able to align their money with their deepest, most soulful interests and commitments, their relationship with money became a place where profound and lasting transformation could occur. \[…] When you let your money move to things you care about, your life lights up. That's really what money is for.\[xi] And as Matthieu Ricard pointed out, what unifies the various ways we experience some form of lasting, meaningful ‘happiness’, is a ‘momentary disappearance of inner conflicts’\[xii] leading to feeling in harmony with the world and with oneself. When Jiddu Krishnamurti wrote ‘Real life is doing something which you love to do with your whole being so that there is no inner contradiction, no war between what you are doing and what you think you should do. Life is then a completely integrated process in which there is tremendous joy,’\[xiii] he could easily have been writing about our relationship with money. For what better signal is there about how well what we do is aligned with what we want to do? This is a two-way relationship, rooted in participatory knowing. You learn what you are by doing, and you mould who you are by those same actions… assuming you’re paying attention. The roads of what we are moulding – the behaviours we are changing, the habits we are forming, the character we are cultivating – all lead back to the brain. As Will Storr wrote in *The Science of Storytellin*g, ‘ “We” are our neural models. Our narrator is just observing what's happening in the controlled hallucination in our skulls – including our own behaviour – and explaining it. It's tying all the events together into a coherent tale that tells us who we are, why we're doing what we're doing and feeling what we're feeling.’\[xiv] Anxiety arises when these stories go awry. When we’re living in alignment with someone else’s story, or when we let someone else – or some*thing* else – write our story for us. We do this all-too-often. Unwittingly, perhaps, but outside of genuine cases of oppression, always willingly. We sometimes even pay for it.\[7] \* Because anxiety is inextricably linked to our existence, it cannot be eliminated. But its more pernicious effects can be overcome. Money worries can be kept in check. Listen to advice, but do not blindly follow it. This is done not by padding the pain with more money, but by strengthening the philosophical immune system – the centre of narrative gravity, the story of our ‘self’. ‘Our fundamental tactic of self-protection, self-control, and self-definition,’ wrote Daniel Dennett, ‘is not spinning webs or building dams, but telling stories, and more particularly concocting and controlling the story we tell others – and ourselves – about who we are.’\[xv] We saw earlier the protective shell-like function of this story. When we talk of strengthening it, the immediate temptation is to thicken the shell. However, it is not a fatter fortress we want, but a more flexible one. We see fortresses and spring into a story about strength. To do so is to forget that the fortress’s strength was an adaptation to its environment, and it is the adaptation – the fittedness to its environment – not the thickness of its walls, on which we should focus. When threats change, thick walls are not easy to change with them; the signs of domination can become the seeds of decay. The perfect shield against medieval weaponry becomes the perfect screen for being blind to opportunities. {% content-ref url="/pages/-MBStJzVys\_cntx1J7my" %} [1.4.3: Editing your life story](/the-book/1/1.4/1.4.3) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] For real reasons, of course. Like missing a prerequisite limb, or being born after the role you wanted to play has died. Most excuses may get passed off as real reasons, but popularity is not an antidote for bullshit. It's telling, I think, how deep down we're all motivated by a desire to see potential fulfilled. No one criticises a child for being an idiot or a cripple for not playing for Barcelona. Equally, no one gets defensive in reaction to a total lie – it's only when we feel a visceral reaction to being called out on how we should or could be living differently. We need to listen to these cues, not shy from them. \[2] Recall from earlier that *akrasia* is ‘the unhelpful force that prevents us from doing what we deep down want to do, know well enough how to do, know we ought to do, but for some reason don’t do. It’s our procrastination, our misprioritisation, and our falling prey to distraction all in one.’ \[3] Look out for the concept of *epimeleia heautou* in the following section. \[4] In the sense described by Brian Walsh (quoted in Vervaeke et al *Zombies in Western Culture*), a worldview is not about ‘ideas’ that are held but about ‘worlds’ that are inhabited. Recall the primacy of [participatory knowing](/the-book/1/1.3/1.3.2#4-participatory-knowing). \[5] We’ll revisit this throughout, including a more helpful notion of freedom in chapter \[TBC]. \[6] Something we’ll explore further in chapter \[TBC]. \[7] We’ll return to this in [Part 3](/the-book/3). \--- \[i] Alain de Botton, *Status Anxiety* \[ii] John Vervaeke, Christopher Mastropietro, and Filip Miscevi, *Zombies in Western Culture: A Twenty-First Century Crisis* \[iii] Epictetus, quoted in Paul Tillich, *The Courage to Be* \[iv] Paul Tillich, *The Courage to Be* \[v] Julian Jaynes, *The Origin of Consciousness in the Breakdown of the Bicameral Mind* \[vi] Thomas More, *Utopia* \[vii] Jon Elster, *Nuts and Bolts for the Social Sciences* \[viii] Nicolas Humphrey, answering the Edge.org annual question in 2017 (‘[What Scientific Term or Concept Ought to be More Widely Known?](https://www.edge.org/annual-question/what-scientific-term-or%C2%A0concept-ought-to-be-more-widely-known)’) \[ix] Sue Gerhardt, *Why Love Matters* \[x] Søren Kierkegaard, *The Point of View*, quoted in Walter Kaufman, *Existentialism* \[xi] Lynne Twist, *The Soul of Money* \[xii] Matthieu Ricard, *Happiness* \[xiii] Jiddu Krishnamurti, *Think on These Things* \[xiv] Will Storr, *The Science of Storytelling* \[xv] Daniel Dennett, *Consciousness Explained* # 1.4.3: Editing your life story ## **What makes a good editor?** ***Using your resources to reinforce your best life story is hard, so it makes sense to get help; be sure to know what you’re looking for, because good help is harder to find than a well-meaning mirage*** Finding yourself on the right sides of the divides between success and failure, courage and anxiety, and alignment and accumulation all rely on the story you tell yourself about yourself, specifically your participatory relationship with money in the service of your Good Life. Expecting this story to perfectly mould itself into magnificence is madness – not least because if you’re capable of magnificence, you’re also capable of many tempting-but-distracting varieties of almost-magnificence. When it comes to writing your story, you need a good editor. Unfortunately, good editors are hard to find. In the narrative of a life, like the narrative of a novel, script and structure are different skills. One is playing, the other coaching. One is writing, the other editing. And just as even the best players use coaches, even the best lives could use an editor. These roles can exist within the same person, and to a certain extent when the subject is shaped by your almost incessant interactions with money, they have to. And at least learning how to be a good editor is vital to making the most of your introspective endeavours. But the eyes of external editors can see things introspection alone cannot. The editorship of your life story is where the centre-of-narrative-gravity model meets the difference between success and failure of the previous section. A good editor helps you more effectively tell the story of the life you want to lead, know how to lead, but for some reason aren’t leading. A bad editor pollutes your process with their own projections, tilting the tone of your tale towards their truth, doing nothing to bring clarity to your own. Good editors help authors tell their (single) story without getting side-tracked by subplots. Supplementary stories usually feel important to those whose identity they are supporting, and they’re often beautifully written, but they ultimately dilute and distract from the one tale their author really wants to tell, the core potential they want to fulfil.\[1] Good editors reveal, bad ones rewrite. Good editors cut what doesn’t contribute to the core. Bad editors cut what they don’t like the look of and add on what they do. Resisting the urge to be a surrogate script-writer rather than a sculptor, and having the ability to do it, is a rare skill. Like resisting the urge to slack off rather than do what you want to do even when in the moment you don’t want to do it. Good editors make a story truly yours, bad ones make it theirs. Great writers can be troubled storytellers; they risk becoming a Christmas tree burdened by excessive baubles. Each one may be small and beautiful, but the beauty of the whole is lost in the weighty twinkling chaos. The optimum amount of anything is never everything. It’s the gaps between the notes that make the music. Just as majestically minded people still benefit from therapy, everyone can benefit from an editing stress test of their life story. Your story may already be superb… but there’s no harm in testing it. The same script told with a new confidence is still a better story. The point is not to tell you what to do, but to tell you to stop and think through what you are doing – or about to be doing. If you then do the same thing anyway, and assuming that thing isn’t as time-sensitive as escaping from an alligator, the thinking it through is a good idea. A recurring theme of this book is that I’m not here to suggest specifics about what to spend your money on, or what to invest it in, or even what to think about it. This is instead a framework for how to think about money so that it easily and effortlessly plays a positive role in your life, rather than one defined by anxiety, scarcity, and other unhelpful associations. These are the qualities you should seek in an adviser, if you decide to hire one.\[2] Get that right, and the specifics should fall into place as side-effects.\[3] ## **When does more money lead to less quality of life?** ***The ability to do everything is a barrier to doing the right thing, not an enabler of it*** Good editors are so valuable because the hardest task for any writer is not writing, but discarding. Once written, it’s harder to imagine a world without those words, even if the point (or effect for more poetic writing) was made just as well without them. The same problem is a big part of how we get so screwed up with money. Because we believe money has an objective value, it’s easy to think there can be no limit to the value of its accumulation. Yet this forgets that both the act of accumulating and the act of hoarding come with unseen and often incalculable costs. The fact is, there is no objectively ‘correct’ path to pursue. Don’t waste energy looking for it, and definitely don’t waste money on those who advise you that there is, and whose job is ‘finding’ it for you. This is tricky to internalise with respect to money. Money is seen as a cold, heartless, universal medium of exchange. Which it is, in isolation. But in the context of your life, which is the only interaction you ever have with it, it’s never in isolation; it’s an amplifier of emotions, not an eradicator of them. As two Professors of Psychology explain: ‘It is difficult to use money properly, particularly if you are unfamiliar with it’\[i] and ‘Thinking about money the right way is one of the most challenging things for human nature.’\[ii] Money can make it feel like no editorship is needed. If in doubt, opt for ‘more’ and the story will sort itself out along the way.\[4] As if unworn clothes maketh the man and unused private tennis courts maketh a better life than enjoying the company of a local club. Resources used for the insecurity-laden insurance of ‘more’ can also be used for a meaning-laden ‘something’. The opportunity to do anything is injudiciously transfigured into the enticement to do everything… which leads to unconsciously doing nothing meaningful, save by accident. This links to the importance of fulfilling one's potential. Extremely high potential in one area usually means very high potential in plenty of others. When it's possible to be great at something, it's all too easy to be good enough at lots of things. But effort expended on the good enough is effort not expended on the great. And it is the uniquely great on which we judge ourselves (and others). It doesn't matter if the root of this responsibility is money, intellect, or a specific skill. If you're capable, you're culpable. The ability to do everything is always a barrier to doing the right thing. The right thing is usually about prevention rather than cure, and prevention requires action that only being in need of a cure creates, so we don’t move until it’s too late. Recalling that this is ultimately a book about behaviour change, this is unhelpful. From forbidden fruit to bottled-up bereavement, the backfiring effect of enforced repression replicates well.\[5] Warnings against unthinking accumulations of more should not be read as directives for how – or how not – to spend money. This isn’t about being inflexibly frugal any more than it’s about being obstinately ostentatious. I believe, with the Messenger in Sophocles’ Antigone, that ‘when a man has squandered his true joys, he's good as dead, I tell you, a living corpse.’\[iii] It is the unthinking we must avoid. Theoretically at least, if spending millions on the multi-year construction of an underground lair is the conclusion of a thorough examination of the best use of such resources, then go forth and build your lair, the enjoyment of doing so inevitably strengthened by having considered the opportunity costs and concluded they were worth paying. This applies not only to the extremes, but also to everything in between. For want of knowing what we want, each of us yo-yos within ourselves. More one minute, abstinence the next. This is why we need a grounding philosophy: to know where enough lies and to regulate our lives *around* that. To see ranges rather than spuriously precise targets that, once missed, flick us into fuck-it-all mode, thinking that we were on a tightrope, and that all ways of falling off are equal. But we’re not on a tightrope, we’re on a concentrically spiralling journey. Responding to heading slightly off course by flooring the accelerator is just silly. ## **Look at yourself to look after yourself** ***To practise is to be constantly ‘failing’ but to see it as an act of self-care, not self-criticism*** Hiring an editor is not the same as buying a solution. An editor is a guide, not the seller of a map. A coach to structure your practice, not to excuse the need for it. Because your relationship with money is a process, not a product, it is always a practice, not a performance. Viewed as a series of snapshots, it is a process of constant ‘failure’. From a more lifelike vantage point, it is a glorious self-developing refinement. In this respect it is exactly like meditation, where each ‘failure’ of attention is a precursor to its ‘successful’ return, in a practice with the potential to powerfully transform who you are. Seen in the context of your relationship with yourself, this sort of ‘failure’ is about caring, not criticism. Your dialogue with your editor (be they external or internal) must embrace the ‘failures’ of your practice for how they refine your world, not obsess over ‘failing’ to reach an impossible end goal. Plato didn’t write dialogues because he was a frustrated playwright. He wanted us to practice using precise language and patterns of thinking in a profoundly practical context.\[6] Recall the purpose of phronēsis – of practical wisdom – this is philosophy as a tool for shaping the Good Life. Life becomes better by thinking things through to right action, which, as proven by everyone’s inability to do it automatically, needs practice. This is philosophy as ‘care of the self’.\[7] This is where practical philosophy meets warm and fuzzy feelings. The philosophy of right action, as determined by the very simple test of whether it actually makes your life better or not.\[8] Such therapeutic philosophy cannot exist only in theoretical, or narrowly numerical worlds. All advice on living the Good Life is necessarily at least a little bit spiritual. This terrifies most providers of financial advice, which is why most financial advice skips the practical implications of what it’s all about and whether it actually works. However, working in service of the money, rather than the owner of the money (i.e. you) is as helpful as knowing how to predict the winning lottery numbers from a machine that’s never used. It doesn’t matter how clever the model, nor how big the potential payout if it’s a practical impossibility. Philosophy can be frightening to the would-be receivers of advice, too. Or if not frightening, then irrelevant; a misguided attempt to reduce a life full of love and madness to a logic puzzle. Yet it shouldn’t be. The philosophy we’re discussing is the inescapably practical wisdom of thinking through how to live as well as possible. Philosophy may mean, in the words of William James, ‘nothing but an unusually obstinate effort to think clearly’,\[iv] but the Good Life towards which it aims, is, to borrow from Bertrand Russell, ‘the one inspired by love and guided by knowledge.’\[v] \[9] ## **Good rules v bad rules** ***Self-care relies on understanding when to follow rules, and when to write them*** Because we’re so delightfully flighty and contain complex multitudes, caring for ourselves requires rules to keep any one of those multitudes from getting ideas above its station and ruining things for the whole. Everyone knows this, of course, which is why everyone makes rules for themselves all the time. The ubiquity of these rules (and their rewrites) is also an indication that they don’t always work terribly well. What distinguishes a good rule from a bad one is difficult, because to a large extent what makes a rule work is also what makes it fail. Barry Schwartz, who’s studied the effectiveness of rules more than possibly anybody else, warns us that a bad rule can be worse than no rule at all. ‘What I think is true is that rules and incentives kill wisdom.’\[vi] Rules can however also kill the weeds that suffocate wisdom. We need wise rules. We want to cultivate practical wisdom. Rules are practical. But they’re not wise if all they do is shuffle the chairs on our unthinking sinking ship. Rules rank reactiveness over reasoning. This is why they work but also why they go wrong. We don’t always have the time or the energy to reason through every decision. And often the ‘we’ that is making the in-the-moment judgment is not the ‘we’ we want to be doing so. Wise rules recognise this. Wise rules are built when powers of reasoning and will are at their peaks precisely for situations when they are likely to be absent. Relying on decision-making machinery to function at its best when the energy that fuels it is at its lowest doesn’t stop being dumb just because everyone else is doing it. The best of both worlds is a reasoned rule-making process that’s trusted, but verified, such as that set out in the next chapter, which places rules between principles and triggers. Principles provide zoomed-out perspective and triggers provide zoomed-in just-in-time reminders. Simple rules make great conclusions, but terrible starting points. Principles verify if rules are actually working – if the actions they guide still look wise when we zoom out. Are we atop a real peak, or a false one?\[10] Triggers remind us of our rules. Despite their in-your-face, in-the-moment *modus operandi*, triggers are about slowing down and about turning on the lights, not getting more comfortable in the dark. As Schwartz explains, ‘you need rules, but I think rules are like a road map that gets you to the right city but not the right street \[…] throwing out rules, that's a nightmare, that's a disaster. But this notion that you have to slavishly follow rules is also a disaster.’\[vii] Editors operate on rules; good editors operate on wise ones. Ones that bring clarity to your story and check that the plot is actually contributing to the telling of the main story. This is an iterative process; feedback is key. Pull a plot string in one place and it’s going to have consequences. Fortunately, money decisions are a ‘kind’ (as opposed to a ‘wicked’) learning environment. One that lends itself to feedback-inspired course corrections.\[viii] In a kind learning environment, patterns – and challenges – repeat. This means using pattern recognition to overcome challenges (in this context statements with reliable and transferable applicability, i.e. rules) works. Feedback is fast and accurate. Consequences are quickly apparent (assuming one is looking for them). In a wicked learning environment, the opposite is true. Rules are unclear, patterns are illusory or non-existent, feedback is delayed and inaccurate. A major trouble of finance is that we think the randomness at a macro level is reflected in an inability to control anything at a micro level. This book aims to show that this is not true. ## **Self-help v off-the-shelf help** ***Traditional sources of help choose to not challenge unthinking and to perpetuate myths as a means of short-term comfort, at the expense of longer-term quality of living*** I have a fundamental disagreement with the investment industry. I think hiring a guide dog when you’re not blind, only misinformed, is a silly thing to do. The investment industry wants you to believe that it’s actually awfully sensible. Anyone who remembers the Simpsons episode where Mr Burns tried to block out the sun so he could sell nuclear-powered illumination understands the motivation. Despite being in the position to act as editors of life stories, most financial advisors forego the opportunity. They play by a set of rules, but they’re bad ones – beset by the misunderstandings and fallacies that hinder our attempts at solving problems. Their model is not one that appreciates the participatory nature of an individual’s relationship with money, favouring instead to protect the status quo of supposedly objective status games. In many areas of life, from elaborate storage systems for our stuff to our consumption of the news, we all waste resources tidying up what is better just ignored or discarded. It doesn’t matter how well organised your troops are if you’re fighting a battle that shouldn’t be fought. The advisory industry well understands how discomforting darkness can be. Especially if you can’t find the light switch. Or know that one exists. But give a human time and it’s good at creating comfort. We create comfort by creating certainty, or at least the appearance of it. That could be panic-selling an investment or attaching an aimless anxiety to a face we can fear, even if it’s made up. An evil overlord is an antidote to the anxiety of chaos. Demonic delusions should not be dismissed out of hand. The succour they provide is as real as the suffering they alleviate. Religions would be an awful lot less enduring otherwise. The advisory industry knows we get a kick from watching straw men burn, so rather than telling us to walk away, it sells us a lighter. This is unfortunate, for it directs resources to sustaining the system rather than reforming it. The status quo can be a source of short-term comfort even when it’s not in the long-term interests of the people paying for it. We seek an enlightening, emotionally rewarding relationship with money, but we stop looking when we find reassurance with staying in the shadows. If you’re looking for status-quo preservation, it’s easy to find. Any adviser will do, so feel free to put down this book and let Google take it from here. This book is different. I want to inspire not increased comfort with unthinking, but a much deeper and more meaningful comfort from thinking, from taking back the authorship of your centre of narrative gravity. And at the same time to encourage help that’s actually helpful. ‘There are people who are attracted by the durability of stone,’ wrote Sartre, ‘since they are afraid of reasoning, they want to adopt a mode of life in which reasoning and research play but a subordinate role, in which one never seeks but that which one has already found, in which one never becomes other than what one already was.’\[ix] In the previous section, I noted that the importance of money to most people was initially expressed as something to do with ‘security and freedom’ (with ‘freedom’ meant in a security-centric sense). Because so many advisers got into financial advice due to an obsession with money that stops them knowing it beyond a propositional and procedural way, after eliciting that security is what the people want, they go about getting it with money, rather than with better direction of the role that money plays within a life. Morgan Housel provides an example: > I’m surprised how many good investors I know with terrible personal finance habits. Maybe I shouldn’t – they are completely different skills. The ability to uncover an undervalued investment is not associated with your propensity to avoid lifestyle bloat. The irony is that people who will move mountains to gain a few basis points of return bleed ten times that amount on personal spending that all science says adds little to their net life happiness.\[x] ‘The security of the neurotic is unrealistic,’ wrote Tillich. ‘He fears what is not to be feared and he feels to be safe what is not safe.’\[xi] In the words of Richard Lovelace: > Stone walls do not a prison make,\ > Nor iron bars a cage;\ > Minds innocent and quiet take\ > That for a hermitage;\ > If I have my freedom in my love\ > And in my soul am free,\ > Angels alone, that soar above,\ > Enjoy such liberty.\[xii] What we want is security and freedom from thinking, not the lack of it. We’ve seen above that such strength comes from paying attention to the right things, while not obsessing about them, or being blinkered by them – being ‘mindful’. ‘If we only care about the breadth of information, and not the depth,’ wrote David Cain, ‘there’s not much distinction between “staying informed” and staying misinformed.’\[xiii] What that means in the context of money is the subject of the next section. {% content-ref url="/pages/-MBStIvx0uShrYMTkypc" %} [1.4.4: From having a mind full of money to being mindful with money](/the-book/1/1.4/1.4.4) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Telling one story is not the same as focusing on one component of your life to the detriment of that life as a whole (think of the CEO that forgets they have a family). This is about your life’s work, not your work life. It’s about not misallocating resources to stuff you can merely do well and away from stuff that only you can do. Focus not on what you can do, but on what you can’t *not* do. \[2] [Part 4](/the-book/4) is all about how to hire help that’s actually helpful. \[3] Recall how where other investment books go awry is by starting from the organisation of your money, rather than the organisation of your mind, even though it’s perfectly possible to invest ‘perfectly’ and for money to still play a net negative role in your well-being. Owning better investments is not an automatic route to a flourishing, flowing, life. \[4] The monstrous demon of ‘more’ is the subject of [Part 2, Section 2.2](/the-book/2/2.2/2.2.2). \[5] See, for instance, the examples in Oliver Burkeman, *The Antidote*. \[6] Plato was also as keen a trainer of his body as his mind. Plato was wise. Be more Plato (in process, if not perhaps in all philosophical specifics). \[7] In the sense embodied in the Ancient Greek concept of *epimeleia heautou*. \[8] See Principle #4: Does it work? \[9] See also Karl Jaspers, in slightly less user-friendly terms, ‘The purpose and therefore the meaning of a philosophical idea is not the cognition of an object, but rather an alteration of our consciousness of Being and of our inner attitude toward things.’ \[10] We’ll return to real and false peaks (global and local maxima in psycho-speak) in [Part 2, Section 2.1.1](/the-book/2/2.2/2.2.1/2.2.1.1). \--- \[i] Jordan B. Peterson, *12 Rules for Life: An Antidote to Chaos* \[ii] Dan Ariely, at a talk in London to promote *Small Change: Money Mishaps and How To Avoid Them* \[iii] Sophocles, *Antigone* \[iv] William James, *The Principles of Psychology, vol. 1* \[v] Bertrand Russell, *What I Believe* \[vi] Barry Schwartz, [*TED Radio Hour*](https://www.npr.org/transcripts/153235680) \[vii] Barry Schwartz, [*TED Radio Hour*](https://www.npr.org/transcripts/153235680) \[viii] Terminology borrowed from David Epstein’s *Range* \[ix] Jean-Paul Sartre, *Portrait of the Antisemite* (abridged version of *Réflexions sur la question Juive*, quoted in Walter Kaufman, *Existentialism*) \[x] Morgan Housel, [*Inseparable Pairs*](https://www.collaborativefund.com/blog/inseparable-pairs/) \[xi] Paul Tillich, *The Courage to Be* \[xii] Richard Lovelace, *To Althea, from Prison* \[xiii] David Cain, [Raptitude.com](http://www.raptitude.com/2016/12/five-things-you-notice-when-you-quit-the-news) # 1.4.4: From having a mind full of money to being mindful with money ## **How does money fit into meditation?** ***Being mindful with money means paying attention to the right things; you do this by focusing on some other process*** To recap, in the course of turning our resources into a Good Life, we are performing brain surgery – wiring our brains in such a way that we make better financial decisions, and so that money plays a positive role in our lives, rather than being a source of anxiety or confusion. We do this with the aim of making the right action the default action, so that we need never again need to feel as if we are in a fight with our feelings or our finances. This is a meditative process. A process of deconstructing unhelpful narrative experiences into sensory ones and subjective views into objective ones, before building back up a more conscious and enlightened whole. As the meditator translates their river of thoughts into the coming and going of bodily sensations, so must we see the stories that subconsciously determine who we are as mere transitory drafts, ready for refinement. You inescapably *are* a narrative; you can consciously choose to be its author. We rewire our brains by taking conscious control of the story we tell ourselves and the world about who we are, by shaping our centre of narrative gravity with our thoughtful virtues, rather than letting it be an unthinking slave to other’s vices. We take this conscious control by paying attention in the right way to the right things, by being aware of the building blocks of our stories – our internal and external language – by knowing ourselves, and our environments and the ongoing means by which they interact and influence each other. Our relationship with money is shaped with our purchases, our words and our thoughts. There is no standing still. No chance to wait and deal with it when we’re more ready. Our brain doesn’t stop sucking in inputs from the world, and spinning them into a protective, predictive web of stories to conjure a ‘self’, to determine its place in the world, and how to navigate its way around. Amid this incessant dance between environment and response, we can choose to ascend towards real-life monetary enlightenment, or down into a cave of complexity and shadowy illusions. Almost everyone chooses the cave. We are not biologically blind, but without a guide to light the way, and without sufficient courage to face the fears that block us, we are psychologically so. We want strength, so we seek security. Stumbling around in the shadows, hands grasping at anything we can touch, we think we find it, forgetting that if we can touch it, it is not strength, for strength comes from within. It is a crutch. It delays the search, it doesn’t end it. We know this, because our anxieties are veiled, not abated: external sources of ‘security’ do not destroy the insecurities that summon them, they only shroud them.\[1] We are the ‘cowards’, who ‘die many times before their deaths’, while longing instead to be ‘the valiant’ who ‘never taste of death but once.’\[i] A fear once faced and taken into ourselves soon fizzles out, but anxiety is fertilised by ignorance. Courage does not try to hide insecurities. It does not shield its eyes. It opens them. It awakens to reality and does something about it. This process of awakening is what we’ve come to know as mindfulness. \* The process of mindfulness is notoriously much trickier to describe than its benefits, despite knowing about both for centuries – even in the West. Hear William James, for example: ‘The faculty of voluntarily bringing back a wandering attention over and over again, is the very root of judgment, character, and will \[…] But it is easier to define this ideal than to give practical instructions for bringing it about.’\[ii] We know it’s got something to do with paying attention, but as with our brain surgery, there are right and wrong ways to pay attention. The one we choose is the self we choose to be. ‘Never forget this,’ wrote advertising guru Rory Sutherland, ‘the nature of our attention affects the nature of our experience.’\[iii] A common error is to think of attention in terms of a spotlight. However, mindfulness and brain surgery are less the concentrated snapshot of a spotlight and more a process of continually renewing your interest, and refreshing your intention. It is a tuning in not a concentration on. It is a practice of paying attention to how you’re paying attention. It is the difference between listening and hearing. This is important, because you cannot ‘practise’ paying attention directly. You focus on your breath, and indirectly practise paying attention. As John Vervaeke explains, ‘You pay attention by optimising some other process.’\[iv] You do not will attention, you flow into it, and with it. You do not control the spotlight because you pay attention to it; you control it because you really want to see what’s going on somewhere (and before you know it you've been paying attention for ages). Crucially, mindfulness is an active process, not a passive state, as the Buddhist text, Theragatha describes: > If your mind runs loose\ > after sensual pleasures\ > and states of becoming,\ > quickly restrain it with mindfulness\ > as you would a bad ox\ > eating grain.\[v] Mindfulness is a purposeful act, in a way that attention need not be. The other important aspect of mindfulness the above passage demonstrates is that mindfulness is a kind of remembering.\[2] Again, this is an active, purposeful process, not a snapshot recall of a fact. You’re remembering reality. You’re remembering what’s important. You’re remembering perspective. You’re remembering who you want to become. It needn’t take a natural disaster for us to remember what really matters to us. Mindfulness in this sense is calling to mind the right things at the right time, which is the core of all effective behaviour change techniques. ## **A time for theory, and a time for therapy** ***Insights appear when we free an event from the meaning we attach to it, which we do by foregrounding and backgrounding different aspects of our attention, not turning them on and off*** The ‘remembering’ sense of mindfulness is at the heart of cognitive therapies used to treat the feelings of flatness or anxiety that keep us stuck from becoming who we want to be. Remembering perspective and how you interact with your circumstances – what is instrumental to your life, and what is merely incidental – is central to breaking up the treacherous marriage of an event and the meaning we attach to it. We cling to the world (or rather our beliefs about it) in an explosion of unhelpful ways, especially when it comes to money. For example, money ‘success’ is an event. You give it meaning in the context of the story you tell yourself about who you are and your place in the world. You can choose to see billionaires as heroic winners or exploitative evil shits, and in both cases you are playing the same game – attaching a meaning that money is the fundamental object of judgment, with all the knock-on consequences on your own feelings about your money and your life that come with that. The deconstruction of mental narratives into bodily sensations is key to this process of defusing. Successful therapy often requires backgrounding (but not shutting off) our thinking, and foregrounding those inputs into our sense-making machinery that speak in senses not sentences. Active thoughtful theorising is essential for planning, but it needs help when it comes to knowing what to care about planning *for*. We go awry when we lose this balance. Insight flashes forth from the mutually supportive interplay of opponent positions, not from tribal warfare, be it between thinking and feeling or actual political tribes. Because our motivation to form beliefs and take action, to ward off our existential anxiety, runs so far ahead of our understanding, and because ‘our conclusions run ahead of our power to analyse their grounds’\[vi] we end up fusing events with the meaning we attach to them. Removing that attachment then becomes literally as painful as removing something to which we are physically attached. Which is why so many people spend so long looking like absolute idiots, frantically defending their foolishness with incoherent and inconsistent impromptu narratives rather than saying ‘oops, I may have been mistaken there’. Oscillating between a zoomed-out vision of the world and introspection is how we become more insightful. Everything else is just rearranging our prejudices.\[3] Divorcing money events from money meanings makes it possible to face our money anxieties and combat them with courage, rather than falling into the trap of thinking ignoring them makes them go away. We cannot weaken worries, but we can strengthen ourselves. The strength of mindfulness comes from its non-reactiveness. It is a proactive, purposeful acceptance. This is the base for good decision-making of all kinds. And of course money plays a role in just about every decision we make. Being good with money leads to becoming a good being with money. ## **Thinking, not-thinking, and unthinking: the difficulty of making things easy** ***Unthinking is valueless, and dangerously easy. Thinking and not-thinking are both valuable, and hard, but quickly get better with practice*** Strengthening your decision-making abilities with the purposeful observant inaction of mindfulness demands two core skills: thinking and not-thinking. Yet we turn away from them like a fat man from a salad, substituting for both the sugary disaster of unthinking. Thinking and not-thinking are both means of seeing more clearly. Unthinking is blind. Thinking and not-thinking are complements: part of the ability to think things through is the ability to be comfortable with not-thinking. Not-thinking is a conscious ability to simply be, without any sort of cognitive processing – helpful or unhelpful – as in meditation. Unthinking is the opposite. Unthinking is what we let fill our minds when, scared of being ourselves, we fire our mental doormen, and go hide in a corner, handing over the reins of our worlds to whoever most wants to get their hands on them. ‘Uncertainty, in the presence of vivid hopes and fears,’ wrote Bertrand Russell, ‘is painful, but must be endured if we wish to live without the support of comforting fairy tales.’\[vii] Repeat it often enough and unthinkingly delegating decision-making to whatever comes to hand leaves you with an addiction just as strong and just as dangerous as someone who will do anything for a drug fix or who can’t stop their hand from reaching for their phone at every idle moment. The more we default to unthinking, the harder it becomes to see the light. And nothing inspires unthinking quite like money. As we saw earlier, the plastic capacity of a brain – its ability to change its wiring in response to changes in its environment – does not fade with age, but with choice. This is unlikely to be an active choice any more than muscle atrophy is an active choice of the person who chooses not to be active. But that doesn’t mean it isn’t real. Passive choices are all the more pernicious because they are side-effects, not in-your-face effects, be it the smoker choosing cancer, the sitter choosing weakness, or the non-examiner of life choosing not their Good Life, but someone else’s irrelevant illusion of it. By the time the damage is visible, it’s probably irreversible. ‘Much of what we do simply comes about, rather than being thought about,’ wrote Paul Dolan. ‘Whether or not you buy that big bar of chocolate depends largely on whether it is on display at the till and much less on any real, conscious decision to devour a giant candy bar.’\[viii] If these behaviour patterns were confined to impulsively purchased chocolate, it wouldn’t be that big a deal. But our neural wiring doesn’t know the difference between a chocolate bar and a supercar. This makes it a huge deal. Often what looks like a decision demanding impulsive action is in reality nothing of the sort. Because if you’re wired to react to a certain trigger in a certain way, is the impulsive act to go along with that wiring, or to override it? ‘High-stake problems,’ said Nobel-Prize-winning godfather of behavioural economics Daniel Kahneman: > are likely to involve powerful emotions and strong impulses to action. If there is no time to reflect, then intuitively guided action may be better than freezing or paralysis, especially for the experienced decision maker. If there is time to reflect, slowing down is likely to be a good idea. The effort invested in “getting it right” should be commensurate with the importance of the decision.\[ix] Our relationships with money go awry because we do not see our in-the-moment decisions as the high-stake problems they truly are. Expenditures are expressions of lifestyle choices; they are no more isolated experiences than an individual cigarette is to a smoker. Because we don’t prepare well enough, we slow down and reflect only on the rarest of occasions. The ‘effort invested in getting it right’ should include prioritising time to reflect. Money decisions are no place for intuitively guided action until we’ve trained that intuition. Until then, our intuitions are ruled by our addictions. In the long-run, the ‘effort invested in getting it right’ doesn’t happen at the point of purchase. No one can consistently make life-enhancing decisions under that sort of cognitive load. The effort is not to make a series of snapshot better decisions but to cultivate a way of thinking that effortlessly enhances our life at each fork in the decision-making road. Taking conscious control of your thoughts and your decisions around money is the practical action I hope results from internalising the messages of this book. Like any skill, this needs to be trained. And like any skill, as near as makes no difference no one bothers doing that training. When it comes to thinking and acting with money, you have a huge advantage: you cannot escape it. No one goes for more than a few hours without making some sort of money decision, even if most of the time it’s done so unconsciously. Meditation is one of the hardest things there is. But like sawing through wood, it quickly gets easier; we literally get into the groove. ‘A tool wielded well becomes almost as much a part of you as your hands and feet,’ wrote Daniel Dennett, ‘and this is especially true of tools for thinking.’\[x] Professor of Psychiatry, Daniel J. Siegel, likens this process of integration to ‘the old physics idea of pushing a ball up a hill to get it rolling down the other side’. ‘It takes considerable effort and deliberate attention’ to get going with our process of intentional change (‘to push the ball up the hill’). ‘But ultimately,’ he explains, ‘the emerging mind takes its natural course towards integration, and the ball flows effortlessly down into the valley of coherence,’ and, in Professor Siegel’s words, ‘a cascade of positive effects seems to emerge spontaneously.’\[xi] ## **What is financial enlightenment?** ***The first step towards financial enlightenment is removing your brain’s blinding false beliefs about money and its role in your life*** To move towards financial enlightenment is to move away from money anxieties. You do not move away from anxiety by turning away from it, but by turning towards it. The first step in overcoming any addiction is to recognise you are actually addicted. The first step in overcoming money blindness is to recognise that you’re not blind, but wearing a blindfold. Immanuel Kant defined Enlightenment as the liberation from one’s self-imposed mental immaturity – an immaturity that arose not from ‘a lack of understanding, but in a lack of determination and courage to use it without the assistance of another’.\[xii] *Sapere aude*! Kant compelled us: dare to know! Hear the echoes both of defeating self-deception and of learning to see through the eyes of the sage. Kant is supported by modern neuroscience. ‘In the language of neuroscience,’ David Perlmutter and Alberto Villoldo wrote, ‘enlightenment is the condition of optimal mitochondrial and brain functioning that allows us to experience both wellbeing and inner peace *and* the urge to create and innovate.’\[xiii] Hear, alongside the echo of Kant’s daring dictum, the importance (again) of living with a lack of inner conflict. For Kant, the motto of the Enlightenment was ‘Have the courage to use your own understanding’. Nowhere is this more important for each of us than in how we think about money. Using your own reason is the most natural state for a human – a mature, grown-up human. However, in areas where reason is not cultivated, where power over one’s thoughts is given away, one remains, in that area at least, in childhood. ‘There is only one cause of unhappiness,’ wrote Anthony de Mello, > the false beliefs you have in your head, beliefs so widespread, so commonly held, that it never occurs to you to question them. Because of these false beliefs you see the world and yourself in a distorted way. Your programming is so strong and the pressure of society so intense that you are literally trapped into perceiving the world in this distorted kind of way.\[xiv] To free ourselves from this trap we need to learn a new language. Luckily, this new language contains exactly the same words as the language we already use. All we need to do is see, think about, and use them differently. Slowly at first, but shortly with so much ease that we’ll wonder how we ever did it differently. Taking conscious control of your thoughts and your decisions around money isn’t any more impossible than learning a language is to the child living in that language. The hardest part of any new process is not getting going, but keeping going past the point where your expectations of quick results are shown to be unrealistic. Unfortunately, the same initial enthusiasm for taking action carries over into overenthusiastically looking at the results. Yet results from mental rewiring are exponential in nature, and as we saw with such devastating consequences in the coronavirus pandemic, few people can wrap their heads around exponential growth. Getting going is the second hardest part. However much we may truly want to do something, what we really want is to become the person that doing that something will make us become. Often we’re not clear about who we want to become; we know only that we want to stop being the person we are right now – beset by the imposed wills of others that have seeped into our cells, comfortingly at first, but which always end up itching like bastards before long. Giving up these borrowed wills with no clear vision of what they’re to be replaced with, nor any idea if the attempt to replace them will be a success, is terrifying. We are drawn instead to quick fixes, to see our situations as perhaps not as bad as they feel. But such quick fixes are only ever illusions; illusions, as described in the Divine Comedy, that further hamper us from being the changes we want to see: > Because it often happens that a quick opinion\ > Inclines in the wrong direction, and after that\ > The intellect is hampered by vanity.\[xv] Part One of this book has been about brain surgery. It’s been about how to achieve this surgery with a philosophical process, set within an economics framework. About how to better allocate your resources in service of your Good Life by better allocating your attention. Which could sound even more terribly complicated than the myth of the terrible complexity of the financial world we’re trying to dispel. Yet it’s also been about how the initially hard turns into the eventually easy. About moving towards *wu wei* – effortless effort. About mastery, not magic. It’s been about moving from addictions to wants, and from failure to success, and doing so sustainably. You don’t beat addictions with willpower unless you have an overwhelming once-in-a-lifetime desire to do so. You beat them with controlling your internal and external environments such that your Good Life is lived as a side-effect. It’s been about how building a better relationship with money has to start with building a better brain: better organising your neural networks for spontaneous, effortless right action. Real changing of money behaviours isn’t about how to hack yourself into saving more responsibly for the future (though that doesn’t hurt). It’s about how to live with money such that the mental blocks to doing the right thing with savings (and everything else) disappear as a side-effect, beaten without a fight. It’s about systematic change right from the root, such that constant nudges to the flowers never become necessary. {% content-ref url="/pages/-MBJ80-UH8gqSWSmxOOR" %} [1.5: Money Maxims](/the-book/1/1.5) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Hear again Paul Tillich: ‘The drive for security, perfection, and certitude to which we have referred is a biological necessary. But it becomes biologically destructive if the risk of insecurity, imperfection, and uncertainty is avoided. Conversely, a risk which has a realistic foundation in our self and our world is biologically demanded, while it is self-destructive without such a foundation. Life, in consequence, includes both fear and courage as elements of a life process in a changing but essentially established balance. \[2] ‘Sati’ in the original Pali, to break with the Ancient Greek for a bit. The closest Greek equivalent is a combination of prosoche and procheiron – paying attention to how you’re paying attention and having right action close at hand, remembering what to do just as you need to be doing it, with the aim of internalising the distinction between an event and the meaning you attach to it. This is what Marcus Aurelius is doing when he’s writing his *Meditations*, which we must remember were written to himself – he is practising, not preaching, and to make use of him we must use his practice as a guide to our own, not as mere meme fodder. \[3] To borrow words tentatively best attributed to William Fitzjames Oldham (and probably misattributed to William James and Edward Murrow). \--- \[i] William Shakespeare, *Julius Caesar*, Act 2 Scene 2 \[ii] William James, quoted in Christophe André, *Mindfulness* \[iii] Rory Sutherland, *Alchemy* \[iv] John Vervaeke, [*Awakening from the Meaning Crisis*, *ep. 4*](https://www.youtube.com/playlist?list=PLND1JCRq8Vuh3f0P5qjrSdb5eC1ZfZwWJ) \[v] [Theragata 6.12](https://www.dhammatalks.org/suttas/KN/Thag/thag6_12.html) \[vi] William James, *The Principles of Psychology, vol. 1* \[vii] Bertrand Russell, *History of Western Philosophy* \[viii] Paul Dolan, *Happiness by Design* \[ix] Daniel Kahneman, [interview with Sam Harris](https://samharris.org/thinking-about-thinking/) \[x] Daniel Dennett, *Intuition Pumps* \[xi] Daniel J. Siegel, *Mindsight* \[xii] Immanuel Kant, *What is Enlightenment?* (definition paraphrased) \[xiii] David Perlmutter and Alberto Villoldo, *Power Up Your Brain: The Neuroscience of Enlightenment* \[xiv] Anthony de Mello, *The Way to Love* \[xv] Dante Aligheri, *The Divine Comedy* # 1.5: Money Maxims To see the world differently, see your language differently; train yourself to use certain words and phrases as reminders to stop and think things through > Learn things so well that words become works.\ > – Seneca, *Letters from a Stoic* > *…the parrot, catching the sound of a word belonging to his vocabulary, was moved to interfere. Parrots are very human.*\ > *– Joseph Conrad,* *Nostromo* ## What this chapter is about **Practical steps** – Everything ultimately boils down to these Maxims. These are the steps that change the way you are wired to live with money. But *starting* from the Maxims doesn’t work. They can help only in the context of the understanding built up in the whole of Part One. **Designing your environment to encourage thoughtfulness** – The point of these concepts, phrases, and words is to train yourself to pause when you hear them. To stop and remember to question whether the automatic beliefs you attach to are helpful, or have to be true. ## What this chapter isn’t about **Prescriptions** – Stopping and thinking is different to stopping and believing a different thing. I am not telling you what to believe. Sometimes more expensive is better. The point of these Maxims is to make sure you check. **Expectations of immediate success** – Rewiring a brain takes time. These Maxims are designed to mould your mind in a meditative fashion. For that’s the only way that works. Know that you’ll ‘fail’, but keep coming back to them. Maybe you catch 1 in 10, then 1 in 5, then 1 in 2, until eventually you hear each of these as easily as you do your own name. # 1.5.1: Resetting your relationship with money ## **How to interfere with inherent inferences** ***A runaway unthinking brain needs to be trained to halt in its tracks*** Reinvigorating your brain is a hard sell. The training is undramatic, and the changes are subtle. Even if you’re in no doubt about the rewards, and the routine required to reap them, you can still be in a lot of doubt about actually doing what needs to be done. On top of that, ‘There is an abyss,’ as Pierre Hadot wrote, ‘between fine phrases and becoming genuinely aware of oneself, truly transforming oneself.’\[i] If all it took to have a fantastic relationship with money were these maxims, I’d have dashed out a book containing only this section, and kept the rest of it to myself. Not only would this not work, but it would likely backfire. Distillations are dangerous when they are used not as reminders or learning, but as replacements for it. Similarly, anecdotes may grab attention in a way that opens one up to a lesson, but they do not teach that lesson. And whereas being prompted with a story could well trigger a reactive recollection of the lesson, what we want for sustained behaviour change is the lesson to be triggered by the circumstances that require it to be put into practice. We need to go slowly, and we need to start small. To reduce the universe over which we need to be mindful. We’ve already reduced it to money, but that doesn’t really help, because money plays a part in just about all our decisions – that’s why we’re focusing on it. Everybody’s lexicon has a special inner circle. Words, phrases, and theories that ears can’t fail to hear across a crowded room, that mouths can’t resist preaching about, or that fingers can’t resist correcting misuse of on the internet. For example, your name, your most hated politician, or, for Daily Mail readers, ‘house prices’. You’re already being triggered by something; far better to redirect that energy towards living a better life than getting cross at strawman communists. We know that ‘developing greater control over your attention is perhaps the single most powerful way to reshape your brain and thus your mind’.\[ii] We also know that ‘you pay attention by optimising some other process’. The process we need to optimise is that of the lexicographical inner-circle that already has the greatest control of your attention-grabbing machinery. We need to add to the ranks of words that make you stop in your tracks those that can most effectively enlighten your money mindset, so they can punctuate the flow of unthinking with moments of active, structured, purposeful, thought. This is how we get [unstuck](/the-book/1/1.2/1.2.1#how-do-you-get-unstuck-from-financial-confusion) and break free of the circular troughs of self-deception. As with any habit, you should expect to ‘fail’ almost constantly. However, as in meditation, where losing attention should not be seen as ‘failure’, but finding it again as success (the only failure being not showing up), so with other habits. The goal is not unbroken compliance but extending the period between each ‘failure’. In a surprisingly short time, those gaps will become so big that you’ll forget you were ever measuring them. Hardwired habits begin as fragile intentional attractors of attention. The nascent neural pathways we are bringing under conscious control such that they become unconscious habitual highways are shaped by our thoughts – how we interpret cues and how we respond to them. The same cue, followed by the same routine eventually becomes a highway in your brain. ## **Introducing Principles, Rules, and Triggers** ***A money behaviour-changing framework*** This chapter sets out specific combinations of cues and routines to remember to follow in response. These cues are divided into three: **1.** [**Principles**](/the-book/1/1.5/1.5.2) – Principles are our guiding stars. The reminder that there’s a big goal behind all the smaller ones. The Commander’s Intent of a military operation. They’re what we see really matters when we zoom all the way out. Where will our current actions end up? True in all circumstances. In the words of Ralph Waldo Emerson, ‘As to methods, there may be a million and then some, but principles a few. The man who grasps principles can successfully select his own methods.’\[iii] Principles are used to divine more context-specific rules. To use the earlier distinction, Principles are *sophia*; having a process for putting them into practice is *phronēsis*. We want both. **2.** [**Rules**](/the-book/1/1.5/1.5.3) – Rules are our guiding lights. The koans, quotes, and soundbites that we hope stick in our minds in a way that aids their recall when they’re required. A single rule can cover multiple situations. The right rules are useful both on their own and for sparking in-the-moment triggers. **3.** [**Triggers**](/the-book/1/1.5/1.5.4) – Triggers are our guiding blinking reminders on our phones or post-it notes around our homes. They are a laser-sharp attention to the language we use with ourselves and others. Our language is a key to how we interact with the world; take control of it and take control of your behaviour. We need to train ourselves to hear triggers as we do our own names amid background noise. \* For effective behaviour change we need a framework that uses all three. That continually connects long-term principle-guided visions of the future and the immediate next steps to take to get there. That takes concepts, distils them to phrases, and trains us to catch when we’re in need of course correction so we slow down and change direction. Most financial advice stays firmly in the comfortable rules zone, sour-grapesing principles as fit more for hippies than serious finance-focused professionals. Better financial advice\[1] remembers the importance of principles, even if it doesn’t always interrogate them properly. Triggers are ordinarily ignored completely, or locked up in academic behaviour-change experiments. Principles may have greater breadth of vision, but that rarely helps when we’re in the depth of the decision-making weeds. And where soundbites signal our attention, it is the specifics of our actions – down to the level of our thoughts and our language – that rewire our neural networks. Most advice stops too short. ‘Set a budget and stick to it’ is great, but it doesn’t go deep enough. We don’t like deep advice – especially when we’re most in need of it. The more we feel like our relationship with money is imperfect, that it could do with some change, the more we are likely to feel guilty that the change hasn’t happened already,\[2] and no guilty person likes being put on the stand, however good they are at lying to the jury.\[3] Triggers are in-the-moment, in-your-face, automatic routines for every critical cue. Vigilance is vital. Every cue you catch is a vote for a new way of thinking, acting, and being. Every one you don’t is a vote for the dark side. Manifestoes are no good if they sit on the shelf like so many consultancy reports. ## **Learning the language of living with money** ***If it doesn’t require effort, it isn’t learning, and if it doesn’t become effortless, the learning didn’t work*** Our words are the building blocks of our world. The metaphors that power our language are the myths by which we live.\[iv] Metaphors are symbols that allow us to hold complicated concepts in mind long enough to do something with them – to respond thoughtfully instead of unthinkingly. In the word of Iris Murdoch, ‘Words are the most subtle symbols which we possess and our human fabric depends on them. \[…] The most fundamental and essential aspect of culture is the study of literature, since this is an education in how to picture and understand human situations.’\[v] These Principles, Rules, and Triggers are designed to interrupt our unthinking as quickly and as effectively as possible, like how a broken rhythm in music or while sparring can arrest our attention or get through an opponent’s defences. This does not mean that the changes they aim at will come as quickly. As Murdoch continues, ‘Moral change and moral achievement are slow; we are not free in the sense of being able suddenly to alter ourselves since we cannot suddenly alter what we can see and ergo what we desire and are compelled by.’\[vi] Changes may not come suddenly, but starting the process of change can. Your words and grammar shape your thoughts; they need to be brought out of the unconscious shadows if they are to illuminate a better way to live. \* These are starting points only. When you examine your own unique relationship with money, you will find many more. By definition, there cannot be an 'enlightenment checklist'. Invent your own. Interrogate them. Internalise them. Put them in an Anki deck\[4] and hardwire them into your life. And make sure it feels like work (to begin with). From active recall (as opposed to passive review) and even answering mock exam questions before beginning studying, countless studies support the idea that some sort of struggle enhances learning – when you tell your brain something matters enough to you to struggle, it pays attention. {% content-ref url="/pages/-MBStiQ7V7gltHj\_h5r\_" %} [1.5.2: Principles](/the-book/1/1.5/1.5.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Usually the preserve of ‘planners’ as opposed to advisers, a distinction we’ll look at in more detail in [Part 2, Section 1.3](/the-book/2/2.1/2.1.3). \[2] Arguably thanks to the fall-from-Eden bedrock of our psychology. \[3] Even when – perhaps especially when – they are their own jury. \[4] Or other spaced-repetition software of choice. \--- \[i] Pierre Hadot, *What is Ancient Philosophy?* \[ii] Rick Hanson, *Buddha’s Brain* \[iii] Ralph Waldo Emerson, quoted in Ross Edgely, *The World’s Fittest Book* \[iv] An allusion to both George Lakoff’s *Metaphors We Live By* and Joseph Campbell’s *Myths to Live By* \[v] Iris Murdoch, *The Sovereignty of the Good* \[vi] Iris Murdoch, *The Sovereignty of the Good* # 1.5.2: Principles Our guiding stars: the long-term inspiration behind our short-term actions **N.B.** 1. Read [this](/the-book/1/1.5/1.5.1) first to understand the purpose of these Principles, how they fit with the Rules and Triggers, and how reading them in isolation from the rest of Part One is a waste of your time. 2. Though presented as lists, these Principles, Rules and Triggers are like the fruiting mushroom bodies sprouting from the underground network of a gigantic fungus. Each idea in this book is inextricably linked to all the others via the magical and mysterious web of human wiring and the societies in which it expresses itself. 3. This list is subject to change as I write the rest of the book. ## The Principles #### **1. Overarching framework** Everything comes back to transforming your resources – your money, time, and energy – into your version of the Good Life. You are always using your resources; try to always use them right. #### **2. There is only one goal** Every short-term goal is a subgoal of living a Good Life. Achieving a specific aim is a tree; living well is the forest. Don’t waste time on trees that don’t add to the health of your forest. For example, doing something simply because you can, or because your parents want you to (or specifically don’t want you to). The flourishing state of flow we want comes from fulfilment of our potential – doing what is uniquely expressive of our souls and at the edge of our abilities. All ‘[having mode](/the-book/intro#the-becoming-mode-v-the-having-mode)’ goals are ultimately misleading. #### 3. **Think it through** Thinking shit through is a tiny hurdle at which none have fallen, but many have turned from without attempting to clear it. Business consultants and executive coaches like to dress up thinking things through properly with phrases like ‘second-order thinking’ and ‘using mental models’ so it sounds complicated enough to charge for it. Recipients like to let them because complexity is just as good an excuse as it is a sales tool. But it’s just thinking. A ‘second order’ thought is just a thought done properly. Anything else is unthinking.\[1] You’re human; you were born to think. And while bothering to do it is hard, it’s never as hard as we believe it to be when we’re dodging it or delegating it. How you do anything is how you do everything (see Rule #X), and shoddy thinking makes everything terrible. #### **4. Does it work?** A mystifyingly overlooked aspect of any action is whether it actually works. Given that there is only one goal, judging by quality of results not quantity of attempts should be easy to assess. And while all success is subjective, it’s still fair to ask, in the concept of turning resources into a Good Life, when the same thing has been tried a million times, did it work? And if it didn’t, is a reasonable response to double-down and try for the million-and-first? Did it work last time? Does it work ‘on average’, or for you? If the success of something relies on an assumption, think it through: is the assumption true for you? Does it need to be true? What does the world look like if it’s not? Is there a better way? #### 5. **It’s not about the numbers** Financial success is very rarely anything to do with numbers. There is an underlying emotional reward behind every use of money, every thought of money. Pretending there isn’t blocks us from working out what it is we really want to achieve and subsequently whether what we did to achieve it worked or not. Focusing on the numbers simply doesn't work. I don't care how strongly you think it will for you. It won't. Everybody thinks they're the exception. And everybody is wrong. I've seen them all. Money sourced from inheritance, employeehood, entrepreneurship, and lottery winnings. It makes no difference. Having money on your mind does not stop blood running through your veins. Money amplifies your emotions, not eradicates them. ## The strange silence of ‘Does it work?’ Checking whether your actions achieved their aims should be a source of confidence, not fear The job of face-to-face financial advice is asking questions.\[2] Many of these questions are roundabout means of asking ‘does it work?’ (or ‘did it work?’ or ‘is it likely to work?’) in a way that prompts a client to ask themselves whether it does or not, that if it were asked directly would risk a defensive reaction that suggests it probably doesn’t, but that slams the door shut on realising this. ‘Does it work?’ is the bridge between the theoretical and the practical, and the inspiration for this book. If the screwy way most of us obsess over money, and the gap between its accumulation and its application in service if the Good Life actually worked, there would be no need for me to write, nor for you to read, this book. ‘Does it work?’ should go without asking. And it does. But not because it’s second nature. Asking if something works should be welcomed as a source of validation, but it more reliably triggers vilification. You’d think questioning if the objects of someone’s major spending decisions were worth the sacrifices made to obtain them would be met with glee at the chance to celebrate one’s wisdom. After all, you’re asking if they were right, not suggesting they were wrong. This never happens. You don’t need to naively try this line of questioning very often before you abandon it entirely.\[3] There’s a concept in psychology called the ‘focusing illusion’. In *Thinking, Fast and Slow*, Daniel Kahneman sums it up as: ‘Nothing in life is as important as you think it is while you are thinking about it’.\[i] Which is a looser definition of ‘thinking’ than we’re using. Because it’s less thinking and more unthinking belief. As Kahneman explains elsewhere, ‘When people are induced to believe that they “must have” a good, they greatly exaggerate the difference that this good might make to the quality of their life.’\[ii] The upshot is that by focusing on one aspect of an event at the expense of the more realistic whole, you make shitty predictions, and shoddy decisions. You blindly believe something will work, when a bit of thinking would’ve strongly suggested it wouldn’t. Falling for the focusing illusion once does not confer immunity to it the next time. Sometimes we learn from our mistakes. Other times – often when the stakes are higher – we double down instead. Some mistakes are so hard to stomach that rather than admit to them and learn the lessons for next time, we scratch around for justifications of how things may not have turned out perfectly, but *we* are still perfect all the same. As Rory Sutherland wrote, ‘Give people a reason and they may not supply the behaviour; but give people a behaviour and they’ll have no problem supplying the reasons themselves.’\[iii] So how can we get better at learning? Step one: reframe. If you work for a company and something has been proven to fail every single time when other companies in your industry have tried it, do you make it your main company priority to do the same thing, praying that this time it'll be different? That you'll be different? Step two: enlist extremes. I learnt more about the ways our relationship with money messes with our lives in three months in a country\[4] populated almost exclusively with people both with lots of money and driven by an obsession with wanting more money than I did in almost three decades prior to that. ‘The true man is revealed in difficult times’.\[iv] The 2020 coronavirus pandemic was for many a test of whether being a billionaire works. Being a billionaire is a burden. As soon as you’ve enough money to serve every possible source of meaning you could ever dream of, everything on top is just some more shit you’ve got to deal with. And rare is the person who can’t live an abnormally satisfied and meaningful life with a cool 999 million. One of my earliest client memories is that of a man who had sold his private-equity firm, with him and his colleagues each pocketing about £25 million. This man was perfectly happy in his current home, had few hobbies, had already set his children up to be able to do anything, and didn’t want them to be able to do nothing. He wasn’t the most charitably minded man, but he did want to be there for his friends should they ever need him. So he refused to invest in anything other than cash. He knew the price he was paying for this in foregone returns ran into the tens of thousands a year, and millions cumulatively. But if he invested in the same stuff his friends did, if they ever needed help, he’d be in no position to provide it. It was like his wealth were a ramped-up rainy-day fund for those he cared about. If a rainy-day fund isn’t used when it rains, it’s not a rainy-day fund, it’s a wasteful signal of rampant insecurity and poor life choices.\[5] Come the coronavirus crisis, some billionaires saw the rain, and responded by answering the call to try to save the world, in a way only someone with their resources could, their burden relieved by the chance to bring meaning to it. In short, having that wealth finally had a chance to ‘work’.\[6] Others looked to protect money they couldn’t spend in 1,000 lifetimes, at the expense of people without enough for next week, let alone next life, their burden only increased by a world-sized mirror being held up to their self-loathing. \* The journey of self-knowledge is defined by deception. It is knowing what doesn’t work, to reveal an ever-more-refined vision of what does. It is stripping away attachments to delusions until you become comfortable in your own skin. It is, to return to the opening quote of this book, becoming what you are, having learnt what that is. We learn what is by understanding what is not. You want to live, not just exist. ‘Would you say,’ asks Seneca, ‘that a man who had been caught in a fierce storm as soon as he set sail, and, buffeted to and fro by a series of winds raging from all sides, had been driven in a circle around the same course, had had a long journey? It was not a lot of journeying, but a lot of tossing about.’\[v] Too often, despite all its fancy modern modelling, financial planning is like trepanning – cutting a hole in someone’s head to let out evil spirits. It ‘works’ in a way. There’s plenty of evidence of post-operative survival, and if it never relieved any symptoms, it would have stopped way sooner than it did. That doesn’t mean it ‘worked’ in a more serious sense. Sometimes, like insurance, or facing a fear, what doesn’t kill us makes us stronger. Sometimes it’s just stupid. A head with a hole in it is weaker than one without. {% content-ref url="/pages/-MBSu0pZrmwNkKwRLqD9" %} [1.5.3: Rules](/the-book/1/1.5/1.5.3) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] This comes back to [participatory knowing](/the-book/1/1.3/1.3.2#4-participatory-knowing): you can know something in a propositional or procedural sense, but to think it through is to apply it to real life, to the real world, to think through how it will affect your life, those around you, the world… As Niels Bohr apparently once told Einstein, ‘You are not thinking; you are merely being logical.’ \[2] Despite many clients coming seeking answers and many poor advisers being all-too-keen to supply them. \[3] I naturally found this out the hard way. At least defensive vitriol is a pretty persuasive answer. Defensiveness is both the admission of a problem and the further admission that we’re not ready to admit to it yet. \[4] Qatar. \[5] For what it’s worth, unlike my boss, who considered this man a paragon of nobility because he left his children enough to do anything but not enough to do nothing, I thought the man was a fool. Prioritising potential tiny comfort for one’s millionaire friends over definite transformative experiences for the millions of friends he didn’t allow himself to be aware existed was probably not the best way to live. But this isn’t a book about lifestyle judgment, and from the perspective of his narrow minded outlook, his decision made sense. \[6] I assume those that stood up didn’t feel totally shitty for having done so, but I can be corrected on this. \--- \[i] Daniel Kahneman, *Thinking, Fast and Slow* \[ii] Daniel Kahneman, ‘Focusing Illusion', [Edge.org](https://www.edge.org/response-detail/11984) \[iii] Rory Sutherland, *Alchemy* \[iv] Epictetus, *The Discourses* \[v] Seneca, *On the Shortness of Life* # 1.5.3: Rules Our guiding lights: mental notes to recall when required **N.B.** 1. Read [this ](/the-book/1/1.5/1.5.1)first to understand the purpose of these Rules, how they fit with the Principles and Triggers, and how reading them in isolation from the rest of Part One is a waste of your time. 2. Though presented as lists, these Principles, Rules and Triggers are like the fruiting mushroom bodies sprouting from the underground network of a gigantic fungus. Each idea in this book is inextricably linked to all the others via the magical and mysterious web of human wiring and the societies in which it expresses itself. 3. This list is subject to change as I write the rest of the book. ## **Philosophy** #### **1. Chuck out before you tidy up** Filter first, process second. The cleverest filing system, and fastest filing fingers in the world are an irrelevance if what you’re filing should’ve been shredded, or better yet, ignored in the first place. Before accumulating any new material or mental possessions, or organising existing ones, ask yourself: is it adding enough to my life to justify the space it’s taking up in my head or my home? For example, seeing all investments as gambles makes all fancy stock-picking analyses pointless. Storage solutions are more valuable than living in a mess. But living without clutter is better yet. And living in a way that doesn’t produce clutter in the first place is best of all. #### 2. **Keep events and their meaning separate** Circumstances are an uncontrollable flow of meaningless events. All meaning you attach to them is supplied by you. Confusing the two is at the root of most mental troubles. Unfusing them is at the heart of all therapy. Focus on what you can control. These things are smaller in number but far greater in power than you act as if they are. Your choice of interpretation, your ability to beat self-deception, and your breath are all the power you need to live a Good Life. Money is always circumstances. #### **3. The Good Life is the only goal** Achieving goals is simpler than setting them. Achieving goals requires running the appropriate algorithms for environment control and behaviour change and following the rules until you get there. And getting there feels so good. Which is precisely why it’s so dangerous. Because it focuses us on tangible short-term isolated things to tick off, rather than cultivating an interconnected system of living that continually reminds us that we have limited resources and one life to serve with them. The Good Life happens as a side-effect, but that doesn’t mean it shouldn’t guide our goal-setting; it’s the only thing that should. For example, you may know you value generosity and get a heartfelt kick from helping others, but spend as much on a new car as transforming tens of thousands of lives. #### 4. **All success is subjective** If you find yourself using ‘success’ without quotation marks, question what you mean and whether it’s true. There is no objectively best anything, and there’s especially no best investment. But there is a best investment *for you*. #### **5. How you do anything is how you do everything** The reason financial advice should be centred on neuroscience. There’s no such thing as ‘just this once’. Every action makes one pathway in your brain easier to travel down next time, and another one harder. Think of your life as a system, not a series of snapshots: don’t waste your willpower on doing stuff Present You is already sufficiently motivated to do. Use it to give a helping, environment-controlling hand to the Future You who doesn’t have enough. #### **6. Your relationship with money is a practice, not a performance** Process outranks product. Your relationship with money is a process. Of continually remembering who you are becoming, and refining the actions that are taking you there. Turning this into a performance for others sends you in a completely different direction. #### **7. There’s a wanky way to do anything** There’s an all-too-fine line between a healthy lifestyle and an unhealthy preaching about it. If you need others to follow you to justify your choices, they’re not your choices. To obsess over tactics without understanding how your system works is to willingly distort your life story. To go through the motions is to go with your blindness, not against it. Remember Principle #2: There is only one goal. Focus on your intention and your attention, not on the impressions of your expressions. #### **8. Outside of poverty, money problems are mindset problems** There are two types of money problems: not having any, and not having any good ideas what to do with it. More money solves the first type and exacerbates the second. The second type are solved by philosophy. #### **9. Cultivate ‘wu wei’ (effortless effort)** Don’t waste energy in sieging what is better side-stepped. Don’t fight your wiring. Rethink it. Reframe it. Examine. Observe. Look from different angles. Cultivate a state of being in which action aligns effortlessly with your nature. Create your own conditions for flow, and go with them. #### **10. Focus on expenditure, not income** Your expenditure is a more honest guide to who you are than your income. Aligning it with your values is the easiest heuristic for living a Good Life. And it can start immediately. You can’t out-earn shitty spending habits. Let the examination of your expenditure (of money, time, and energy) determine your income, not the other way around. #### **11. Focus on enough, not more** More is, by definition, not enough. It is also not the safety net it is mistaken for. Beware too those by preaching that money does not equal happiness think themselves safe from the mistake of more. Such preaching is born of the same belief that more is inherently ‘better’, as opposed to an occasionally better direction of error. #### **12. Focus on value, not price** Remember the pineapple.\[5] Do not use objective price to signal subjective value. Value to you is not the same as cost for the world to provide and profit from. #### **13. Beware the Arrival Fallacy** If you find yourself thinking ‘when X is sorted, then I will be able to do Y and feel Z’, then stop. You’re wrong. Be it a bigger house, a job title, a family situation, or even an investment reaching or returning to an arbitrary value, it is in every instance irrelevant to the goodness of your life. #### **14. Beware the Ownership Fallacy** Do not own what is better rented. Do not own *or* rent what is likely to increase only the cost, rather than the quality, of your life. #### **15. Beware the curse of can** Your Good Life is determined by what you want, not what is available. What is your motivation? Good Life or greed? Flourishing or fear? Want or addiction? External approval or internal peace? Are you thinking about you, or thinking about other people thinking about you? Whether you can afford something is only ever a reason *not* to do something. #### **16. Denunciation is still attachment** To be against something is still to be defined by that something. Play a different game. To denounce money is not to have a healthy relationship with it; it’s a different sort of abusive one. #### **17. The solution isn’t for sale** Get rich quick schemes are a subset of get fixed fast schemes. They are in every case as useless as they are tempting. Buying a holiday home doesn’t make for better holidays. Paying for a personal trainer doesn’t make you fitter. Nor do diet pills or overengineered gym equipment. If you think you can buy an answer to your problem, your problem isn’t what you think it is. #### **18. Pain is bad, discomfort is good** The difference between pain and discomfort is how you feel afterwards. Discomfort makes you grow, pain makes you break. Much long-term money pain is a direct result of avoiding short-term money discomfort. Adding extra padding to a support a poor position doesn’t improve your posture, it accelerates its decline. Hire advisers who make you squirm, who teach you to swim rather than promising you needn’t worry about the tide. #### **19. Your history has not ended** Most people die at 25 and are buried at 75. Most people believe that retirement is the end of a job and the beginning of waiting to die. Despite likely having more potentially productive time left than has elapsed. And more wisdom to know what they want do with it (though these will still change again, and again, and again). And more money to fund those wants. Remember this when undertaking any cash-flow modelling. When you think you’re at a peak. Check. Look up and around. There’s a higher peak hidden in the clouds. Having to go down before you rise higher is not a hardship. It’s a privilege. ## **Investments and advice** #### **20. If it doesn’t increase your self-knowledge or reduce your self-deception it’s bad advice** Remember [Principle #1](/the-book/1/1.5/1.5.2#1-overarching-framework): we’re using our resources to live our version of a Good Life. This is built on self-knowledge. Because we’re so good at self-deception, we can benefit from help with this. However, most advice is incentivised to increase the deception, not overcome it. This book aims to help you better understand what advice is helpful, and how to go about getting it. #### **21. Owning an investment doesn’t turn you into a robot** Classical finance is based on the assumption that when you buy an investment, you stop being a human. It’s so pervasive that most investors don’t even think to challenge it, even to the extent of thinking they’re someone doing it wrong if they find themselves having feelings about their money. You don’t need to ditch your feelings. You need to ditch the belief that they can be ditched, and work with them instead. #### **22. Good advice is about being rich, not having riches** Being rich, like being intelligent, or skilful, or influential, or to possess any other abundance, is to have responsibility. To be made of money is not a good thing. There’s nothing that more drives a mind away from the comforts of compassion than to attach every aspect of being to the bank. Be made of values and virtues. #### **23. You and your investments are both part of the same pot of resources** If you have value to give to the world, the world is likely to give you money for this. In the financial plan of your life, just because this money is not yet in your bank or investment account it does not mean it’s all that different from the stuff that is. Your future financial comings and goings affect the right thing to be doing with your current money just as your current ones do. It’s harder to quantify these, but that doesn’t mean it can’t, or shouldn’t, be done. #### **24. Get the basics sorted first (and there are only basics)** In physics, the observer effect is the theory that the mere observation of a phenomenon inevitably changes that phenomenon. It can screw with your system of goals too. Start focusing on goals and they change before your eyes. As per Principle #2, and Rule #3, the only goal is the Good Life. If a subgoal isn’t taking you towards this, it’s a shitty goal, however shiny and however much short-term status it promises. True, sustainable, status is a side effect of mastery of the basics. A narrow-minded focus on the measurement changes the goal to the metric, not the meaning. #### **25. It isn’t different if you’re rich** The lack of rewards for breaking beyond a certain threshold of wealth is a great disappointment to those that do so. To alleviate this disappointment, an industry of storytellers have spun tales of a secret kingdom of rich-people benefits, from ‘better’ experiences, ‘better’ goods, ‘better’ services, and ‘better’ investments. They are all bullshit. See Trigger #1: Do not confuse better with simply more expensive. In investments, more than anything else, Michelin prices do not stop you receiving McDonald’s quality. Treat ‘alternative’ investments like ‘alternative’ food sources. The eggs of a sturgeon are not better than those of a hen. #### **26. Know what good advice looks like before you look for it** If you don’t know what you’re paying for, you will default to whom you trust the most, which means the appearance of trustworthiness is the most incentivised quality for an ‘adviser’ to possess. And the people best at appearing trustworthy (because they have no actual product to sell, not even a crappy one) are conmen. Know how to manage your money yourself before deciding if you want to pay someone else to do it for you. This is why Part Three of this book (How to Invest Like a Non-Idiot) comes before Part Four (How to Get Help that’s Actually Helpful). #### **27. An investment going up doesn’t mean the investment or the adviser is good** Investments tend to go up eventually. Even those picked by a dart-throwing chimp. We tend to compare how much they go up against what we know. If you know only cash, or the value of your house, any return – and by extension the person who ‘got’ it for you – is likely to look great. If you know the return you could get from the simplest (and sanest) default investment option, it’s likely to look less great. Also, whatever the return was over the probably excessively short time period you’re looking at it does not tell you if it was or is the right thing for you to be invested in any more than a one-off winning bet tells you you should become a professional gambler. {% content-ref url="/pages/-MBSu0WmgOVOCCNb8G1s" %} [1.5.4: Triggers](/the-book/1/1.5/1.5.4) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} # 1.5.4: Triggers Rewire your reactions: train to hear these as you would your name across a crowded room. Engage your brain. Label the thought. Reframe it. Make a wiser decision **N.B.** 1. Read [this ](/the-book/1/1.5/1.5.1)first to understand the purpose of these Triggers, how they fit with the Principles and Rules, and how reading them in isolation from the rest of Part One is a waste of your time. 2. Though presented as lists, these Principles, Rules and Triggers are like the fruiting mushroom bodies sprouting from the underground network of a gigantic fungus. Each idea in this book is inextricably linked to all the others via the magical and mysterious web of human wiring and the societies in which it expresses itself. 3. This list is subject to change as I write the rest of the book. Occasionally I will edit the list but not update the numbering. Most investment advice comes from a place of thinking its job is to explain the complicated. It skips over things like these triggers because it considers them too trivial. Space in my important investment book is much better spent teaching you how to budget, it thinks. This ignores Rule #1: it is tidying up what is better discarded. Beat addictions, focus on your wants, and budgeting mostly looks after itself. Budgeting and beating addictions are both hard because they are changing behaviour. But one of them changes the mindset behind those behaviours too. It is therefore infinitely more valuable, even if its tools look a lot more trivial. Tactics without understanding *are* trivial, because they’re not triggers for real, sustainable understanding and change. Which is why in isolation this list, or anything you come across on Twitter, is useless. There’s a reason it’s at the *end* of Part One. We are not changing definitions of words. We’re just using them more precisely and thoughtfully. Precise language shifts us from reacting from our amygdala (the defensively minded fear centre) to engaging the cooler, calmer prefrontal cortex. This is why, incidentally, therapy encourages us to name emotions to tame them. #### **1. Better** Better, or just more expensive? Better for you? Better than everything else you could do to cultivate your Good Life with the same resources? Do not confuse better with more expensive, because all other things being equal, more expensive is inherently worse, because you’re starting from further back. #### **2. Having, being** Who you are is important. What you have is not. You know this but you do not act like you know this. Stop and remind yourself. This includes material possessions as well as blind belief in idols. #### **3. Have to, should** ‘Have to’ and ‘should’ are almost always lies. This is not to say you aren’t better off doing what you believe you ‘have to’ do; the consequences of not could be fatal. But you are better off understanding that it, like everything else, is a choice. #### **4. Needs, wants, addictions** Needs and wants are the same thing; do you not ‘want’ a roof over your head, etc.? Your body no more wants sugar than a smoker’s wants tar. And is some form of meaning or purpose or a hug not a ‘need’? Do not confuse wants with addictions – wants make your life better, addictions, do not, but they’re awfully cunning at convincing you otherwise. #### **5. Next time** There’s no such thing as next time. ‘In individual moments we all know how the most elaborate arrangements of our life are made only so as to flee from the tasks we actually ought to be performing’\[i]. What happened last time you resolved with all your might to stride down a more virtuous path tomorrow? Slow down, think it through, and decide who you want to become. See also Rule #5: How you do anything is how you do everything. #### **6. On average** The world isn’t short of happiness research. Studies can be great guides for experimentation, but they’re awful prescriptions, especially when it’s only the headline anyone reads. Cultivating certain psychological traits, owning pot plants or gratitude journals may make people 10% happier on average, but that doesn’t mean a) you should follow what worked for someone else without examining how well it’s working for you, or b) preach about what does work for you. You are neither an average, nor a universal representative. Be quicker to run your own experiments than to blindly share the headline results of someone else’s. #### **7. Overspent** Do not be like foolish gym bros who wear ‘overtraining’ as a badge of honour, rather than admitting that they are ‘under-recovering’. You didn’t overspend. You undersaved. Because you underthought. Do not brush this aside. Remember [Rule #5](/the-book/1/1.5/1.5.3#5-how-you-do-anything-is-how-you-do-everything): How you do anything is how you do everything. Overspending is a symptom of an underlying mental problem, which very obviously did not get fixed by the overspending. Find the problem and fix it properly. #### **8. Security** Security is the most important benefit of finances for a lot of people. It’s also one of the most difficult to think about accurately. Untangling real security from its evil illusory twin is hard, but worth it. When you hear ‘security’, stop and think it through. How do you know you’re receiving what you want (and more likely than not paying a hefty price for)? #### **9. Freedom** Like security, freedom is an incredibly valuable concept that’s beset by ambiguity. Do you mean freedom to, freedom from, or freedom for? #### **10. Rich, 1%** Unless you think only modern-day billionaires are worth anything, you are already rich. Stats and stuff [here](https://book.moneyblind.net/the-book/2/2.1/2.1.1). #### **11. Success** Success is so arbitrary as to be a completely useless word unless you’re using it with quotation marks, and usually to highlight shoddy life choices on behalf of someone demonstrating how not to live. All success is subjective, and net worth is no guide to self-worth, rendering 99.9% of uses of the word success nothing other than a guide to the lack of wisdom of the person using it. If you hear the word, understand it in the context it’s meant, but do not believe for a second it means what the person who’s said it thinks it means. And never use it yourself. #### **12. Think, believe** The words ‘I think…’ are commonly a precursor to expressing not a thought, but a belief. There’s nothing wrong with operating from beliefs built on previously having thought something through. Just don’t forget to challenge them now and then. #### **13. Treat** Treat or trick? Treat or poison? Treat or someone else’s attempt to overlook their own troubles? Why is it that everything we traditionally describe as a ‘treat’ leaves us poorer and in worse health? See also [#4: Needs, Wants, Addictions](/the-book/1/1.5/1.5.4#4-needs-wants-addictions), and [Rule #3](/the-book/1/1.5/1.5.3#3-the-good-life-is-the-only-goal): The Good Life is the Only Goal. #### **14. Worth** What something costs is not what something is worth. Cost is calculated by the world’s supply and demand. Worth is determined by a context-dependent contribution to your life. #### **15. Haves and have nots** What do they have? What do they need? Do they own it, or does it own them? Are you jealous of their possessions *and* their mental state? See also #10: Success. #### **16. Good job** Jobs can ruin marriages, relationships with children, friendships, and internal harmony, and ravage physical and mental health and still be called ‘good’. If this doesn’t strike you as dumb, I cannot help you. If it does, stop using ‘good’ when you mean ‘high salary (that comes at an unknown cost)’. #### **17. X has done well for themselves** Every time you say someone has done well for themselves because of something they own or a titled they’ve earned, you are reinforcing the sort of world that fucks you and everyone else up. A world that equates net worth with self-worth and thinks success is objective and material. If you can say it without mafioso overtones, ‘taken good care of him/herself’ has to be preferable. #### **18. Get ahead** Get ahead of what? Other people? What does their position have to do with your Good Life? Why them? Why not someone even smarter, fitter, richer? Get ahead of yourself? By definition that’s a poor way to get to know yourself. #### **19. I can afford it** So what? The ratio of the monetary cost of something to the cash in your bank account is relevant only to rule something out, not to rule it in. Can you afford the time, the energy, the foregone everything else you could’ve done? And remembering just about all of the Principles and Rules, will it add to your Good Life, or detract (or distract) from it? #### **20. I don’t care about money** If you really didn’t, you wouldn’t be preaching about it. People who assert their lack of fuss about financial matters are also prone to using phrases like ‘filthy rich’, ‘obscenely wealthy’, or ‘bloody bankers’, just to prove that their caring is as high as their envy. #### **21. I wish…** Wishes are a more socially acceptable means of complaining that despite living in conditions perfectly capable of enabling a Good Life, you’re wasting the opportunity. Wishes are often directed at the tip of another person’s iceberg, ignoring the face that people are humans and humans don’t work like Lego. Feel free to be jealous of someone else’s life, if you want their whole life. Which you should only do if you know what it’s like to be them, rather than to have what they have. Which you can’t. So you can’t be jealous. What you wish for can be a good guide to what you want, however, because it’s usually an unexpected overlap, and usually involves a personality trait you can cultivate way more easily than you can obtain anything more material. Money without being a dick about it. Kind without being wet. Well-read without being a snob. #### **22. Just in case** The trouble with phrases well-loved by parents, like ‘better safe than sorry’, is that they get so unquestionably embedded from such a young age that it becomes very difficult to keep them to situations befitting of their pithy wisdom. There are people out there with ‘rainy day’ funds big enough to survive a Biblical flood who still panic about making ends meet. Others clutter their cupboards with more ‘on the off-chance’ stuff than stuff that actually makes them smile. Don’t be one of those people. #### **23. When X is sorted, then I will be able to do Y and feel Z** See [Rule #13](/the-book/1/1.5/1.5.3#13-beware-the-arrival-fallacy): Beware the arrival fallacy. E.g. When I start this new exercise class, then I will finally get fit, and feel fabulous; when I get promoted, then I can concentrate on…; when I get over this tough couple of weeks, then…; after I’m back from… etc. They are all self-deception. If you can’t feel Z now, X and Y are very unlikely to change that. See also [Principle #4](/the-book/1/1.5/1.5.2#4-does-it-work): Does it work? What grounds do you have for your confidence in this chain of change? Are there other people with X, but not in the state of Y? Did you apply this same formulation to past dreams? Some may have worked. Some experiences (rarely if ever material goods) really do level up our lives in a permanent way. What evidence is there that this is likely to be one of those times? If achieving Z right now were possible, what would it look like? #### **24. Investment returns (anything to do with them)** Ignore investment returns. Past ones and predicted ones. Cast all forecasts aside. When you’ve got a proper investment philosophy, they are an irrelevance. And when you haven’t got a proper investment philosophy, they’re a distraction from getting one. Investment returns are super-sensitive to the timeframe over which they’re measured (and therefore open to gross manipulation by those who would have you believe the return is part of the reason you’ve hired them), no guide to the future (which is the relevant bit for you), a proven pointless tool for comparison, and generally good only for making the wider, ultra-long-term point that there is a reward for taking on investment risk at all. Once that’s sorted, you can safely ignore all of the specifics. {% content-ref url="/pages/-MBSuA5taHZw\_0yj7F6J" %} [Storytime: The most valuable knowledge in the world](/the-book/1/s1) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[i] Friedrich Nietzsche, *Aphorisms on Love and Hate*. The full quote is: ‘In individual moments we all know how the most elaborate arrangements of our life are made only so as to flee from the tasks we actually ought to be performing, how we would like to hide our head somewhere as though our hundred-eyed conscience could not find us out there, how we hasten to give our heart to the state, to money-making, to sociability, or science merely so as to no longer possess it ourselves, how we labour at our daily work more ardently and thoughtlessly than is necessary to sustain our life because to us it is even more necessary not to have leisure to stop and think.’ # Storytime: The most valuable knowledge in the world Understanding financial-planning basics could easily be worth more to you than everything else you ever spend added together If you’ve more than a few quid invested, chances are high that you spend more each year on the management of your investments than on anything else in your life – possibly all of those anything elses combined. Chances are also high that you are completely unaware of this. The investment industry has ingenious ways of taking your money without you ever really understanding how much they’re taking nor what you’re getting in return. The best burglars operate in daylight: persuading you not only to hand over your valuables, but to thank the thief for the opportunity to do so. \* ‘It’s just so complicated!’ ‘It’s also worth £10 million to you, Megan. I think for £10 million it’s probably worth at least checking to see if it’s really as complicated as you think it is. The payoff is wildly asymmetric. If it is impossibly complicated and scary, you lose nothing. And if it’s not, the gains could be gigantic. \* As the sun is setting on my last weeks of providing financial advice to the always rich and occasionally powerful, I meet with my friend Megan, who’s finally worked out what I do for a living. Megan is in her early 30s, and business savvy. She’s also trembling. That she’s trembling because she’s *got* money rather than because she hasn’t may be odd, but it’s far from uncommon. ‘How long,’ I ask her, ‘would it take for me to learn how to do what you do? Software packages, sewing machines, whatever else it is you fashionable types need to know… not to be a pro, but to grasp the basics.’ ‘Oh, I don’t know. A couple of weeks maybe.’ ‘And were I to gain your professional knowledge, how much do you think that would be worth to me over the course of my life?’ ‘No idea.’ ‘I’m going to guess not a lot. I doubt I’d find enough regular uses to remember what you’d taught me, let alone get value from it… However, if you had *my* professional knowledge, it could be worth £10 million to you over the next 30 years or so.\[1] What other professional knowledge even comes close to those sorts of numbers?’ \* Most financial advisers are hired because clients fear missing out on an El Dorado of riches, and perceive the investing world to be a complicated and scary jungle and setting out without a guide makes it more likely they’ll be eaten than find their fortune.\[2] El Dorado and the chance of being eaten are real. But the perceptions of complications and scariness need not be. The potential value of great financial advice dwarfs even mind-bending numbers like Megan’s. But the real value lies in changing perceptions, cutting through illusions, not providing an expensive plan to deal with them. However, when you believe your job relies on certain perceptions, you’ll sooner protect them than change them. If there’s one thing that characterises the work of the investment industry it’s dressing its world up to be as frighteningly complicated as possible. Fear sells, because people will pay – often blindly – for someone saintly to slay the dark dragons and make the fear go away. Competently cutting through illusions is just so much harder than keeping everyone in the dark. Especially when it’s easier for both the adviser *and* the client. The exact things that make an adviser good make clients dislike them. Like a teacher that actually makes you do your homework, or a personal trainer that tells you the truth and forbids you cake. We want truth. Just not right now. \* ‘Do you know how much you spend each year?’ ‘About two and a bit grand a month, with holidays on top’, she says, with the air of someone whose parents inculcated a strong sense of fiscal responsibility, but who’s also never had to pay rent. ‘So somewhere between 25 and 30 thousand a year, give or take?’ ‘Something like that.’ ‘No.’ ‘I can show you bank statements if you don’t believe me’, Megan says with a smirk. ‘Oh, I believe that’s on *those* statements. It’s what not on them I was thinking of. As far as I can tell from the stuff you showed me from your adviser – and these things are designed to make that ultimately impossible – you are paying somewhere between £34,000 and £60,000 each year for the privilege of owning your investments and having someone talk to you about them.\[3] This is real money. It’s money you pay that I wouldn’t if I owned what you own. And each and every year when your other expenses are going up by inflation, this chunk is going to go up by inflation plus about 5% or so – and way, way, more if you keep making regular additions to the pot from your earnings.’ ‘Shit.’ ‘Quite. And because of the magic of compounding, over the time until you may actually come to do anything with it all, you’re £10 million – £10 million!! – down on where you could have been, without in any way harming your chances of decent investment returns,’ I say, pondering the quirk of our evolution that makes us incapable of appropriately scaling up from salient numbers such as our annual expenditure to the almost unbelievable consequences of this compounded over a few decades. ‘How does this happen, though? I thought these finance guys were smart. The idea that they’re doing *nothing* is surely a bit of an exaggeration?’ ‘They’re very smart, Megan. But some of the biggest margins in business and relatively lax qualification demands can channel cleverness into weird places.’ \* The numbers are only part of the story, however huge they are. When you spend more on a single thing than everything else combined, it should be unthinkable that anyone would be in any doubt about what they’re getting in return. And yet almost everyone is. As Rory Sutherland explains, ‘There are often two reasons behind people’s behaviour: the ostensibly logical reason, and the real reason.’\[i] The ostensibly logical reason is ‘to make my money grow faster than it would in cash, which is far too complicated to do without professional help’. The real reason is ‘to sell me certainty and appease my need to feel as though I’ve done *something* in the name of sorting out my finances.’ As if that weren’t hard enough, you’ve then got to work out if an adviser’s means of delivering this is worth the cost, is better than the alternatives. Because no one understands precisely what they’re paying, what they’re getting in return, or what other options there are, this is, of course, impossible. Clearing up this confusion is the subject of Parts Two and Three. \* ‘Tell me, Megan, what do you feel you get in return for those chunky fees?’ ‘I don’t know. I’m still trying to get my ahead around how chunky they are. And from what you said about the returns, it sounds like nothing. It’s not like I enjoy sitting through those boring meetings pretending to understand what my adviser is on about.’\[4] \[My silence says: ‘you don’t get away that easily.’] ‘It probably sounds silly, but mostly I get to not have to think about it.’ ‘Does that work? Do you not think about it?’ ‘Sort of. Except for when they send me stuff, or when I meet with them, I guess. And talking to my mum, who mentions her investments way too often. Or when money stuff is on the news – which always seems to be bad news… Actually, now you’ve asked, I think about finance stuff quite a lot… just not very deeply, because I don’t know anything about it.’ ‘All this thinking about it – and it’s certainly more than I could recommend! – is it a positive experience?’ ‘Hell no. Of course not. But it’s better than I’d feel if I had to do it all on my own.’ ‘And your time – is that worth something?’ ‘Er, yes?’ ‘If these interactions with your investments aren’t positive, do you ever think of factoring the time they take up into the return? Feels like an important cost to me. Like, if your job took up twice as long each week, you’d probably wonder if there were a better way to earn money.’ ‘No. Really, though, who does that?’ ‘Sometimes when we pay people so we don’t have to think, this is very wise. Researching exotic ailments on the internet when we’re hungover, for example: probably a really bad idea. But if we’re paying someone to think for us, they should probably be incentivised to want what we want (or at least not incentivised to want something else) and it should probably actually stop us ruminating on the topic.’ ‘Haha. True.’ ‘More to the point, the reassurance you get is exceptionally valuable. And if it cost less than everything else you spend put together each year, and millions in foregone future returns, it may not be too bad an idea to just carry on. However, it’s unnecessarily expensive at best and downright dangerous at worst. It’s North Korean reassurance: enshrine the belief that the outside world is a terrifying place, and you’ll pay with your life to be guarded from it. But what if this stuff weren’t all that complicated? What if you could confidently manage it all in 10 minutes a year before going back to something more interesting? What if thoughts of money were rare, calm, and positive? What if, in short, you could change your relationship with money so that its role in your life was one of realising – in both the sense of making real, and of becoming aware – a sustained sort of flourishing happiness?’ ‘You’ve been hanging out with the hippies again, haven’t you?’ ‘Naturally. But what if–?’ ‘You think that’s really possible?’ ‘I know it’s possible. It’s my job. I’ve seen it happen. But it doesn’t happen by changing money. It happens by changing minds. No one is incapable of understanding this. In fact, it’s entirely natural. The hard part is believing it. Which isn’t helped by a traditional preference for being ripped off over discovering you’ve been ripped off for years, and by the industry in the best place to help wanting you to believe something else. Investing can certainly be scary. There is an intimidating amount that it looks like a layperson would have to learn – and continue to learn – just to know where to begin, let alone prosper. For lots of people, learning new things is always a bit scary. But if ever there were the incentive to do a bit of homework, learning the secrets of financial advice probably possesses it. Monsters under the bed are also scary. They are not real, but the fear of them is. Turn on the lights and they go away. When you’re being robbed in daylight, you can’t turn the lights on, but can take your hands off your eyes. Fortunately, all the actually complicated stuff is completely irrelevant for you. Few children relish the first day of school. But then someone teaches you how to fish, and it all gets better. The only difference in learning about finance is that rather than giving you a textbook, you’re given a blindfold, told that the fish are sharks and are then charged a fortune for keeping Jaws away from your ankles.’ {% content-ref url="/pages/-MBJ6oY1C27dADk1dizH" %} [2: How to Have a Healthy Relationship with Money](/the-book/2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Detailed maths footnote to come \[2] There’s obviously a lot more to it than this; we’ll get to the details later. \[3] It could have been a lot worse. Megan’s investments are in a very typical portfolio put together and managed by a very typical adviser, who means her no harm. They just don’t mean her enough help. \[4] What sort of reward was Megan getting? In investment-management terms, likely less than nothing. The typical adviser-driven portfolio reliably underperforms the default buy-everything-and-forget-about-it option. If it weren’t for the fact that most people use a different default of ‘nothing’ or perhaps ‘cash’, then these typical advisers would’ve had to drastically change their business models a long time ago. \--- \[i] Rory Sutherland, *Alchemy* # 2: How to Have a Healthy Relationship with Money Because all the money and the best investment knowledge in the world will not lead to a Good Life if the thinking that shapes your relationship with money is flawed > Very many people spend money in ways quite different from those that their natural tastes would enjoin, merely because they feel that the respect of their neighbours depends upon their possession of a good car and their ability to give good dinners. As a matter of fact, any man who can obviously afford a car but genuinely prefers travel or a good library will in the end be much more respected than if he behaved exactly like everyone else.\ > – Bertrand Russell, *The Conquest of Happiness* > So many people of wealth understand much more about making and saving money than about using and enjoying it. They fail to live because they are always preparing to live. Instead of earning a living they are mostly earning an earning, and thus when the time comes to relax they are unable to do so.\ > – Alan Watts, *The Wisdom of Insecurity* > The main thing about money, Bud, is that it makes you do things you don't want to do.\ > – Lou Mannheim to Bud Fox in *Wall Street* ## What this part is about ***How we use our money, our time, and our energy is the clearest and most honest expression of ourselves. Living well, fulfilling our potential, lies in aligning this use with who we truly are. A shame, then, that we are hard-wired to give it so little self-directed thought. Expend a little energy, invest a little time, and make a lot more out of your money.*** **Making the uncomfortable comfortable and creating confidence from the core** – Money is a source of discomfort even for millionaires. Discomfort does not lead to the sort of good decisions that define a Good Life. This isn’t about learning to look, it’s about learning to see. **Taking control of your cash, rather than letting it take control of you** – Expenditure is important as a diagnostic tool of money problems not a cure for them. It’s better to be possessed by purpose than possessions. **Knowing yourself and living in accordance with that knowledge** – Revolutionise your relationship with money by changing the stories you tell yourself about it, and about you. Make your best stories better and the unhelpful ones redundant. Aligning the stories you want to tell with the stories your use of money are telling is the key to living a Good Life. ## What this part isn’t about **Numbers** – Having a positive relationship with money is more about neurology than numbers. A focus on the maths is as unhelpful as it is ubiquitous. This focus comes in many forms, most of them deviously subtle, such as the spurious depth of a concern with security or freedom. **Glamorising frugality** – This is about how to use your resources to live a Good Life, not a boring or a self-destructive one. All misers live in misery. Diets based on denial don’t work. Less is more is a pointless soundbite, which ignores the omnipresence of opportunity costs, and signifies nothing but the fury it denounces. **How to spend it** – Anyone that tells you how to spend your money is much more likely to be projecting their own prejudices and seeking to justify their way of life than they are to be enhancing yours. This isn’t about ‘goals’ in the traditional dreams-based sense. Because that sense is nonsense. You know what you want, but it’s well hidden, partly because of all those that offer specific prescriptions for how to spend, or not spend, your money. # 2.1: The Inner Game of Investing Finding the right solutions requires looking in the right places > Yet what does it really matter how rich someone is? Perhaps it is of advantage to himself at least. Sometimes it may not even be that. All the same: let us assume that it is. In other words, he will have more to spend. But does that make him in any way a better man?\ > – Cicero, *On Duties* ## What this chapter is about ***What's important about money is not how much you've got, but how well you think about it*** **It is lack of thought, not lack of money that is at the root of most money problems** – A lack of money is at the root of the problem of being poor. The very act of reading this book is a good indicator of not being poor. Beyond that, from scraping by to flying by in one’s private plane, money problems are all in the mind. That doesn’t mean they’re not real, or that they can be simply wished away. **The solution to money problems is therefore not more money, but philosophy** – Making confident and comfortable decisions about money without being beset by foreign interests or subtle addictions is easier when you follow some simple rules. Most financial coaches are interested less in teaching you how to play and more on sustaining a game you shouldn’t be playing in the first place. ## What this chapter isn’t about **Jumping into investment management** – You can manage your money ‘perfectly’ and money’s role in your life can still be negative. The relevant bits of investing are surprisingly simple, but not to the mind that thinks about money in unhelpful ways. **Providing a blueprint for living the dream** – The trouble with dreams is that they are, by definition, not real. And the trouble with ‘The Dream’ is that it doesn’t work. Because it’s never *your* dream. # Storytime: It. Never. Works. Be slower to act like the Good Life is for sale, and quicker to question if this ever proves true ‘But does it work?’ The man across the table from me – a potential new client – is fidgeting. His gaze has fallen from power-handshake high to scolded-child low. His cufflinks, which ten minutes before he’d displayed with the pride of a peacock on top of a podium that had just caught the eye of an especially elegant lady peacock, are now being fiddled with in a manner more befitting of a guilty pigeon. The silence is getting awkward. For him. I’ve been here a hundred times before. When he breaks it, he does so with determined, yet diffident, defensiveness. ‘What do you mean by “work”?’ ‘All the “stuff” you said “naturally accumulates”… the suits, the star-laden sustenance, the supercars… in the context of the “upgrades” you’re currently planning – especially given their expense – knowing if similar decisions have objectivity and undeniably improved the quality of your life feels kind of important. In short, does all the scratching ever make the itch go away?’ ‘Well…’ Guilty pigeon has become nervous turtle, only this chap’s neck has nowhere to go. ‘Let’s change tack for a second. You’ve worked all over the world, in some impressive positions in some impressive firms.’ The neck creeps into tentative extension, and the demure nod of the proud. ‘Have you ever heard business acquaintances say things like “just two to three more years”, or “when I get this next pay rise or promotion or sell the company or reach X million in the bank”, or “after we’ve finished the kitchen, bathroom, underground swimming pool…”, or “when the children have grown-up, moved out, had grandchildren…”, or “when we’ve upsized, downsized, retired… died–” ’ ‘Oh, all the time.’ ‘And I’m guessing they all end with some form of “then I can relax, be happy, dedicate time to this project, or that person–” ’ ‘Of course.’ ‘For those you’ve known both before and after such predictions, does any of that sort of waiting ever work? Do they actually get to relax, be happy, or whatever, and are their lives – to the extent you can tell, of course – objectively better because of whatever sacrifice they were making? Granted no one says “once I’ve bought the next car, artwork, fitness gadget, then life will level up”, but if they didn’t believe it, they wouldn’t do it. Unless of course they’re aiming at something other than making life better in some way.’ ‘I’m not sure it’s my place to say. I also see where you’re going with this, and I don’t think it’s quite that simple. Things like promotions and children moving out can make a huge difference.’ ‘Of course. Especially things to do with children, whether it’s being born, or moving out… they are undoubtedly world-rocking events. But not all events that feel world-rocking are, right?’ ‘Of course.’ ‘It seems sensible to check. Is something *better, all told – factoring in money, status, health, happiness, everything that contributes to a Good Life*? Or is it just *different*? As in different circumstances of life, with “goodness” of life a function of something else, something less, well, circumstantial?’ I’m not sure what to make of the silence. Thinking? Unease? Calculation of how far he’d have to reach across the table to land a decent punch? ‘Let’s be clear: I’m not saying you (or anyone else) shouldn’t build the extension or buy the holiday home, I’m just making sure you’ve thought it through. Weirdly, given the responsibility that comes with spending enormous amounts of money on a thing (because of all the other things that money could’ve been used for) it seems almost the norm that people make these huge decisions pretty snappily, and viewed through a really narrow lens, both in space – for example to impress a small coterie of other people, or while considering alternatives only in a chosen domain, e.g. Ferrari or Aston? – and in time – forgetting that life tends to span a bit longer than the next five minutes. ‘Even more weirdly, those with experience of doing similar things don’t appear to be any better at avoiding mistakes. First Ferrari didn’t scratch the itch? Scratch harder! Double down! The second one’s bound to work! Of course it rarely if ever does.’ The turtle’s timidity hits a new high. I should probably slow down. But alas, I’m on a roll. ‘Sometimes the levelling up is true. Sometimes it does work. We all have purchases that have transformed the quality of our lives. But in the context of how we think, act, and spend all day, every day, they are the exception, not the rule, and the price tag of those things has sod all to do with their successful rewiring of our lives. This holds true from Qatar to Kenya, from farmhouses to favelas, across clients, academic studies, and your friend with the swimming pool. Across everyone, in short, who’s confused “standard of living” with “cost of living” and “quality of life” with “access to comfort”. Despite each and every one of us deriving meaning and fulfilment from growth… and discomfort is the inspirational force behind all growth. ‘As for the wider circumstances in which we get to live… above the surprisingly low threshold where a bit of extra cash really can be transformative, which of course everyone you and I know is already miles above, well, they’re just that… circumstances.’ ‘This is all very clever, but aren’t we drifting a little far? Isn’t your job to choose investments?’ He did not become a client. {% content-ref url="/pages/-MBSu\_sqpGYMKkdZCnjg" %} [2.1.1: First per cent problems](/the-book/2/2.1/2.1.1) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} # 2.1.1: First per cent problems ## **The 1% is surprisingly subjective** ***You are already rich, so it’s wiser to focus not on making more, but on making more of what you’ve already got*** So you want to be rich? I’ve got great news. You already are. \* What percentage of people, were they to be granted three wishes by a genie, would use one to request to be ‘rich’? It’s easier to contemplate who *wouldn’t*. From the dynastically wealthy to the dedicated yogi, increasing the depth of one’s pockets is seen as a universally Good Thing. Yet having a goal of wanting to be rich is like having a goal of wanting food while not minding if it makes you fat, and unable to move or even breathe without pain. ‘No food’ being obviously terrible does not make ‘all the food’ obviously a good idea. Offer someone the chance to be rich but also a serial killer or a corrupt politician and no one would take it. We all understand that being rich is not an end in itself, that it's what you do with it that counts. Being rich therefore is a stupid wish. Why not wish instead for whatever you believe you’d do with the money that would make your life better?\[1] Wishing to be rich is an indication both that we believe life can be made better and also that we have no real clue about what a better life for us would actually look like. Wishing to be rich is an indication that we’re awfully confused about what it is that makes our life good. It’s also an indication that we have no idea what being ‘rich’ even means. \* What does being ‘rich’ mean? Outside of the proudly insecure, it’s rare you’ll ever meet a self-proclaimed rich person. For a decade my job was to advise ‘rich’ people, and every one of them would deny the label. The closest they’d get would be to mutter with bowed head and turned cheek something about being ‘fortunate’ or ‘comfortable’.\[2] The threshold for rich is subjective. H.L. Mencken quipped that ‘A rich man is someone who makes $100 more than his wife's sister's husband.’\[i] In my experience, the threshold for ‘rich’ is reliably about 20% or so higher than one’s current position. It may sound insane, but even people earning £1 million a year claim not to be ‘properly rich’, because the next guy – and there’s always a next guy – is earning twice that. As Morgan Housel reported: ‘Former Goldman Sachs CEO Lloyd Blankfein is worth a billion dollars. But he told The Financial Times earlier this year that he considers himself well-to-do, not rich. “I can’t even say ‘rich’,” he said. “I don’t feel that way.” ’\[ii] As Housel explains, ‘Blankfein is not even among the 10 richest people in his own apartment building.’ His short-sightedness is scarier than other people’s, but as far as his, and other people’s brains are concerned, it’s identical. It helps, therefore, to be a bit more objective: to set the threshold first. Rich, as we commonly understand it, is a relative term. We’re rich in relation to other people. What matters to us is our place on the rich-poor spectrum. This means our threshold is going to be a percentage of a given population. But what population? Household? Local community? City? Country? World? Maybe it’s not geographical. Maybe within one’s office? One’s industry? Or should it be limited by time? Currently living? Ever lived? Ever will live? We all have a propensity to compare ourselves to whichever group allows us to feel above most of those we can see, while also being sufficiently below enough others that we don’t get burdened by the responsibility of our riches or feel too guilty for complaining about the WiFi being a bit slow. Yet this feels like cheating. It’s not the place of this book to give an authoritative answer, if such a thing can even be done. However, there are some stats everyone would be better off knowing. Because if you think your problems – the ones you would wish to solve – are a result of not being rich enough, then you’re going to waste your life searching for a solution where none can be found. What makes a life good is debatable, but wasting it is definitely bad. Let’s agree that if you’re one of ‘the 1 per cent’ you’re objectively rich. So far, so uncontroversial. But let’s further agree, at least for now, that we’re all human, and therefore our richness should be determined on a global scale (suitably adjusted for relative costs of living). Still, I hope, uncontroversial. Yet this is at odds with what as-near-as-makes-no-difference everybody believes. Because believing it makes you undeniably rich, but robs you of your excuses for not doing something sufficiently brilliant on the back of it. Going global brings ‘the 1 per cent’ an awful lot closer to home. If you’re in the UK and earn £40,000 per year after tax,\[3] you’re the 1 per cent. That’s for an individual with no children. For a household of two adults and two children, a combined income of £110,000 gets you in. But the top 1 per cent feels like a foolishly high bar. You could make a case that ‘richer than the median’ should count as rich. Let’s not go that far. What if we agreed that being in the top 10 per cent still counted as objectively rich? Our household now needs to earn only £33,500. And our individual? If you pay any sort of UK income tax,\[4] you make the grade. What’s the point of all this playing with numbers? It is to remind ourselves that being rich isn’t the aim of the game. Because what use is a game where even those that have ‘won’ don’t feel like they’ve won? If it’s to mean anything at all, living well – living ‘the Good Life’ – must be open to more than a handful of humans as measured by a single dimension. Does anyone really think it the case that only a select few people from a select few countries in a select few years of human history are able to look at their lives and smile? You wish to be rich? Great. You already are. Now what? Your first idea is rarely your best idea; it’s time to think of a better thing to wish for. ## **The link between being rich and living well** ***Being self-avowedly satisfied with life and being miserable are not mutually exclusive*** Money makes the world go around, but mostly in circles. Maybe that’s why it makes everyone’s heads spin. There’s nothing wrong with wanting to be rich, or making a ton of money (assuming it’s done morally, and to have more resources with which to do wonderful things, rather than chasing the impossible dream of identifying as ‘a rich person’). But both those that chase ‘richness’ and those that denounce it fall into the trap of believing *having* riches enables *living* well. Money can lead to a Good Life, but because of how we commonly think about and use it, it doesn’t. For it is not the depth of one’s pockets, but the depth of one’s thoughts that enables the effective conversion of one’s resources into a Good Life. As we saw earlier,\[5] while being rich may make you more ‘satisfied’ with your life, after a very low point it won’t make you feel that life is Good. ‘Life satisfaction’ surveys don’t tell us a lot beyond that we all feel like we *should* be satisfied if we’ve got money, so we say we are, which, ironically, could even drive a feeling of *dis*satisfaction.\[6] What could be a good reminder to be grateful for what we’ve got more often ends up being a grudging gratitude, not a gleeful one. It’s perfectly possible to be ‘satisfied’ with a life that still feels quite miserable a lot of the time. And in the words of Bertrand Russell: ‘What is the use of making everybody rich if the rich themselves are miserable?’\[iii] This may sound obvious, or even trite, but it’s crucial to understand. The people you *think* have what you want do not *actually* have what would make your life better – one part of which is understanding this very thing. Being rich fundamentally changes nothing; it just amplifies things. If you’re to avoid amplifying unwelcome itches, therefore, you need to know how to behave if you become richer, *before* you get there. Becoming ‘rich’ usually involves big sacrifices. You need to know they’ll be worth it. More pertinently, much as we may declare ourselves satisfied because we think we should be, we can also think our relationship with money is broadly fine, on the grounds that we’ve got some. As if not needing to know how much the weekly food shop costs is the same as money playing as positive a role in our lives as it should do. Compared to a healthy relationship with money, ‘fine’ translates in the same way it does from the mouth of a moody teenager who’s just locked themselves in their room. We can all be more mature than that. Money can be the most helpful thing there is, but we negate almost all of its benefits by the way we think about it. This isn’t about the specifics of how we earn it, or spend it. Even seemingly universally ‘good’ things can be done in wanky ways.\[7] Think of orthorexia. Or spiritual one-upmanship. Or people who go to gigs and view them through their phones. The point is that money can both bring focus to our deepest values and help align our lives with them, or it can blur those values and deceive us with a trillion distractions. It does all of this while remaining inanimate, often invisible, and sometimes entirely illusory. Because in truth money doesn’t do anything. We do. It’s all on us. {% content-ref url="/pages/-MBSu\_dfwUcrGSmX90-Y" %} [2.1.2: The only way to solve money problems](/the-book/2/2.1/2.1.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Or indeed just wish for a better life and see what happens? \[2] The irony of being apparently ‘comfortable’ when talk of money turned their knuckles white and their shoulders to stone was rarely spotted. \[3] Source: Giving What We Can (). Yes, numbers will change, and yes, these can only ever be broad estimates, but the point is not diminished because of this. \[4] I.e. a shade under £12,000. The UK personal allowance for income tax for 2020/21 is £12,500. \[5] [Part 1, Section 3.4](/the-book/1/1.3/1.3.4). \[6] As Matthieu Ricard explains in *Happiness*, ‘Average satisfaction remains relatively stable because the material conditions of life in the developed countries are generally excellent. On the other hand, it is eminently fragile. Should just one of these conditions suddenly vanish — due to the loss of a loved one or a job, for instance — that feeling of happiness would crumble. And in any case, declaring ourselves satisfied with life because there is no objective reason to complain about its conditions \[…] in no way prevents us from feeling ill at ease deep within ourselves.’ \[7] See [Rule #7: There’s a wanky way to do anything](/the-book/1/1.5/1.5.3#7-theres-a-wanky-way-to-do-anything). \--- \[i] H.L. Mencken, quoted in Richard Shell, *Springboard* \[ii] Morgan Housel, ~~*The Collaborative Fund blog*~~ quoting *The Financial Times* \[iii] Bertrand Russell, *The Conquest of Happiness* # 2.1.2: The only way to solve money problems The roots of your money problems – and their solutions – are in the way your brain is wired, not how much money you have; having money isn’t the answer, being wiser with it is Money problems are mindset problems. They therefore cannot be solved with money. They need to be solved in the mind. They need to be solved with philosophy. For the doubters – and judging by our actions, we all doubt this, all the time – I urge reflecting on those pioneering souls who’ve filled their vaults with gold, and their hearts with sadness; no scientist could ask for a better dataset. In my own experience inside the heads of millionaires, living good lives or otherwise, the money was an irrelevance, as likely to highlight misery as it did merriment. Whether it was believing the next mansion would fill the void the previous one didn’t, or believing that the next million in the bank would unlock the feeling of ‘*true* financial freedom’, the one inescapable conclusion was that such beliefs were all bullshit. And despite the part of me that clearly thought *I* would be different, that given the funding my financial philosophising would equip me to rule a kingdom that was happier, more meaningful and more damned eudaimonic than anything Plato or Disney could dream of, I knew this to be wrong. If something hasn’t worked for anyone in human history, it’s not an empowering belief to think you’ll be the exception, it’s a stupid one. \* As Derren Brown wrote in Happy, ‘Our philosophy can be highly flexible and subject to great changes, but the important point, I believe, is to have one, and one that enables us to live more fully.’ Brown’s right, but I would tweak his assertion slightly: the point of a philosophy is not so much to *have* one, as to *be* one, or, better yet, to *become* one.\[1] Without a philosophy we have no default grounding guidance. In the context of living a Good Life, this is suicidal. Because we live in a world brimming with individuals and institutions desperate to infect any default void they can with their own views. As Dante wrote: ‘Renouncing the exercise of reason is renouncing existence, and so it is the same as being dead. And does not he renounce the exercise of reason who gives himself no account of the goal of his life… or of the path he ought to take?’\[i] A grounding philosophy is vital to combat the sort of incessant fiddling that characterises the worst investment approaches as it does the twitchiest supermarket-queue switchers. If you know your investments were chosen according to an appropriate philosophy, you stop worrying about whether you should be chasing this or that trend. And from a higher level, if your relationship with money has strong roots, while in turbulent times it may bend and shake, it’s far less likely to topple into catastrophe. If your relationship with money – or anything else that plays a key role in your thoughts, from your choice of career to how you treat other people – isn’t securely grounded by knowing it’s on the right path, those thoughts are liable to spin around in fruitless circles. If you add more fuel to such fires, you still won’t get anywhere, but your head will spin, your gut will growl, you’ll feel dizzy and probably a bit sick. One of the most reliable lessons one learns when studying how money affects us is that if you’re happy without money, you’ll likely be happy with it, and if you’re unhappy without it, no amount of money will change that. In the words of a former client, who had quite literally lived the Hollywood lifestyle,\[2] ‘money is just circumstances’. Lasting happiness and good living cannot be at the mercy of such changing winds. Money’s role in happiness, and even ‘life satisfaction’ more generally is mostly negative. That’s not to say it has negative value, but that it’s a safeguard against the sort of truly bad circumstances that make everything actively worse, rather than increasing the upside. It merely creates the platform from which to leap into the positive. Tinkering with interior decoration can be fun – it can even be a form of artistic self-expression – but the nearer it gets to being the chief focus of one’s energy, the more inefficient and distracting, and therefore pointless, it becomes. If you had only a year left to live, you wouldn’t spend any of it fussing about soft furnishings. You’d magically remember what potential value you have to give to the world and at least attempt to fulfil it. Which is, of course, precisely what you should do without a death sentence forcing your hand. Money works as a means, but without a meaning to serve, it becomes an end. And such thinking doesn’t end well. This isn’t simply an aspiration, it’s a responsibility. We may all, in some way, run from responsibility, but when we do embrace it, we like nothing better; it quite literally sustains us. Old folk live longer if they have a plant to care for. I don’t know, but I’m willing to bet the same effect doesn’t hold if you buy a plant, neglect it, and then just buy another one when it dies. Substituting ‘having a thing’ for ‘living wisely’ never works. {% content-ref url="/pages/-MBSuZpk490CT0oWRSEh" %} [2.1.3: Does financial advice help or hinder?](/the-book/2/2.1/2.1.3) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] This will become much clearer as we progress. Recall also the crucial difference between the having and being modes discussed alongside the Principles. \[2] And whom we’ll meet in [Part 2, Chapter 4](/the-book/2/2.4). \--- \[i] Dante Aligheri, *Convivio* # 2.1.3: Does financial advice help or hinder? The people you pay to solve money problems tend to make them worse Cultivating a better money mindset, so that we make better money decisions, and generally feel as though the whole thing is less scary and complicated, isn’t easy. Luckily, there’s a financial-advice industry set up to help us. Unluckily, it’s spectacularly bad at helping anything but itself. It’s not incapable of helping. But it’s staffed by humans, who have the same faulty wiring as everyone else, and its problems are pumped up by an egregiously misaligned corporate incentive scheme. If someone’s hired you because they think finance is scary and complicated, do you teach them it’s not really, or do you assure them that it’s more scary and complicated than they could possibly imagine? The genus Investment Guru contains several species. Each one has the opportunity to make your life better. Each one usually – but not always – does the opposite.\[1] The ‘Manager’ species says it’s all about money. In their eyes, you are your money. If anything, *you* get in the way. They pick stuff to invest in, you can come along for the ride, but do please try to stay out of sight. The Manager’s way of making your life better is to send you a letter every now and then explaining why their views on the future prospects of company X or country Y are so much better than the aggregated views of everyone else in the world that even after paying an enormous fee for their enormous wisdom, you’ll come out ahead.\[2] Depending on your own status (i.e. how much money you have), you’ll also be treated to a royal welcome in an oak-panelled room a few times a year to hear some lies about ‘current market volatility’ and imaginary correlations between the forecasted fortunes of certain subsets of the world’s companies and the electoral prospects of certain political parties. The ‘Adviser’ species says: ‘I’m on your side.’ They’ll reassure you that you are more than your money. They’ll talk about how wonderful it must be being you, among other things you like to hear. You’ll agree, then together you’ll interrogate the performance of the Manager. This is a wise move on the Adviser’s part. Because if you’re willing to give each Guru (be they Manager or Adviser) a few chances to prove themselves, then where you may give a Manager two or three years, say, you’ll give an Adviser two or three goes at picking a Manager (and thus maybe nine years) before you get rid of them. The ‘Planner’ species is at times indistinguishable from the ‘Adviser’. They’re also on your side. They also appear to be more interested in your life than your money. The difference is that the Planner actually believes this. They like to play psychologist doctors and counselling nurses. They really do derive more value from talking about your children’s or grandchildren’s education and your holidays than ‘boring investment stuff’. However, the centre of a Planner’s world is still the numbers,\[3] and the conclusion of a planning process is often to live as expensively as possible, thereby tacitly at least equating ‘quality of life’ with ‘cost of living’ and overlooking the fact that ‘not spending enough on myself’ isn’t ever a regret of the dying, but ‘not being true to myself’ definitely is. Ultimately, when it comes to the sort of advice that’s likely to help you flourish, they’re all the same.\[4] Your blindness is their lifeblood. If you believe that your blindness is an unavoidable burden, and if you believe that while it can’t be cured, it can be managed with magic pills, then the market for confirming your fears is going to dominate the one for teaching you that there’s nothing to be scared about in the first place. {% content-ref url="/pages/-MBSuY-vopS78m-OzeJa" %} [2.1.4: How to stop financial rumination](/the-book/2/2.1/2.1.4) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] We’ll see how to find your sunny-sky allies amid the charcoal blanket of villainous clouds in [Part 4: How to Get Help that’s Actually Helpful](/the-book/4). \[2] Not that the letter will actually explain how enormous those fees are, of course. \[3] Recall ‘What other investment books miss’ from [Part 1, Section 2.3](/the-book/1/1.2/1.2.3). \[4] I use the most generic ‘adviser’ throughout the book, except where I’m referring to actions only really taken by ‘managers’ or ‘planners’. # 2.1.4: How to stop financial rumination Becoming wiser with money requires you to first stop your head spinning in ruminatory circles There is a rule in coaching and negotiation circles that ‘why’ questions are a bad idea. A ‘why’ question should be rephrased as a ‘what’ question because ‘why’ questions risk sounding accusatory and putting the receiver on the defensive. This is entirely true. However, in introspective interrogations, there’s another reason ‘what’ questions are better: they make it much harder to get trapped in a solutionless centrifuge of rumination. ‘Why can’t I do this?’ inflames itches that ‘What is it about this I’m struggling with?’ starts to soothe. ‘What about this is important to me?’ demands the sort of answer that ‘Why do I bother?’ is set up to forego in favour of wallowing in sticky self-pity. This book is an encouragement to turn whys into whats, and then to persistently pursue answers that unlock hitherto unknown levels of comfort and confidence with managing money. It’s about moving from ‘why must investments be so complicated?’ to ‘what is it about investments that I want to understand better?’ or ‘what do I need to know to be able to trust that the advice I’m getting is as helpful as it is well-meaning?’ It’s about recognising that if you walk around blindfolded, then someone will always be happy to sell you directions, and that when scruples are optional, if you don’t know where you’re going, you won’t know when you’ve been taken for a ride in the wrong direction. It’s about removing the blindfold and stepping into the light, fit to first find your own path and then to skip happily and confidently along it. It’s about not dwelling on money problems, but methodologically moving towards solutions to them. If you don’t pinpoint your concerns – if you don’t move from ‘why?’ to ‘what?’ – you’ll jump into getting help that’s simply not very helpful. And you’ll continue to get stuck in rumination rather than moving to resolution. This is a suicidal waste of your life’s resources. ‘Regardless of the possible number of computations our brain is capable of,’ wrote neuroscientists David Perlmutter and Alberto Villoldo, ‘the truth of the matter is that most people use most of their computational ability to dwell on everyday problems. This waste of a good brain leaves hardly any computational power for innovation, creative problem solving, and enlightenment.’\[i] As we saw earlier, there is no shortage of personal finance books that set out in sane, user-friendly steps how to manage your money. However, if you don’t manage your mind first, it’s perfectly possible, almost perhaps inevitable, that you can manage your money in textbook fashion and still have the very thought of that money do nothing but cause you discomfort, and detract from the goodness of the life it should be enabling. The point of this book isn’t to tell you which investment is the best,\[1] or to tell you to use or not use any particular type of investment guru, just as it isn’t to tell you how to spend (or not spend) your resources. It is to encourage you simply to think through these and other aspects of your relationship with money and how it can contribute to or distract you from your Good Life. It is to provide frameworks for thinking that cut through the crap (and there’s a lot of crap), and to know how to see true value in a world blinded by price. It is for you to learn how to advise yourself, even if you then delegate the donkey work (and to learn how to not delegate it to an actual donkey). {% content-ref url="/pages/-MBJ8aefyTojDWCnYlqv" %} [2.2: Misunderstandings and Lethargy](/the-book/2/2.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] There’s no such thing, as we’ll see in [Part 3, Chapter 4](/the-book/3/3.4). \--- \[i] David Perlmutter and Alberto Villoldo, *Power Up Your Brain: The Neuroscience of Enlightenment* # 2.2: Misunderstandings and Lethargy Our most pressing money problems are caused by ignorance and indolence, not idiocy > Misunderstandings and lethargy perhaps lead to more complications in the affairs of the world than trickery and wickedness.\ > – Johann Wolfgang von Goethe, *The Sorrows of Young Werther* ## What this chapter is about ***Our relationship with money – how we connect money to who we are and what we value – is prone to systematic mistakes*** **Prioritising the right money models** – To think the right way about money with effortless effort relies on models that allow us to both frame and focus on what matters in complicated decisions. Focusing on what matters by default doesn’t happen by accident. Models allow us to execute a complicated redrawing of how money is mapped in our brains in an effective, efficient way. Expenditure is more important than income. Enough is more important than more. Value is more important than price. **Unknow thyself first** – The first step to adopting a new map is recognising the shortcomings of the old one. Empty your cup, so it may be filled. Empty your map of warnings of dragons. Fill it by learning how to examine the expression of your expenditure, and the value of things to you, not the output of the world’s demand and supply equation. All purchases are investments, so be sure you’re making good trades. ## What this chapter isn’t about **Being a miser** – This is not about telling you to spend less, or even what to spend your money on at all. It’s about not confusing standard of living with access to comfort. If reducing expenditure feels like a sacrifice, rather than a freedom, you’re doing it wrong. Don't forgo fun. Be clear on what fun really looks like when you’re unattached to addictions. Delaying gratification is a flawed premise. Don’t resist impulses. Cultivate better impulses… by understanding that you had the best impulses all along, until the weeds overwhelmed them. **Buying the answer** – Anything in financial advice that ends with a solution for sale (be it a special financial product, or a diet pill) started with a badly formulated problem. Don't pay to avoid problems that either don’t, or needn’t, exist. # Storytime: Doubling down Even ostensibly value-driven decisions can be misleading if they are not thought through ‘Do you have a rough idea of how much you spend on, or because of, your children?’ The husband looks surprised. He’s come armed with spreadsheets and the sort of job title that, refusing to be constrained by a business card, seeks to colonise the air in every room it enters. But his spreadsheets don’t know the answer to this question. I look at the wife to remind her that she’s allowed to play too. The wife looks at the husband. The husband looks around the room. ‘I guess it must be a couple of hundred,’ he says. ‘Three sets of school fees… These are undoubtedly “peak” spending years… all three in school… a nanny is a necessity because of our jobs… we’ve visited my parents – their grandparents – in Australia a lot too.’ ‘Good guess! It’s about that. More pertinently, how much of your earnings does that represent?’ ‘Well it must be about double.’ ‘Last year, according to your own figures, your children accounted for £457,000 of your earnings before tax. And that’s before considering their effect on your second biggest expense – your mortgage. It’s probably fair to assume that you wouldn’t live in such a big house if you didn’t have three children.’ ‘True. Wow. Sounds a lot when you put it like that.’ ‘How else would you put it?’ ‘I guess we just wouldn’t. I tend to think of the ins and outs as more of a monthly flow–‘ ‘Rather than a finite lifetime pile of resources? Most do.’ ‘This room is the only place we address these sorts of questions–’ says the wife. ‘It’s great to do so,’ interrupts the husband. ‘They’re obviously so important, but between work and the kids and what’s left of each weekend–’ ‘–and worrying about work even when we do get time to think,’ says the wife, the recollection triggering a shudder that starts at her shoulders and works all the way through the hefty boardroom table. ‘Completely understandable,’ I say, tactfully not screaming: YOU SPEND 90 HOURS A WEEK AT WORK, HOW CAN YOU NOT STOP AND THINK A BIT HARDER ABOUT IF IT’S WHAT YOU WANT TO BE DOING? ‘The key is… you’re not spending for the sake of it (I hope). And while it’s great – superb, really – that your spending is largely aligned with your core values, in this instance being great parents, my job is to help you think things through to ensure that not only are you living in accordance with these values, becoming who you are, fulfilling your potential and all that, but also that you’re doing so in a way that’s effective and burrows well below the surface. ‘So, hypothetically, could you meet the value of being great parents for less? In a way that would leave you more to “spend” on other values… I use quotation marks, because it could be that you “spend” time not being at work, or “spend” mental energy on calmness by doing a job that you didn’t – in your words – “hate”, that you \[peeking at my notes] “felt in your heart rather than your neck”, that allowed you to actually see your children more, and “be more present” – and less on-edge – when you did. ‘And, less directly,’ I continue, speeding up with the fear that I’ve said too much already, but have an irresistibly important point twitching on the tip of my tongue, ‘do you think you risk instilling in your children the idea that a “high standard of living” or perhaps even “work” in general, must be boring, painful, unloveable, even? To quote every tech start-up’s favourite guru, Paul Graham, “A parent who set an example of loving their work might help their kids more than an expensive house.”\[i] I’d argue it’s at least worth contemplating whether good, smart, people like you can achieve their parenting goals without spending 20 times the average UK salary each year to do so.’ \[Pause for effect… while wondering if I’ve poked a bit hard this time.] ‘When we first met,’ I continue, in response to heads trying to scratch themselves with eyebrows, ‘you said you wanted to retire. Well you can. Yesterday. But it would mean pulling your children out of public school, living somewhere worth “only” £1m – so matching your equity, not your equity and your borrowing. Maybe not flying first class…’ That’s enough for now. Silence descends. Silence grows slightly awkward. Digits start to fidget. Even the table feels tense. Left unchecked, we’ll soon be in disastrous-first-date territory, shifting and squirming and soliciting of divine intervention to just make it end. It’s a dangerous play for a professional relationship. Let it sit. Let them squirm, I tell myself. If this isn’t important, nothing is. ‘It’s amazing,’ the wife says, fighting back tears with mixed success, ‘it’s amazing to think that we could spend that much in the name of being good parents and actually be… be… do a worse job of parenting because of it.’ I make some reassuring noises about going easy, about even the best parenting intentions struggling in such a situation, about focusing not on what’s been lost, but what’s been learned, and what’s to be gained. About responding to the uncontrollable circumstantial challenges, not with direct attempts at remedial action, but with environmental control. About aiming not for lower stress and lower shoulders, but for the sort of environment that ensures such things as side-effects. About not being told what to think, but heeding being told just to think, and trusting the rest to look after itself. What would be lost by quitting? What would be gained? What confidence is attached to each? What would be irrevocable? What could be learned? What could be unlearnable any other way? What’s worth more: wealth, health, money, posture, time with children, or toys for children…? ‘You know what the craziest thing is,’ the husband says, ‘I’d always… sometimes… well, in the sort of circles that come with this sort of job… while no one really talks about spending specifically, we do talk a lot about it generally… those hints that pretend to be subtle but really aren’t… and it’s always to brag about how much has been spent, not how much one has got in return.’ My cold financial heart lives to be warmed by these moments. ‘That’s possibly in the top three things I’ve ever heard a client say. How much more beautiful all our worlds would be if people remembered that the goal is living a *Good* life, not an expensive one.’\[1] {% content-ref url="/pages/-MBSuyREWdI20LO\_T9me" %} [2.2.1: Expenditure is more important than income](/the-book/2/2.2/2.2.1) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] See also this from Lynne Twist in *The Soul of Money*: ‘Our three young children \[…] were the center \[sic] of our lives, or so we thought. Our marriage and our relationship with our children were the most important things in the world to us, or so we said. Yet, if someone had filmed us during this time and looked at it objectively, they would have said – No, they don't care about the children. The kids are with the nanny, the wife is always off on these boondoggles with her husband, or shopping or entertaining, and they're missing out on the most important stages of their children's development, seeing those first steps, being there for good-night stories, kisses, or the spontaneity that builds relationships. They're able to purchase child care and purchase toys and a great house, but even when they're with their children their heads are spinning with what they need to do next to achieve financial goals or demonstrate to their friends that they know how to be facile with the emerging experience of wealth. We felt we were sincerely devoted to our children, but if you looked honestly at how we actually spent our time and energy, you'll see that our actions were not consistent with our intentions.’ \--- \[i] Paul Graham, ‘[How to do What You Love](http://www.paulgraham.com/love.html)’ # 2.2.1: Expenditure is more important than income The importance of your finances lies not in the numbers, but the life choices they symbolise One of the aims of this book is to get you investing like a non-idiot. To invest at all requires ‘saved’ money.\[1] Savings are built up by income, and worn down by expenditure. So that is where we’ll begin. How we think about income and expenditure is also the clearest illustration of the problems caused by believing money is about numbers rather than narrative, about having stuff rather than a participatory process of becoming, and how we get stuck in these deceptive false beliefs because of the temptations of unthinking over slowing down and thinking things through. {% content-ref url="/pages/-MBUSUTgasA0esikA1JK" %} [2.2.1.1: Universal basic instincts](/the-book/2/2.2/2.2.1/2.2.1.1) {% endcontent-ref %} \--- \[1] ‘Saved’ being apt wording to describe redirecting your money from the dark internal and external forces that would keep you from your Good Life that we’ll look at in the coming chapters. # 2.2.1.1: Universal basic instincts Instinctively, everything points towards income being more important than expenditure, but this is a deception ## **Instinctively, income feels more important than expenditure** ***We focus on income over expenditure for several sensible-sounding reasons*** ### The stories Upon meeting a financial adviser, the typical client cannot wait to brag about their income. They are less likely to crow about their aggregate expenditure, though are happy to estimate it when asked, because it supports the story they want heard about how much they earn, and therefore how justified they are in trying to touch the ceiling with their sternum. Asking for a breakdown of that expenditure, however, causes sternums, shoulders and speech to shy away in search of a sharp change of subject. Clients and advisers gush over income like a new-born baby, while treating expenditure breakdowns like a trespassing spider. Of all the pieces in the initial information jigsaw that marks the start of a new adviser-client relationship, the expenditure breakdown is always the last one to be slotted in – if indeed it’s not declared eaten by the dog and gleefully abandoned altogether. It’s not the homework, but what it reveals that’s unwelcome. I learnt the hard way that asking someone to contemplate what their spending says about their life inspires more terror than asking them to contemplate their or their partner’s possible death.\[1] This mismatch in motivations mirrors how we treat the ins and outs of our cash-flow in a wider context. \* For income and expenditure there is both a number and what we think it says about us. There is the salary and the job title, the budget and the piles of stuff… and the contribution each makes to what we think others think about us.\[2] Try divorcing the numbers from their meaning and you’ll realise you can’t. The way we treat the numbers and the signals they supposedly send support the notion that intuitively, when it comes to corralling one’s cash in the service of living a Good Life, income feels most deserving of focus. Consider both the way we talk about our monetary ins and outs, and how we count them. In the civilised world, and outside of an adviser’s office, one never talks directly about one’s income number. But indirectly, one cannot escape its influence. When it’s high, we can’t help but hint at it, especially when it’s just gone up. When it’s low, we shy away from revealing how low, complain about being repressed by The Man, or lie. And given the chance to find out someone else’s salary on the sly – say, an unguarded HR spreadsheet, or a media exposé on public-institution paygrades – who can resist the sirens’ call for a surreptitious peek? When we talk about expenditure, it tends to fall into three categories: a) the big one-off humblebrag (the ‘it wasn’t cheap, but…’ or the ‘it should be, given how much it cost’); b) the regular first-world-problem ‘chore’ (e.g. the cost of children, architects, or constellation of Michelin stars); and c) the it’s-okay-because-it-was-a-bargain (this can be a bargain of the poundshop or designer-clothes outlet variety, the latter often being combined with the one-off humblebrag). Importantly, in each case, what we’re talking about is not our expenditure, but our income. In each case, the focus is on the price of things to the world, rather than their value to us.\[3] It’s a blind substituting of numbers for narrative. Yet spending blindly does not contribute to anyone’s Good Life. Spending wisely contributes to everyone’s. There is arguably no clearer sign of someone ruining their life than bragging about how much it costs them to run it. So that cannot be what we’re doing. We’re not talking about the cost, but our ability to meet it, and what that, in turn, says about us. Unfortunately, we’ll see in the next section that what it says about us is also bollocks. ### The maths As well as its influence on our talk, income also holds greater sway over our actions. The traditional model of financial freedom is a simple one: save enough so your money can do your earning for you. ‘Make working optional’ is a tried-and-tested adviser sales pitch. The time taken to do this exists on a spectrum. Ignoring other circumstances, if you save 100% of your income, you are already there and need to work for no more years. If you save 0% of your income, you’ll never save anything, and need to work forever. If you save about 80%, you need to work for about four years. If you save about 10%, you need to work for about 50 years.\[4] When it comes to saving, there’s obviously more scope for earning more than spending less. You can always earn more, but cuts can only go so deep before important bits start falling off. Of potential sources of savings, therefore, income can be seen as infinitely superior. Because salaries tend to rise as if set by a ratchet (i.e. they fall with a lot more friction than they rise) and because your current salary is such a strong anchor for your next one, any young careerist is advised to prioritise negotiation skills over job skills. This last assertion is certainly true. The other points are probably not. ## **Instincts often lead our wallets hopelessly astray** ***The reasons to focus on income over expenditure may be tempting, but they’re wrong*** The traditional model of financial freedom on which the above instincts are grounded is flawed. For it to work, money must be about numbers, not narrative, its value to you must be about having not becoming, and its purpose to ease unthinking, not inspire thinking. None of these is true. In each of the ways we talk about income, we signal our belief that the number is a sign of our worth; that it is, in some way, *us*. Why shy away from salary discussions as vulgar, but try so hard to hint at their height or their increase, if not to suggest that each are inherent markers of our value? And that’s before even considering the sacrifices of health or relationships we made so we could do such hinting. Making excuses for low salaries shares the same psychological source. Consider too the unthinking ease with which we throw around phrases like ‘done well for themselves’\[5] when mental or physical or even *life* *well*ness could be precisely what the subject of the comment has given up to have you utter the phrase (usually out of their earshot). In terms of expenditure, we’ve seen that humblebragging, first-world-problem complaining, and bargain-snapping are all ways of signalling our income. But it goes further. When we signal our income in this way, we’re equating income with intelligence, our ability to be a general problem-solving maestro.\[6] We are trying to meet our goal of ‘being’ intelligent by ‘having’ acquired certain material possessions (or ‘having’ a high salary). This is one of the fundamental flaws in our relationship with money – a major self-deceptive block to using the power of money for good in our lives. On the surface, this is ridiculous. In every other walk of life, intelligence is signalled by putting in less effort for no shortfall in the quality of output – doing something more quickly, more neatly, more efficiently, or more elegantly. Yet when it comes to living a Good Life (which is the only thing we should ultimately care about), we act as if achieving it for £10,000 per month is better than doing it for a tenth of that. \[7] The evidence of those spending the most is undeniable – their lives are not ‘better’, just more expensive.\[8] Yet our actions continue to exhibit our belief that money inherently signals worth (even if – often particularly if – we preach the opposite). Many may agree in principle with Confucius that ‘To be concerned only with one’s salary is shameful’\[i] but remain wired in such a way that in practice all worries lead to wages,\[9] and thereby conclude that they’re too busy to be concerned about anything else right here and now, including, of course, the fact that ‘right here and now’ is where they always are, while their dreamy future is neither here nor there; no more than, to paraphrase F. Scott Fitzgerald, a phantom chase after a dream’s shadow.\[ii] The source of our income is a major building block in the edifice of our being, advertised as if it were something we are, rather than something we have. When we hear ‘what do you do?’ the second half of ‘…to earn money’ is so well understood that it goes without saying. We could mean ‘what do you do… with your time?’, or ‘…that makes your energy soar?’ We just don’t. And unless you’re a spy or a spiv, most are happy enough to be asked. In some parts of the world (hi America!), you don’t even need to ask because it’ll be volunteered long before such concerns as family, or fun. Let’s not forget either the millions that take and continue in jobs they don’t like simply for money they won’t ever spend. Everyone knows someone who is most commonly described with reference to their earnings.\[10] \* As covered earlier, viewed through our ‘turning resources into Good Life’ lens, having a healthy and helpful relationship with money relies on knowing thyself and allocating one’s resources in accordance with that knowledge. The thyself to be known is our ‘centre of narrative gravity’ – the story we spin about who we are from the internal and external circumstances we are constantly interacting with. Both our income and our expenditure are inputs into this story. But when we try to turn the number of either into a narrative, we sell ourselves short, for we are telling ourselves that ours is not a story of becoming, but of having (or being had), that our worth is a replaceable commodity, and that our unique potential isn’t so unique after all. It is because the ultimate benefit of both our income and expenditure lies in their being inputs into our stories that expenditure is of far greater importance. Living a Good, flourishing, flowing, potential-fulfilling life relies on aligning the story you *want* to be telling with the one your actions *are* telling. The most reliable expressions of your actions are the decisions you make around money. And while the income side of the story can be tricky to shape without significant time, effort, and all sorts of other consequences (including plenty of unseen ones) you can take control of your expenditure instantly. The more fragmentary nature of our expenditure decisions may be part of the reason we do not so easily keep track of the aggregate in our minds, but it helps when it comes to making changes. Our expenditure is perfectly designed for just the sort of brain surgery we want to be performing. ## **The limits of no limits** ***There is greater scope for saving more by earning more rather than spending less, but it’s a misguided direction to go down*** ### Earning big to justify thinking small The argument that none of this really matters if you can earn the sort of money that makes the tax-return calculator build up a sweat and turns your most insecure friends crimson with envy is too strong to simply brush aside. It’s true that there is no limit to how much you can earn, while there is to how little you can spend, and an awful lot of people are right up against that lower limit already. Of all the places where focusing on the numbers rather than the narrative feels like the thing to do, this discrepancy feels like it. Our expenditure may be worthy of more focus in our storytelling, but that doesn’t mean we can’t also seek to supercharge our salaries independently of this. Especially so, we may think, because if most jobs are kind of pointless, we may as well pick whatever profession we can wring most convertible resources from, and deal with converting them into a Good Life when we’re outside of the office. Problems arise when we believe – because we believe money is about the numbers –that the Good Life is the more expensive life, and that earning loads leads to needing to think about what we do with it *less*, not more. Outside of actual poverty, there is no good reason to link expenditure to income, and yet everybody does it. It’s a huge error; an infallible sign of an idiotic relationship with money. Regardless of the maths, it’s important to note that focusing on increasing your income can be done in a hugely positive way. Income increases that arise from building a business that’s a vehicle for distributing your creative potential to the world in a valuable-enough way for the world to reward you for it is a beautiful thing. There is only good to be said for monetising your potential for helping the world in a way that only you can. In addition, the art of salary negotiation is undoubtedly one of the best things to learn, especially early in a career. Not only because small salary differences compound into enormous differences in lifetime earnings for the exact same input, and because your next salary anchors so heavily to your previous one, but because whatever you do, you will always be selling (negotiating) something. And if you can sell well, you’re instantly more valuable – including to the person you’ve just persuaded to pay you more (provided they put those skills to use, and assuming you’re negotiating to take home more of what you’re worth, rather than to spin a web of deceit).\[11] Transferable knowledge beats transitory knowledge, and selling is the most transferable skill there is.\[12] However, this positive way is not the common way. ### The maths revisited Let’s take a closer look at the maths. The evangelists for each extreme – the earning maximisers and the spending minimisers – know the maths well. What do they have to say? The earners talk of infinite upsides, and point out that trying to save for retirement by cutting down on coffee and avocado toast is like trying to save the planet by unplugging your phone charger. The savers dream of Eden, or Walden, and point out that there’s a limit to the amount of people that can earn the megabucks that make ignoring expenditure even theoretically possible. The earners think there’s a level of income that renders one’s level of expenditure irrelevant. They think lifestyle creep – spending based on income, rather than on what makes life better – is a thing that happens to other people. Yet just about all high earners I’ve ever met, be they friends, clients, or the paragons of this parable, the people I met while ‘living’\[13] in Qatar, prove the opposite. Lifestyle creep strikes hardest at the keenest income maximisers. It has to: their narrow worldview that the numbers are all important guarantees it. Those most driven to earn the big bucks are driven by a desire to spend big bucks. And those most inclined to evaluate lifestyle wants via cost, rather than costing their lifestyle wants first are by definition those most susceptible to the creep. Many a tax-free Gulf-dwelling ex-pat manages to earn, often even outright *save*, a million in less than a decade. However, their annual expenditure ‘needs’ can jump from 20,000 to 120,000 at the same time, while they’re still the trim side of 30. This catapults them onto the well-trodden road to the sort of money troubles that beset so many entourage-laden professional athletes. Couple compounding with lifestyle creep and the biggest hindrance to traditional financial freedom is developing expensive addictions in one’s 20s. Even worse than normal lifestyle creep is leveraged lifestyle creep: not only spending more when you earn more, but spending more when you merely *expect* to earn more. Pre-termism is even worse than short-termism. As Professor Dolan notes: ‘The gains from increases in income can be completely offset if your expectations about gains in income rise faster than does income itself.’\[iii] Optimism can open-up opportunities, but blind optimism can be oppressive. The earners know the compounding effects of early investing. They know, for example, that if you invest £1,000 each year between 20 and 30 and then stop and let it grow,\[14] versus if you invest the same £1,000 p.a. from age 30, it would take about 50 years for the second pot to catch up with the first – and cost you about £50,000 rather than £10,000.\[15] The savers know the compounding effects of lifestyle choices. They know that what looks like isolated expenditure decisions never are; nothing is a one-off, because everything is a lifestyle choice. And while you may call something an exception, your neurons know better. Their strength gains are indifferent to your claims of each bead in a string of ‘one offs’ being an exception to who you ‘really’ are. If your mental connections say you can’t bear to see cake go unloved, you are no more ‘healthy on the whole’ than an LA waiter who spends more time serving than on the stage is an actor. Seeing the world through a lifetime lens acknowledges that we buy not things, but a lifestyle. Choosing to dislike public transport, say, and taking taxis everywhere instead, is choosing to need to earn thousands extra each and every year (not forgetting the tax on that too) instead of using such journeys as a chance to get lost in a book, or learn a language, or balance on one leg, or meditate, or… well, you get the idea.\[16] This sort of deception can be subtle, in the way most dieters deceive themselves with ‘treats’\[17] that feel like exceptions even when they happen every other day. The cost of a new pair of jeans (or ten pints) when one’s feeling a bit lost isn’t ‘only’ £50. It’s the accumulated cost of every single item you buy to scratch an emotional itch. Paying £20 for a luxury version of something where the functional version costs £10, when done because you identify with the luxurious lifestyle represented, doesn’t add £10 to your overall spending, it doubles it. Forever. And given the track record of ‘having’ material possessions in meeting the ‘being’ needs the mindset that inspired them is chasing, what happens is you not only double the cost of your living, but do so for zero sustained increase in the quality of it. The earners espouse a version of ‘live fast, die young’, albeit confusing living expensively with living fast, and ignoring life-expectancy statistics. The savers acknowledge that increases in income may build a big pile of cash more quickly on the way up, but sustained reductions in expenditure do that *and* help you eat into the pile more slowly on the way down. Because lifestyle choices compound, and because people are living longer, the proportion of your life spent earning versus that spent spending is a good guide to the relative importance of each. And since life expectancy overtook the standard retirement age in about 1950, most people earn for less time than they spend – none more so than those most focused on some form of early ‘retirement’. There are many good reasons to buy a thing; the level of our income is not one of them. It is a literal waste of resources to no good end, and if you are wasting your resources, you are wasting your life. If you treat life as a mad rush to build as big a pile as possible as quickly as possible, before swapping stress for therapy to deal with the effects, you overlook both the facts that if you have value to give the world, then the world will very likely reward you for it, and that the Good Life for which you are doing the rushing is not a destination. ### Earning big demands thinking big The earners and savers both make valid points, but each extreme misses the main point that managing your money isn’t a numbers game. Not only can you play with the variables (income, salary growth, expenditure, inflation, investment growth, etc.) to make either income or expenditure look like the most important number, but whatever variables you use have to be put in context: the Good Life is always more than the sum of its parts. If using the power of money for good were about the numbers, I’d settle for sharing a few spreadsheets, and forget about the encouragement to think beyond them. Rather than changing the variables, you’re better off changing the view, bringing your mind to your money, rather than letting your money ambush your mind. For every person that manages to rise within a money-making industry while saving and investing their way to ‘freedom’ and then using that freedom for whatever morally delicious and life-enhancing purpose they won it for in the first place, there are thousands that instead simply sacrifice the best hours, and best creative energies of their lives to buying a slightly nicer suit than the person at the next desk along. Some really can work surrounded by mindless spenders and ignore their influence, maybe even still get promoted by boss-level mindless spenders despite having nothing in common with them. Some really like the jobs. But not many. And the few who do make it work would’ve most likely made it work without the money anyway (especially when high-paid usually means more hours and more stress, so you get less time to spend doing what you do actually like, and like it less when you do). If the get-in-get-out approach worked, you’d never see anyone working in the City over the age of 40. Or any retiree with sedentary and stress-related health problems. It’s possible to believe both that making the most of your earnings potential and making spending choices driven not by that earnings potential, but by your life’s potential are good things to do. It’s also possible to earn your way out of short-sighted financial trouble and in doing so make your life worse. Vanishingly few pay attention to the breakdown of their budget in private, let alone in public. Some, in the tribe of the extreme early retirees, focus more on their savings rate than their salary. Next to no one attends with equal vigour to how the allocation of their resources, be it towards a title, retirement, parsimony as an end in itself, or gout, aligns with their narrative nirvana. Take control of the alignment of your expenditure, however, and regardless of what’s going on with your income, you can be satisfied that you’re serving your story. ## **Comfort and confidence** ***Comfort and confidence with money can come only from becoming wiser with money, not from becoming richer*** ### Orthotics is bullshit We’ve seen that being led down self-deceiving paths because of a combination of numbers over narrative, having over becoming, or unthinking over thinking does not take us towards our Good Life. Despite this ultimately insane wasting of resources, each of these in-the-moment errors is eminently understandable. The better we understand our momentary motivations, the better we can set ourselves up to not be led astray so easily or so often in future. In all financial decisions we are seeking comfort and confidence with money. In a profoundly important way, we want to become wiser with money, to feel this comfort and confidence within us. But becoming what you want to be when the very thing that will help you is the very thing you are seeking is not easy. As we saw earlier, from Plato’s cave to rewiring your brain, the earliest steps in the process of becoming wiser are the toughest to take. Not least because the unthinking moving walkway of the numbers-based having-mode path also advertises comfort and confidence, and it does so with much better marketing and promises of much quicker results. Yet it’s heading in the opposite direction. And going more quickly the wrong way is a terrible idea. Not all sources of comfort and confidence are created equal. Comfort and confidence can come from dark or light; from ignorance or understanding. This book is about moving out of the misleading short-term comfort of the dark, and into the long-term light. Because the unthinking path doesn’t work. The clearest prescription for better financial decisions is pointless if the very idea of money still leaves someone shaking with fear and confusion. If what we did already worked, we’d be well-advised to not worry about the philosophy, to dismiss the psychology and the neuroscience as too clever for its own good, and jump on the moving walkway. True comfort and confidence with money comes not from money itself, nor from delegating the decisions about it to an external source. It comes from somewhere much deeper, and more secure: from comfort and confidence rooted in your centre of narrative gravity – in your story. Unfortunately, when viewed through a narrow lens, external comfort not only looks the same as internal comfort, it looks better. Many people, having outsourced care of their skeletal health to the dubious anatomical expertise of heeled shoes, desk chairs and sofas, live their lives in posturally unsound positions. When they do have to hold themselves in shapes more traditionally becoming of a human, it hurts. Many a short-term solution has sprung up to help ‘heal’ this hurt. In the short-term, it’s simply far more effective to get comfortable in the bad position than it is to rediscover one’s innate human strength in the good one. Yet foot problems are worsened by orthotics, not solved by them. And mental orthotics are more devious, more deceptive, and more dangerous. The can of discomfort can be kicked down the road only so far before it ends up in pain. If instead you stop and deal with it, you end up growing. How you deal with discomfort – whether you end up in chronic pain or whether you grow – is the fundamental determinant of the ultimate Goodness of your life. Wrapping something in cotton wool doesn’t protect against decay, it just protects against seeing it. And refusing to look at something doesn’t mean it isn’t there. In the name of certainty, we narrow the scope of the universe of situations in which we’re comfortable, but this doesn’t make it smart. Far better to expand that universe, be it by letting your feet be feet, realising it’s possible to use public transport without contracting leprosy, or seeing that homeliness isn’t a function of square footage. Or, in this context, in deriving comfort and confidence from the firm foundations of understanding, rather than the shakier ground of your internal spin doctor. ### Local and global maxima `DIAGRAM TO COME` For many problems, there is both a ‘local’ and a ‘global’ maximum, a basic solution, and a more advanced one. Think of them as two peaks in a mountain range, one higher than the other, except the higher one cannot be seen from the summit of the lower. It is possible to get stuck on the lower peak, the ‘local maximum’ and believe you have discovered your solution. Yet this may not be true. There may be a higher peak, a ‘global maximum’, a better solution, but to find it requires climbing down from your proud position, which many are reluctant to do. As Jon Elster wrote, ‘Because of its obeisance to the pleasure principle, the unconscious will always be stuck in a local maximum.’\[iv] The traditional numbers-based model of personal finance frequently gets stuck on local maxima. When you: a) need to actively think things through to be able to even see the global peak; b) reached the local peak precisely because of unthinking; and c) have to face the discomfort of going down before embarking on an attempt at the real summit (which you cannot see), the temptation to pretend your peak is the peak is strong. The traditional model of financial freedom is about getting to the stage where you don’t have to think about money. It’s a noble aim. Money is involved in every decision, and were each of them to have to be meticulously thought through, your brain would melt. But there’s a big difference between an unthinking default and a consciously constructed and systematically reviewed default. If you start from unthinking, you never get anywhere other than stuck. ## **The conspicuous consumption con** ***We are wired to signal our worth through waste… but the sort of ‘worth’ built on waste is not the sort of worth you want*** ### Want not to waste We are wired to be show-offs. Understanding what it is we are showing off underlines the futility of focusing on income over expenditure. Not only do we spend to signal our income, but we spend to some extent purely to justify the time and energy spent in our income’s acquisition. We are showing off not what we’ve acquired, but what we’ve lost. In Rousseau’s words, ‘Expenditures are increased for the sole reason of having a pretext for increasing income.’\[v] It’s almost profound in its pointlessness. We’ve attached our printers to our shredders and dedicated our lives to sorting out paper jams rather than just pulling out the damn plugs and going outside to play. To quote James P. Carse: > Once \[the owners of property] have drawn attention to what they have lost in acquiring what they own, they must then consume what they have gained in a way that recovers the loss. The intuitive principle here is that we cannot be justified in owning what we do not need to use or plan to use. One does not earn money merely to store it away where it will be protected from all possible future use.\[vi] We use both income and expenditure to signal our worth. And we signal our worth by wasting it. As Carse continues, ‘Consumption is a kind of activity that is directly opposite to the very form of engagement by which the title was won. It must be the kind of activity that can convince all observers that the possessor's title is no longer in question \[…] wealth is not so much possessed as it is performed.’\[vii] To understand the primacy of wealth performance over wealth possession is to understand the roots of all the idiotic shit we do around money. Consider: * The number that believe they want to be seen as being rich versus those that go about it by spending for the sake of being seen to spend. * The ‘curse of can’: decisions about how to spend our resources often rest upon our mere ability to do so, regardless of whether we expect the decision to lead to our life becoming any better… ‘what does it matter, I can afford it’ is not a justification of a purchase, it’s an admission of making poor life choices. We sacrifice the Good Life to look like we haven’t. * The ease with which we confuse having something for becoming something, as if being seen to be something by association with an arbitrary good were a guide to anything other than our possessing the means of acquiring it. Any idiot can own an Aston. Many do. It’s never made any of them James Bond. * Those that dedicate their energy to earning precisely to not have to think about money, and then spend those earnings in a way dictated by others’ views (or rather their perception thereof) in a merry-go-round of unthinking, all to avoid having to think about how to either earn or spend in a manner reflective of a Good Life. Like all intensely common behaviours, conspicuous consumption, despite dancing in our faces, all the time, and in big showy robes, is easily overlooked. Yet unless your aim is to waste your life, it mustn’t be. For it’s the opposite of what we want. Conspicuous consumption is more than an indulgent overspend… it’s an entirely unhelpful way to play the game of life. It’s the poster-child of self-deception. It’s the reason someone can never get anywhere near the Good Life despite apparently devoting all their energy towards it, and always believing that they’re only ever one more promotion, one more house move, one more somethingorother away from arriving at happily ever after. A prize for postponement can never be won. ### Are you being eaten? When something doesn’t make sense, ‘costly signalling theory’ – a showy display of apparent disadvantage that by its very showiness becomes an advantage – is often the answer. Conspicuous consumption is a form of costly signalling theory. Thorsten Veblen, the man whose name economic theory now attaches to goods whose expense is counterintuitively a *cause* of their demand, first described people lighting cigars with $100 bills as an otherwise nonsensical sign of wealth. The same analysis has since been applied to college degrees (too costly for future bad-employees to obtain) and to all the best slightly-bonkers evolutions of the animal kingdom, from calamitously long tails and heavy horns to the fun way gazelles ‘stott’ (jump on the spot) when they see a cheetah, rather than immediately legging it. Costly signals aren’t always stupid, or they wouldn’t ever happen. But they can be misguided. Stotting gazelles really do lessen their chances of being eaten. But if the Good Life is our goal, human stotting leads only to eating ourselves. Conspicuous consumption is what happens when ‘because everyone else is doing it’ gets imbued with relevance it has no right to claim. Remembering that conspicuous consumption is to waste your wealth in a performance put on for other people, the only sense in which it ‘works’ is for those other people, not for you. It drags you into the insecure mire with them, so while neither of you live any better, those already in the mire appreciate the company.\[18] Like all cons, the conspicuous consumption one is most dangerous to those that believe themselves immune from it. Those that complain about the game are key to keeping the game going. If you own a yacht and no one is jealous enough to complain about it, you lose half the thrill of owning it. Every complaint is an admittance to the ‘winners’ that the game they’re ‘winning’ is the only one in town and the one everyone else wants to ‘win’. Complaints confer legitimacy on your prize. If winning such prizes correlated with feeling like one were living a Good Life, then everyone would be right to continue to play. But it doesn’t. Silliness is, sadly, seductive. ‘Look at the number of things we buy because others have bought them or because they're in other people's houses,’ wrote Seneca, back when one Amazon was much bigger, and another much smaller. ‘One of the causes of the troubles that beset us is the way our lives are guided by the example of others; instead of being set to rights by reason, we're seduced by convention.’\[viii] It’s a view echoed by Benjamin Franklin: ‘The Eyes of other People are the Eyes that ruin us. If all but myself were blind, I should want neither fine Clothes, fine Houses, nor fine Furniture.’\[ix] Living other people’s lives is a tragic failure of imagination, for it is in a profound sense not to live at all. However, both Seneca and Franklin stop too short. It is not the ‘eyes of other people’ that ruin us. The eyes of other people could elevate us. And there’s not a lot we can do about them in either case. What ruins us is our own eyes, and where we choose to focus them. It is ultimately our eyes that lead us to believing that we are numbers, rather than narratives, to believing in the legitimacy of the game that derives worth from waste, to believing that our becoming wants can be met with having needs, and to being seduced into unthinkingly and systematically picking the wrong path. Being wired to pick the wrong path, and with no controls in place to stop and think that maybe this isn’t a wise move, doesn’t lead only to wasting a bit of cash. It leads, as Paul Tillich explains, to existential despair: The man-created world of objects has drawn into itself him who created it and who now loses his subjectivity in it. He has sacrificed himself to his own productions. But man still is aware of what he has lost or is continuously losing. He is still man enough to experience his dehumanization as despair. He does not know a way out but he tries to save his humanity by expressing the situation as without an “exit”.\[x] In this way, mankind has – in the very act of searching for meaning – created meaningless. Bugger. There is, of course, a better way. For the other path leads not to existential despair, but towards enlightenment. It’s a different game altogether. One where status and self-esteem aren’t products of possessions marketed by lost children playing make-believe, but side-effects of cultivating inherently rewarding character traits. Underneath our self-deception, we all already know this. If you think of the people you most admire and come up with a job title and a bank account, rather than a personality and behaviours, then you’re beyond help. With all money decisions we are seeking comfort and confidence. We delegate the decision-making process, hoping it’s a more effective way of obtaining them. Yet this is to try to become comfortable and confident in our own skin by buying cotton wool in which to wrap ourselves. There is no glory in winning battles that needn’t be fought. To do so is to be a modern-day Dr Frankenstein,\[19] squandering all the potential in the world to create a monstrous form of life, rather than something more fitting of his talents, while creating life the more traditional way. Comfort and confidence come from one’s self not one’s suit. In all my experience, regardless of what rich people owned, those living obviously better lives were those who knew what mattered most to them and used their resources in alignment with this knowledge. The implications for your savings are clear. As Morgan Housel wrote: ‘Past a certain level of income, what you need is just what sits below your ego \[…] One of the most powerful ways to increase your savings isn’t to raise your income, but your humility.’\[xi] We deceive ourselves in this way because it’s easy. It’s easier to fake the signals of income than those of expenditure. Because, actively or passively sent, expenditure signals are more honest. Our comfort and confidence with money can be honest or dishonest too. And while the fake way usually looks like the shortest way, it never actually gets where you want to go. {% content-ref url="/pages/-MBUSa87-s0II7FbCCG8" %} [2.2.1.2: How to spend it, and not spend it](/the-book/2/2.2/2.2.1/2.2.1.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Partly this is fear of the unknown. The consumer industry’s focus is after all on ways to make us open our wallets without having to think about doing so – usually by finding new ways to not have to physically open a wallet. Partly it is fear of feeling guilty. Of revealing secrets known only to the credit-card statement. We know what we do, but feel bad about it, and telling the world would be like publishing a food diary, or an internet browsing history. Partly it is fear of the interminably moralising frugality speech. Fear not – this book is no paean to parsimony. Reducing your expenditure should probably happen, but as a side-effect and expression of a joyful life, not as some sort of self-flagellation. \[2] Despite knowing others are too busy worrying about our judgments of them to care about their judgments of us. \[3] Something we’ll look at in detail later in [Section 2.3](/the-book/2/2.3) of this chapter. \[4] Maths footnote to come. \[5] See [Trigger #14: X has done well for themselves](/the-book/1/1.5/1.5.4#14-x-has-done-well-for-themselves). \[6] In ‘The conspicuous consumption con’ below, we’ll see that we’re also signalling something else of great importance, which highlights even more why this approach is so doomed. \[7] I knew a client once, a ‘Lady’ no less, who was shocked in the way that only clueless posh people can be, that her £10,000 per month jewellery and hats habit was met not with deference but pity, as if I’d misheard hats as heroin. \[8] See [Trigger #1: Better](/the-book/1/1.5/1.5.4#1-better). \[9] Having worked with those in the top teeniest tiny percentage of high earners, the amount of those wages is irrelevant. \[10] One wonders if this is an inevitable reflection of a world full of bullshit jobs. When so few jobs are defined by meaningful tasks, we need a proxy, and money is often all there is (those with meaningful jobs tend to lead not with a title, but a description of how they help bring value to the world). \[11] Taking a job primarily because of the money may be cripplingly stupid (we’ll get to that later), but getting paid up to the limit of your true worth for doing a job you’d do anyway is just wise. \[12] For those (like me) who still cannot hear the word ‘sales’ without their shoulders twitching and images of Glengarry Glen Ross or the Wolf of Wall Street coming to mind, learn to remould those images into one of a hostage negotiator or a therapist. This is about long-term helping someone else help themselves, not about a short-term con. \[13] However many ‘exist’ there, very few actually ‘live’ in Qatar. \[14] In this crude example, at a constant 7% p.a. \[15] Maths footnote: all such simple models will be available in online calculators at some point. \[16] Of course, if the intangible benefit of being able to be the sort of person that brags about never using public transport (and no one that’s ever chosen to dislike public transport has ever avoided mentioning it at every opportunity) unquestionably makes your life better than the extra income demands and such alternative uses of mental energy, then it would be a sound investment. I’m not here to judge specifics. \[17] See [Trigger #12: Treat](/the-book/1/1.5/1.5.4#12-treat). \[18] The manufacturers of white sofas also make more sales, of course, but it’s at least debatable that making profits in such a way contributes to anyone’s quality of life. \[19] Actually referring, for once, to the scientist, not his creation. \--- \[i] Confucius, *The Analects* \[ii] F. Scott Fitzgerald, *The Beautiful and the Damned* \[iii] Paul Dolan, *Happiness by Design* \[iv] Jon Elster, *Nuts and Bolts for the Social Sciences* \[v] Jean-Jacques Rousseau, *Discourse on Political Economy* \[vi] James P. Carse, *Finite and Infinite Games* \[vii] James P. Carse, *Finite and Infinite Games* \[viii] Seneca, *Letters from a Stoic* \[ix] Benjamin Franklin, Letter to Benjamin Vaughan \[x] Paul Tillich, *The Courage to Be* \[xi] Morgan Housel, [Collaborative Fund blog](https://www.collaborativefund.com/blog/let-me-convince-you-to-save-money/) # 2.2.1.2: How to spend it, and not spend it Both the profligate and the parsimonious believe price is the arbiter of value; both are wrong ## **Appearances are defined by deception** ***Standard of living does not equal cost of living; quality of life does not equal access to comfort*** ### Quantity is no substitute for quality ‘The happy man,’ wrote Seneca, ‘is not he whom the crowd deems happy, namely, he into whose coffers mighty sums have flowed, but he whose possessions are all in his soul.’\[i] Even if you could both earn the megabucks and avoid the lifestyle creep to make the earn-high-and-screw-the-spending maths work for you, you run into other problems. Where the aim is to live a Good Life, as soon as you earn enough that your life isn’t defined by poverty, the ‘earn your way out of trouble’ approach doesn’t dissolve troubles, it distracts you from them. This distraction deceives us into equating ‘standard of living’ with ‘cost of living’ and ‘quality of life’ with ‘access to comfort’. Even ignoring that conspicuous consumption is a fundamental flaw, ‘more expensive’ is *by definition* to start from a negative (you are giving up more than you could before you receive something – hopefully more valuable – in return). This can be justified, of course, but our trades are not automatically wise: just as water cannot be ‘more boiled’, emotional needs cannot be ‘more met’. As for comfort, we’ve seen how excessive external comfort *prevents* the cultivation of internal strength that real comfort is contingent upon. We accumulate expensive stuff and tell ourselves this means we are valuable people. We search for ever-more-elaborate ways to avoid the discomfort that creates growth despite deep down wanting the growth more than the comfort. We signal success, but we feel failure. And in daily doubling down on the mistake – in never stopping to question it, despite underneath the deception each of us already possessing our answer – we wire ourselves into an inability to act in a better way. There’s nothing wrong with upgrading the quality of your life, but there’s everything wrong with simply upgrading the cost of your life. Getting sucked into the trap of believing you need to earn in the top 0.0001% of people who’ve ever lived to have a chance of happiness, while overlooking that it didn’t work for anyone else that got there first, and nor did it work for you last time you did something similar on a smaller scale, is a terrible way to live. This idea has always fascinated me: why do so many act as if happiness were off limits for as-near-as-makes-no-difference everyone that’s ever lived?\[1] Life may be suffering, but it doesn’t have to be insufferable. As Cicero asked: ‘In what respects does poverty prevent people from being happy? All right, you like statues, or pictures. But if you should happen to have such tastes, people of modest means are actually better placed to indulge them than men of substance.’\[ii] In what respect, we could also ask, do possessions provide happiness?\[2] And in what respects does a status symbol actually signal status, as opposed to someone’s clamouring – so far unsuccessfully – for it? Desperation for status is simply the most socially acceptable way to brag about one’s insecurity. The myopic misunderstanding of what constitutes quality of life is nothing new. For example, Adam Smith wrote the following in 1759: ‘What are the advantages which we propose by that great purpose of human life which we call bettering our condition? \[…] It is the vanity, not the ease, or the pleasure, which interests us.’\[3] \[iii] This is what happens when we divorce spending decisions from the thought they deserve; the thought they would get if it weren’t so much easier to live in the future than the present. What you do for your income is usually in service of the future. What you do with your income is about who you are right now.\[4] It’s little surprise therefore that we’re all so cheered by the former and scared by the latter. Hope sings more sweetly than reality. ### Social performance is no substitute for self-assurance Recall the words of James Carse quoted earlier: ‘wealth is not so much possessed as it is performed.’ We talk of possessing wealth for personal ‘security’, but our actions suggest we use social security as a substitute, often sacrificing self-security in the process.\[5] Yet if that social security is dependent upon a continuing performance, it cannot be regarded as ‘secure’ in any meaningful sense. To display wealth diminishes its function as a safety net, yet the most common use of money is display. Many go so far as to dedicate their lives to displaying a level of wealth that they don’t possess. All the world’s a stage, and we’re performing a pretty silly play.\[6] The numbers path instructs that your resources should be wasted, replenished, rinsed, and repeated. The narrative path says that the Good Life is the side-effect of a participatory process of productive use of your resources, and that therefore it is refinement and alignment, not waste and repeat, that should guide you. As H.L. Mencken quipped, ‘There is always an easy solution to every human problem – neat, plausible, and wrong.’\[iv] Numbers-based solutions are still ‘solutions’, but to problems we shouldn’t worry about, based on strategies for games we shouldn’t be playing. Because of the ways we’re wired, and society is set-up, we’re tempted down neat, plausible paths that lead to playing the wrong games, and making mistakes with money that range from dumb to disastrous. And all for want of a little thinking. Shutting one’s eyes, or one’s mind, is easier than not, but comfort from ease is short-lived, and what looks like the easy answer is often a pricey part of the problem. Simple’s great; over-simplification isn’t. Using our wealth to signal something about ourselves is inevitable; it can’t be all bad. Shooting up flares so we can be found by other members of our tribe when we’re lost in the social supermarket is part of being human. But powerful forces deceive us into signalling not wisdom, but its opposite. We clutch at social performance as a substitute for something more meaningful, because we are too distracted and deceived to understand what it is we’re subbing it in *for*. As the School of Life put it: > We choose the wrong things because we don’t know ourselves well enough to select what will best work for us. \[…] Even apparently modest things like what we put in the trolley in the supermarket or what shoes we wear are distillations of large, nebulous notions: who we think we are, how we wish to live and what we think will contribute to our well-being.\[v] As contributors to our centre of narrative gravity, our expenditure speaks more honestly than our income. ‘You’ are a continuing series of expenditure-driven expressions, whether you want to be or not.\[7] Everything you do with your limited resources is an ongoing, accumulating answer to the questions: ‘What do I want to do with my life?’, ‘What do I value?’, and ‘What sort of person do I want to become?’ When we deceive ourselves into thinking those questions are the same as ‘What do I have?’, those resources are wasted. We are shopping for our ‘self’, but we rush straight to the salary-indicating side of the store, all but ignoring the character-cultivation one. Rare may be the person that directly states that a pay rise elevates their value as a human; yet rarer still is the person who doesn’t apply such judgment to other people. We may say generosity or health is important, but we buy tat and gout. Who we are is what we do, and what we do is incessantly and inescapably allocate our resources in the name of a narrative. We do not buy things, we buy stories.\[8] And if we want our stories to be more Shakespeare and less primed for pulping, we need to give them some thought. First, we need to avoid flinging our resources into the fire. And in a way that has nothing to do with frugality. ## **Beware the Micawber Fallacy** ***Advice on how to spend it or not spend it doesn’t work; returning your attention to how you are allocating your resources in service of your relationship with money does*** ### Be wiser, not a miser ‘Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.’\[vi] So said Mr Micawber in Charles Dickens’s *David Copperfield*. It’s so famous it’s even referred to as the Micawber Principle. There’s a lot to like about the Principle. It connects money to living a Good Life in relative, rather than absolute terms. It highlights the importance of expenditure. It acknowledges that more expensive does not equal better. However, the point of principles is to construct them *with* contemplation so you can easily follow them *without* when it’s most important to do so. And to blindly follow the Micawber Principle is to increase self-deception, not dissolve it. Living beyond your means isn’t living well. But nor, necessarily, is living within them. It could even be worse. When living within your means is the result of obsessing over the price of everything the result isn’t happiness, it’s an entrenchment of picking the numbers path over the narrative one, and the consequent reinforcement of deceptive patterns of beliefs about money. And if you obsess over anything, it compounds into a shitstorm in your brain. Happiness is the result of becoming wiser, not becoming a miser. The Micawber Principle rightly divorces the Good Life from an absolute quantum of money; but it wrongly enforces the attachment of our expenditure to our income. Thinking about our expenditure in terms of its relationship to our income rather than the value each spending act brings to our life doesn’t work. The Micawber Fallacy is to believe your expenditure is more important than your income because of the Micawber Principle. It’s not. Because the principle still treats the money in your life as a number, and your expenditure is more important than your income because of its role in your narrative. ### Healthy money A heathy relationship with money can be confusing to conceptualise. It often helps to compare it to a healthy relationship with possibly the only thing that our lives revolve around as much – food. The world has almost as many nutritional prophets and proselytisers as it does obese people. If dietary advice is working, it’s doing so awfully subtly. That the advice isn’t working isn’t because it’s too confusing or contradictory. The problem isn’t knowing which fad is best. The problem is that the unifying feature of all the advice that *could* work, and that’s probably responsible for 95% of any results, is the one bit of advice addicted minds don’t want to hear: cut the crap. While not everyone will benefit from going vegan, or keto, or carnivorous, or herbivorous, or other-fad-that-worked-for-its-promoter-ivorous, everyone will benefit from cutting out sugar and pretty much every ‘food’ that comes in psychedelic plastic wrapping that makes it look like it’s dressed for a rave. Every *body* knows what it really wants: something nutritious, not something engineered to abuse our addictive tendencies.\[9] Your cells ‘want’ hyperpalatable poison as much as your lungs want be to tarred. However, when the deceptive signals have become embedded in our brains, what the body really wants is as easily overruled as the part of a crack-addict’s brain that suggests selling one of its organs to a back-alley doctor for the next hit isn’t such a smart idea. The same is true of advice on how to spend it, or not spend it. Any advice beyond not buying stuff that makes your life worse (perhaps starting with psychedelically clothed ‘food’) however well-meaning, is useless; a projection of prejudices, not practical wisdom. ### How not to spend it Advice on how not to spend it is most notably expressed via the cult of extreme frugality – the ingenious ‘life hacks’ of the internet’s thriftiest underground communities. This is often accompanied by sound principles for both saving and investing, and often opens up important opportunities for examination, e.g. proving you can live just as well on less money makes it much easier to quit a crappy job. However, as long as the focus remains on the frugality, it’s tackling – often in a painful ‘sacrificing’ way – the symptom, rather than the cause. The only sustainable answer is to do something about the self-deceptive wiring that screwed everything up in the first place, and will continue to do so the second the sacrifices prove too painful. Frugality still focuses on the arbitrary number of a price tag as an indication of the role something plays in a life. Living within one’s means is an almost certain side-effect of buying what you want, not what you’re addicted to. Penny-pinching is putting the proverbial plaster on a broken leg. And extravagance is the tip of the iceberg of poor life choices. The real danger comes from the unthinking, addictive roots of all financial decision-making, the results of which aren’t always as obviously seen as supercars, square-footage, and seven-course tasting menus. No diet – in the sense that most people understand the concept, i.e. as a temporary prescription akin to a course of antibiotics – ever works. No diet based on denial can ever work. If you believe yourself to be a person with a sweet tooth, or who is hard-wired to like cake, crisps, and cola, no amount of denying yourself these things, however steadfastly you do it, will change these unhelpful – and unnecessarily true – stories that you are telling yourself about who you are and how you react to certain stimuli. If you continue believing that you are a person for whom the appeasement of such addictions is a reward, or a ‘treat’,\[10] rather than the satisfaction of a fix in the same way a smoker needs nicotine or a junkie needs heroin, then you will always be short-changing your body’s desire for health.\[11] The same applies to cutting your expenditure. If it’s equated with denial, it won’t work. You can’t win a battle that never ends. Because even if you can keep up the fight, you’re still exhausting your valuable energy in an unnecessary cause, and that is no sort of victory. A trim-looking credit-card statement, like a trim-looking stomach, can be a sign of success, or of failure. It is, as always, not about the numbers. A trendy diet can work as a short-term reset, because of what it cuts out rather than what it adds in, and because it forces people to be more observant of ingredients lists. Advice to cut spending back to its bare minimum can work in a similar short-term way, because if you’re wasting money, then cutting spending on everything makes it highly likely you’ll cut the waste. Cutting all the way back before building back up is a great way to achieve clarity around your priorities. Forcing yourself to re-choose what to keep is more effective than idly choosing what to discard because it forces you to question the truth of stories about your preferences that have gone unchallenged for years, maybe decades. It could well lead to automating savings behaviours, for example ensuring that full use is being made of things like employer pension contributions, which will have benefits long after the crash diet has ended. Short-term fixes work when what they fix is your capacity for linking your short-term actions to your long-term vision. Mindful short-term fixes can work because they force us to pay attention. We saw earlier that paying attention is not shining a spotlight on a snapshot situation, but a process of continually renewing your interest, and refreshing your intention.\[12] It is a form of remembering, in this case remembering which version of you are you voting for with each decision. Generous or selfish? Healthy or self-destructive? Focused on alignment or accumulation? On becoming wiser or more deceived? Short-term attention becomes a long-term healthy relationship. Frugality for the sake of it misses the point. While it may rid someone of the false belief that quality of life equals access to comfort, it is still defined by equating cost of living with standard of living. It just reverses it. It turns it into higher savings rate equals higher standard of living. The chance of wasting money resources is diminished, but the chance of wasting time and energy resources isn’t. This is much safer than the extravagant alternative, but it’s still focused on a numbers scorecard, and is therefore still doomed to fail (in the sense of cultivating a Good Life). Dropping the attachment to the numbers scorecard opens us to the opportunity to use a more meaningful one. For example (to borrow from Bruce Lee) to ‘seek elegance rather than luxury, and refinement rather than fashion’.\[vii] When aiming for a healthy relationship, getting stuck seeing money merely as a medium of exchange or store of value stops us seeing it as an expression of and shaper of a relationship. It’s not the numbers, but the relationship that correlates with a Good Life. This applies to frivolity as much as frugality. We’ll see next how common advice on how to spend it is just as flawed as the advice on how not to. ## **Are you reading the wine list the wrong way around?** ***Your enjoyment of an experience relies on the story you tell yourself about it; high expense is an unnecessary, even foolish, ingredient of such stories*** You’re in a restaurant, and you’ve just been handed the wine list. After getting over the initial hurdle of red, white, rose, or orange (or perhaps something bubbly) where do you look? Is it to the left – guided, perhaps, by matching the tasting notes to your meal? Or perhaps by a nostalgic yearning for a much-loved holiday in southern France? Or maybe you’re drawn towards a vineyard with a funny name? Starting on the left, you make your choice, and then see if you can afford it. Or do you start on the right – looking at the prices and working back from there? If you’re like most people, you start at the right more often than not. And if you ask for help, the first question a standard-brand sommelier will ask is invariably ‘what’s your budget?’ Yet does this work? At one end, you could miss getting exactly what you want for a fraction of your budget. And at the other, is discovering that what you wanted you don’t want enough to pay what it costs a disappointment or a lesson?\[13] We adopt the same attitude with most purchases; and nowhere more obviously than with the biggest purchase most of us will ever make: buying a home. The common approach is to work out what is the most expensive house we can afford – and not even that, the most expensive house we can afford with the most borrowing the bank will give us – and work backwards from there, even if we could have had all our needs met for a much smaller sacrifice of current and future resources. We do this despite being well aware that the most emotionally salient features of house-buying (the once-a-year garden party) that play the starring role in our purchase decision play a miniscule role in the quality of our lives compared to duller daily things like a commute or a living environment that encourages us to do the stuff we most want to do.\[14] We’ve trained ourselves to unthinkingly reduce everything to a number, so we instinctively collapse inescapably complex decisions into simplistic shortcuts to mistaken conclusions. That this is understandable – complexity inspires just the sort of discomfort and highlights just the sort of lack of confidence we run from at any cost – doesn’t stop it being really, really, stupid. When we’re uncomfortable and unconfident thinking about money, higher stakes don’t inspire greater reflection, they inspire bigger mistakes. Failures to think things through wouldn’t be too bad if they were restricted to the realms of coffee and cat food. Unfortunately, as the size of the spend increases, so does our tendency to bugger it up. Houses are especially complex because a single object is used to meet myriad needs. Houses are palaces of self-deception. Primarily (one hopes) they provide shelter and somewhere to store sustenance. They are a place to recharge, and a canvas for creative expression. They are an environment that enables and encourages us to fulfil our potential. But such intrinsic values are often dwarfed by extrinsic ones. Every house is bought partly for ourselves, and partly for our perceptions of other people’s perceptions of us. Partly to house what is integrally valuable to us, and partly to showcase what is incidentally valuable to the world, that we may bask in its reflected glorification. There’s often a fine line between stuff that says something important about oneself and stuff that says, crudely, ‘look at what I can afford’. We attach ourselves so enthusiastically to the latter that we’re prepared to not only spend all our resources on it, but to borrow some more and make a leveraged all-in bet on it too. Again, if this worked, no one could argue with it. But it often doesn’t work at all, or when it does, it does so at unimaginable and unnecessary cost. \* One day, a good friend of mine asked for my advice because he was thinking of moving to a bigger house. Intrigued, knowing both the size of his house and that his children were settled in both size and number, I dug into what he really wanted. For no one who says they want a bigger house actually wants a bigger house. They maybe want to put some distance between their children, or put a cricket net in the garden (or perhaps give psychoanalysts something to theorise about). It turned out that this friend wanted to get away from his wife and children. In a nice way. Everyone needs their personal space, and no one needs to be co-dependent. I suggested that before he committed to the extra couple of decades of work that a bigger place would necessitate, he told his wife what he’d told me. Having been party to many years of husbands and wives surprising each other during financial-planning meetings when they let slip wants of which the other was oblivious, I suspected that if he’d like more time to himself, then his wife probably did as well. And she did. They now treat the study as a time-share. Hundreds of thousands of pounds – and goodness knows what knock-on physical and mental costs – saved by two easy interrogations of what was actually wanted.\[15] Wine or houses, this isn’t about spending specifics.\[16] It’s an explanation of why, if you get the fundamentals right, you don’t need such advice, any more than you need to be told crisps are not what your body wants when you’ve gone without them for a few weeks. You already know what you want to spend your money on. You just don't know how to know you know. *That's* the role of advice. ## **How not to buy experiences** ***It is better to allocate resources to experiences than material goods, but a new trend for buying experiences in a way that turns them into material goods loses this benefit*** The value of what you buy is determined by how it fits into the story you tell yourself about yourself. The enjoyment of an experience may be elevated by expense, as when wine tastes better when we believe it’s more expensive, but it’s the belief, not the expense, that shapes the story and enables the enjoyment. And when belief is all that’s required, it’s dumb to actually pay for it. One of the most important investing lessons relies on the same concept. People avoid investing at all, or panic-sell when they don’t need the money, to buy emotional comfort based only on a belief. Because of the long-term compounding outperformance of equity-based investments, this is often the most expensive mistake anyone will ever make. It can ‘work’ in that someone who isn’t invested is probably less worried about the ups and downs of the market than someone who is, but it comes at a completely unnecessary cost. Our stories are written with our actions. We’ve known this forever, and there are signs that it’s seeping through to how people are allocating their resources. More people favour splashing out on ‘experiences’ over material goods, reflecting a new collective consciousness of an old intrinsic understanding. Unfortunately, the way most people go about this, they bugger it up. By focusing on the output (the executive summary that ‘experiences make people happier than possessions’) rather than the input (the deep reasons *why* we get more enjoyment from experiences) we manage to buy experiences in a way that turns them into material goods. When we buy an experience we are spending on both the chance to participate in a transitory process, and a vain attempt to eternalise the event: to fuse it to ourselves in the eyes of others. The value of an experience is in its transitoriness, yet every time we sign up for an ‘experience’ because we think it’ll produce a cool new profile photo or envy-inducing social-media ‘story’, we cancel that bit out. We try to transform the most powerful parts of our *process of becoming* into something to own, *something to have*. Recall [Rule #7: There is a wanky way to do anything](/the-book/1/1.5/1.5.3#7-theres-a-wanky-way-to-do-anything). Depending on your attention and intention, the same experience can work, or it cannot. In terms of the Goodness of your life, there’s a galaxy of difference between going to a fancy secret supper club because the atmosphere sucks you in, makes your heart sing and your skin tingle, and going so you can tell other people you went. From those that eviscerate the enjoyment of live music by trying to film what can only be felt, to those that share motivational images of a yogi in a forest with a caption about how we’re human beings, not human havings, before dashing off to India to immortalise the moment with the perfect selfie… there is a massive market in persuading people to own what should only ever be rented.\[17] This is not to say that one should experience things only after signing an NDA that expressly forbids ever telling anyone that you’re going to do something, are doing it, or did it. I suspect a huge part of what makes experiences so damn thrilling to a human is sharing them.\[18] But if you wouldn’t undertake an experience if you *had* to sign such an NDA, you probably shouldn’t do it. Experiences work because they are about the narrative and the participatory process. Because they transport us to a flourishing, flowing, meditative place of not-thinking. A place of insight into ourselves, the world, and how they dance together. However, they do not do so automatically. Take travel as an example. Travel isn’t intrinsically happiness-producing. Ask anyone that’s travelled large distances with small children. But many blindly bet their bucks on it almost purely because they’ve heard buying experiences not stuff is the ‘answer’. If we weren’t so prone to take jobs that we ‘need’ to escape from (largely so we can afford to escape from them), we would be more likely to make more conscious choices. For an experience to prove enlightening, to reward us with the insight we seek, it needs to be wisely chosen. It needs to be thoughtful. Not-thinking starts with thinking, not unthinking. {% content-ref url="/pages/-MBUSe4we7RGQq5m\_cvg" %} [2.2.1.3: The unexamined dollar is not worth a dime](/the-book/2/2.2/2.2.1/2.2.1.3) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] An idea we’ll return to when looking at the Arrival Fallacy ([Part 2, Section 3.1](/the-book/2/2.3/2.3.1)), for if the one goal of the Good Life is adequately proxied by attaching undue meaning to interim destination-centric goals, then you rob everyone that’s ever lived in a time without access to those destinations (be it a job title, or the latest gadget) the chance of living a meaningful life… and, by extension, future people rob you of yours. Fortunately, because life is a participatory process of complexification and growth, not a blind lurching towards ‘arriving’ at an arbitrary destination and the cessation of growth, your chance of meaning in life isn’t dead yet. \[2] Some do! But the correlation with improving one’s life is with neither the quantity of the possessions or their prices. \[3] See also the footnote in Section 2.3.2 re Bertrand Russell’s 1950 Nobel Acceptance speech, in which he lists vanity as one of the four insatiate desires. \[4] Even saving for the future isn’t spending on Future You, it’s spending on the emotional needs of Current You to be someone who is responsible for Future You. \[5] I.e. we sacrifice huge amounts of resources for the fleeting security of ‘fitting in’; resources that could have been a financial buffer against potential poverty. \[6] This also explains to some extent why rich investors will spend many hours and potentially multiples of their total other expenditure on chasing the chance of a few extra percentage points of investment returns, and at the same time aggressively resist any suggestion to shave the same quantum off their expenditure. \[7] See [Rule #5: How you do anything is how you do everything](/the-book/1/1.5/1.5.3#5-how-you-do-anything-is-how-you-do-everything). And while it’s possible to forgive the short- or even medium-term endurance of a poor career choice, there are no excuses for poor expenditure decisions beyond the first exploratory adventure of a particular type. \[8] The same is true in investing, with often costly effects, something we’ll cover in Part 2, Chapter 4. \[9] We’ll revisit wants and addictions (and the unhelpful talk of ‘needs’) in Part 2, Section 3.2. \[10] See [Trigger #13: Treat](/the-book/1/1.5/1.5.4#12-treat). \[11] Sustained actions to the contrary can change the story, but that won’t happen if you aren’t open to reserving judgment for a bit and dropping the belief. If the mind doesn’t change, then the same wiring that caused the problem you’re trying to solve will simply rev up again when the forced actions run out of oompf. \[12] [Part 1, Section 4.4](/the-book/1/1.4/1.4.4). \[13] There is of course a ‘snob’ value to wine, but it can easily backfire. I once had a drink with a particularly egregious oaf in Qatar, who took one sip of whatever was open and proudly declared ‘I can’t drink this’ before making a show of ordering the most expensive bottle on the list. He made an impression, but I’m not sure it was the one he was going for. Being guided by something other than price makes you instantly less of a twat. \[14] There’s an investment side to property purchase decisions too. And property does not come out well. We’ll look at property-as-investment mistakes in Part 3, Section 1.2. \[15] We’ll look in more detail at the fact there’s an underlying emotional reward being sought by every purchase in Section 2.3.3 later in this chapter. \[16] The closest I’m allowing to advice is this, from pioneering designer William Morris: ‘If you want a golden rule that will fit everybody, this is it: Have nothing in your houses that you do not know to be useful, or believe to be beautiful.’ From “The Beauty of Life”, a lecture given in 1880 and later published in *Hopes and Fears for Art* in 1882. \[17] Something we’ll return to in Section 2.3.2. \[18] And indeed sharing is the easiest way to turn a material good into an experience. \--- \[i] Seneca, *On Sophistical Argumentation*, quoted in Anthony Gottlieb, *The Dream of Reason* \[ii] Cicero, *On the Good Life* \[iii] Adam Smith, *The Theory of Moral Sentiments* \[iv] H.L. Mencken, *A Mencken Chrestomathy* \[v] The School of Life, *The Book of Life*, \[vi] Charles Dickens, *David Copperfield* \[vii] Bruce Lee, *Striking Thoughts* # 2.2.1.3: The unexamined dollar is not worth a dime Wise spending decisions aren’t difficult, for you already know the answer; but you’re distracted and deceived ## **Exam conditions** ***To know a purchase properly is to know how it contributes to your story*** The key to making better financial decisions is to remember, at the point of making each decision, that the number (e.g. the purchase price) is incidental, not integral, to the wisdom of that decision. Declaring that purchases aren’t about numbers may seem strange, but what is a purchase? I do not mean in a way defined by propositional or procedural knowing.\[1] No one struggles to describe a purchase as a trade of money for a good or service, nor the mechanism by which that trade is commonly carried out. The struggle comes with perspectival and participatory knowing. Sometimes when we trade we buy into things. Other times, we are sold on things. The job of an unscrupulous salesman is to rob trades of their perspectival context: to screw with your understanding of what is relevant to you in your current circumstances. The quickest way to sell you on something is to make you forget its opportunity cost – all the other things you could do instead, especially the long-term ones, and narrow your view to the immediate monetary cost. You’re more likely to jump into your wallet when comparing a price tag with your credit-card limit than the story something is telling about you with your values. Yet a trade is inherently participatory. We are interacting with the world based on who we are, and in a way that changes both who we are and how we subsequently interact with the world. We are analysing, expressing, and creating our identity all at once. We are not merely taking ownership of an object; we are internalising it. Understandably few salespeople want you to question if you fancy consuming their wares in such a symbiotic way. Conscious consideration of perspectival and participatory factors isn’t easy. It can’t be. It concerns you, and you are complex. And true complexity is irreducible.\[2] In the moment, this doesn’t feel like a big problem. But it quickly becomes one when you compound each in-the-moment decisions into the lifetime of decisions in which it sits. Decisions are only ever made in the present. Becoming wiser with money is about making better in-the-moment decisions such that they sum to a better life. However, mere exhortations to live in the ‘here and now’ don’t work. They either aren’t remembered when needed, or are excused by belief in ‘exceptional’ circumstances – an ironic overwhelm of ‘one-off’s.\[3] To preach about the present is to make the same mistake as it tries to correct: it’s to fail to see each decision as a step along a journey whose path is written in the wiring shaped by all your previous decisions. The same mistake is made when people talk of instant and delayed gratification. Without context, neither is good nor bad. The person that’s praised for resistance could be unthinkingly kicking a can down the road because they see not an action that will likely make their life better, but because they are blinded by a simplistic belief that delayed gratification = good, while also failing to see that if you delay forever, you end up dead before you end up gratified.\[4] Recall how diets based on denial cannot work: if a gratification is delayed only with a fight, then even when you come to consume it later – If during the delay your story of yourself as the person who ‘wants’ the short-term dopamine hit doesn’t change – what have you really won? To call either the instant or delayed variety of gratification ‘good’ is to make the mistake of assuming it’s only the consumption that counts towards the Goodness of a life. To isolate the past, the present, or the future also fails to see that past and future are both part of the present. A decision that extracts itself from your narrative may be easier to model, but it becomes useless in the process. For example, your memories, your sense of self, and the psychological security from knowing what you have lived through already are ‘past’. Your anticipatory happiness and psychological security from imagined consequences are ‘future’. They all shape your centre of narrative gravity. They all contribute to your decisions in the present, and determine whether a decision can subsequently be thought to have worked out well or not. Stopping and thinking about such things is not as easy as gliding along on unthinking neural grooves, but if the aim is to get reroute unhelpful grooves and live a better life, not stopping and thinking is suicidal. The cognitive load of connecting every purchase to a grander narrative – zooming in and zooming out at the same time – is unfeasibly heavy. So we turn to heuristics. But we need more thoughtful heuristics. We need not be more conscious about every decision if we are more conscious about how we cultivate our ability to connect the now to our narrative; if we set ourselves up to take right action by the effortless effort of *wu wei*.\[5] ## **An unexamined life is an unfulfilled life** ***To follow right knowledge with right action requires not having better knowledge, but becoming a person who uses it more thoughtfully*** To take right action without it being a right pain means shifting from our having mode to our becoming mode. This modal shift is more than a reorganisation of priorities. It is not shifting the balance between thinking and unthinking and engaging the brain a bit more than usual. It’s a shift in one’s mode of living and interacting with world. It is a journey of *becoming* a thinker, rather than a collection of *having* particular patterns of thoughts in isolation. It is remembering that an underlying purpose of creating a home, say, is to become mature, rather than just to have a house. A shift into the becoming mode is necessary for the systematic overcoming of self-deception. Tackling decision-making errors one by one is as impossible as eating healthily while still identifying as someone that ‘wants’ cake. However many battles you win, you’ll never win the war. Failure to make the shift condemns thinking things through to being forever a chore, never a habit. It is to live forever in the land of get-rich-quick schemes and diet pills, of dashed hopes and endless frustrations, and to be tossed about by the unrelenting entropy of self-deception. To bring order to entropic chaos needs something to get in the way. That something is examination. Socrates’ assertion, when on trial for his life, that ‘the unexamined life is not worth living’\[i] may be the most famous line in classical philosophy. But what does it mean? Socrates is saying that he would rather die than live a life governed by self-deception. He was sentenced to death for seeking wisdom, for trying to understand what is real and living in alignment with it; for seeking to establish a rational basis for what to care about, and what to do. Aligning what he did with what he cared about, rather than with what unreal deceptive influences told him to care about, was so important to Socrates that he was prepared to die for it. ‘Leading a considered life,’ wrote Derren Brown, some time later, ‘is about getting our story right for ourselves. It's as simple as that. If we, at any point in our lives, can look at what we're up to and feel that everything is more or less in its place, and that our story is on the right tracks, we will have a good basis for happiness.’\[ii] To live, rather than to drift along inert, is to participate in a process of growth, as David Cain explains: > The difference between people who grow and people who stagnate is the habit of self-examination. It amounts to little more than asking yourself what your lifestyle is creating and whether you'd like to create something else instead. Living without self-examination means you will be simply following incentives as they pop up in your life, like a trail of little cookies, without knowing why you're doing it, who is placing this trail, or where it's likely to lead. Essentially this means your circumstances will always be doing the steering. Your life will be what happens to you.\[iii] We want to be in control of our lives, yet the means of being so scares us. The ratio of those that quote ‘the unexamined life is not worth living’ to those that schedule time to do such examining is, I would guess, similar to the ratio of those that want to get healthier, know how to do so, and yet fail to take the necessary action. Cravings call for calm interrogation. They instead get credit cards. Our Good Life may depend on asking a craving what circumstances inspired it, what emotional itch it is scratching, what values it aligns with, and whether the same thing worked last time we tried it, but that still isn’t enough to stop us in our unthinking tracks. This shit runs too deep for that, as Susan Wolf explains: > Our initial pretheoretical or intuitive judgments about what is valuable and what is a waste of time are formed in childhood, as a result of a variety of lessons, experiences, and other cultural influences. Being challenged to justify our judgments, being exposed to different ones, broadening our range of experience, and learning about other cultures and ways of life will lead us to revise, and, if all goes well, improve our judgments.\[iv] \* A word of warning: examination is not budgeting.\[6] Examination does not equal a focus on metrics. What gets measured gets managed, but if you divorce the measurement from the meaning, you’re managing the measurements, not the life they should be serving, mistaking the means for the meaning. Beware Goodhart’s law: ‘When a measure becomes a target, it ceases to be a good measure.’ A crucial failing that robs measurements of meaning is to focus on absolute, rather than relative metrics. Absolute metrics are about comparison with others. Relative metrics are about comparison with yourself. The former offers only basic, and ultimately unusable, propositional knowledge. The latter is more participatory. Examination is an approach to life, not the structure of a spreadsheet. There are budget-like tools that are necessary (at least to begin with) to properly examine your expenditure, and we’ll get to them later. But they’re of no use to the unprepared mind. Because all purchases are trades, all purchases are investments: the giving up of something in the hopefully wise prediction of getting more back in return. And what is it we are – in every instance – investing in? The Good Life. Remember Principle #2: There is only one goal. Proper examination converts numbers into narrative. Regardless of their relative importance, unexamined earnings and unexamined expenditure do not add up to a life worth living. ## **Budgeting is bullshit** ***Traditional budgeting cons us into thinking we’re being wiser with money, when it can be subtly making us dumber*** Budgeting is bullshit. I use the word in the technical sense.\[7] Bullshit is not about falsity, but fakery. Bullshit can be true or false. The point is the bullshitter doesn’t care. They care only about *looking* like the truth. You can’t lie to yourself, because lying relies on believing and belief isn’t a voluntary action. You can’t lie to yourself and believe that something you know to be true is actually false. But you can ignore the truth; you can act *as if* it weren’t true. You can bullshit yourself. We all do it almost all the time. Because bullshit relies only on attention. And while most people’s attention may spend most of its time as a hostage to the latest notification ping, you *can* consciously control it. If you pay attention properly, the object of your attention becomes exponentially easier to pay attention to. It thus becomes more relevant to you, and you become less concerned by other things, like, say, market news. Budgeting as it’s traditionally done is bullshit. It is deceiving ourselves that we’re being awfully wise with our money, but in such a way that the very veneer of wisdom gets in the way of actually becoming wiser. We count to assist the examination of our lives, but believe the act of counting *is* the examination. We therefore stop too soon. The purpose of budgeting is to make better financial decisions, yet by focusing on the number rather than the narrative, it can inadvertently stop us from doing so.\[8] This affects each person differently, depending on their wealth. Because budgeting is framed as a means of comparing ins to outs, those with the highest ins think counting the outs doesn’t matter. Those with the lowest ins spend their lives fire-fighting the outs.\[9] Each one believes thinking about the story their expenditure is telling is irrelevant. Conscious consumption is more likely among the masses in the middle. However, even there, a majority still dream of earning enough precisely so they do not have to think about what they’re spending it on – even though it is the alignment of that expenditure, not its accumulation, that determines the Goodness of it. This is especially pertinent with regards to saving, which we’ll look at in the next section. \* Budgeting should be an examination of the expression of our expenditure: is the story it tells about what we care about aligned with what we actually care about? Is it a tale of ever-wiser choices, or of enabling addictions? Even when we do construct or review a budget, we do so with categories imposed by credit-card companies, or on account of *where* we bought something, rather than *why* we bought it. Just as what we spend on a house can represent attempts to meet a myriad of emotional needs – positive and negative – so too can the same small expenditure tell a different story at a different time. Sometimes a coffee is a great investment in a treasured friendship. Sometimes it’s a crutch of someone who’s adventurously deprioritised sleep. Dumping data into a spreadsheet is no more examining it than bookmarking an article is internalising its ideas. Traditional budgeting isn’t terrible, but it’s not insightful. It can work like a food diary – where the very act of upping attention cuts out the worst behaviour – but these are surface level, and therefore unsustainable, changes, not shifts in mode. The purpose of budgeting is to make better decisions, not to count beans for the sake of it. As we’ve seen, decision-making goes awry because of a poor relationship with money. This cannot be solved by more money. You can’t earn your way out of a misalignment between your spending decisions and your values. So called ‘F-you money’ believes it is saying that the consequences of decisions don’t matter. This is clearly nonsense. What it’s actually saying is that the consciousness of those decisions doesn’t matter. Yet to live unconsciously is hardly ‘to live’ in a meaningful way. All purchases are investments; it’s not wise to double down if you’re betting on bullshit. ## **Non-bullshit budgeting** ***Every purchase should be both guided by one’s values and a means of refining them*** What makes a budget bullshit is never measuring the *right* thing, because we believe measuring *some*thing is a worthy substitute. Done right, examining our expenditure is a means of beating self-deception; done wrong, it enables it. Budgeting should be fun. Thinking about the wants you’re about to fulfil, and then reminiscing about having fulfilled them should be genuinely enjoyable. As should the never-ending, but ever-progressing challenge of allocating scarce resources in service of those wants. Progress is inherently pleasing. When you buy something that you know has just made your life better, it feels wonderful. It doesn’t become less wonderful to remind yourself of that. Budgeting is either ignored or abandoned because it feels boring. Yet budgeting gets boring only when we mistake the measuring means for the expressing ends. The purpose of a budget is not to compare our income to our expenditure, but to examine our expenditure to better align it with what we care about. Real purpose pumps us up; pretend purpose bores us. The answer to counting badly isn’t to stop counting. The message of this book is that most money problems are ones of self-deception, and we defeat self-deception with becoming wiser. We do this by focusing on who we are becoming over what we have, the narrative over the number, and consciously controlling our actions from within over unthinkingly absorbing them from without. \* The difference between a bullshit budget and a non-bullshit one can be shown with savings plans. In short: do you save first and spend later, or the other way around? Budgeting for many is a tool to increase savings. The traditional method is to add up typical costs, and aim to save what’s left over. Yet spending happens more reliably than saving, so which does it make more sense to prioritise? Trying to ‘cut’ expenditure yields very different results from consciously re-choosing it. We cut only what’s obviously wasteful, while we unthinkingly continue to ‘choose’ all sorts of stuff that doesn’t add anything to our lives, but doesn’t obviously detract from them either. Yet it does detract, from all the other potential uses of our monetary and mental resources. Because of this, and because spending, like work, fills the space allocated to it, what’s ‘left over’ is fragile. It needs protecting. It needs to come first, not last. Especially if we want to inspire a modal shift from ‘saving some money now and then’ (however regularly) to ‘being someone that saves’. We want the latter; we kid ourselves into believing the former is a proxy for it. If our chosen savings rate proves unsustainable, we can always lower it, but we shouldn’t stop it. Those struggling to make ends meet may find so little left over that they conclude saving anything isn’t worth it. Yet the habit of saving is always worth it, whatever the amount. Getting started makes getting going much easier. And what may start as a necessity quickly becomes wired into a mindset that lasts longer than the circumstances that inspired it. At the other end, those who can’t help but save no matter how much wagyu beef they eat and first-class flights they take, believe this excuses them from thinking about anything as trivial as if all those resources – and thus their life – could’ve been better spent.\[10] This can be extended to everything we spend. For viewed through the lenses of narrative v numbers, becoming v having, and thinking v unthinking, everything is a lifestyle choice. A budget is merely a means of making those choices clearer and more conscious. \* We act as if money problems will vanish if we run from them, but in the long-term the opposite is true. Fears grow in the dark and dissolve in the light. Making better money decisions in a self-reinforcing way requires becoming wiser with money – making aligning our resource allocation with our values systematic. This requires overcoming self-deception, chiefly by consciously connecting short-term numbers-based actions to our long-term narrative-based stories of our lives. The bridge between short-term actions and long-term values is built in the brain. The miracle of neuroplasticity\[11] is in linking seemingly insignificant actions to the hugely significant shaping of one’s life story. Recall that a story is a device for making the impossible inevitable. Gaining traction is tricky. But it’s the only way that works. Just as people who’ve cured themselves of chronic pain with visualisation exercises may have spent six months or more doing hard work with no observable results, so making wiser spending decisions could have little to show for itself for a long time. But eventually transformations happen. And there’s no going back. Self-examination is non-negotiable, but there can be a role for a coach to play too. However, as we’re about to see, the people in the best physical position to help are often in the worst psychological position to do so. {% content-ref url="/pages/-MBUSiBlw53vTpF4IPHc" %} [2.2.1.4: Adviser or enabler?](/the-book/2/2.2/2.2.1/2.2.1.4) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] As defined in [Part 1, Section 3.2](/the-book/1/1.3/1.3.2). \[2] Much may be made of those who can ‘explain complex things in simple ways’, but what these people are really doing is explaining simple things that are typically explained in unnecessarily complicated ways. But because this talent is rare, and because we mistake simple for simplistic, we imbue them with powers they do not possess. At best they can explain a simplified version of a complex idea. \[I’ll probably expand on this in a new part of the Introduction soon.] \[3] Every client I’ve ever met has described each and every year as ‘exceptional’ when asked to analyse what they’ve spent their money on during it. \[4] We’ll sidestep for now the fact that most examples of gratification are actually succumbing (or not) to an addiction – so whenever you consume the thing in question you’re probably making a mistake. We’ll return to this when considering wants and addictions in [Part 2, Section 3.2](/the-book/2/2.3/2.3.2). \[5] See [Part 1, Section 3.4](/the-book/1/1.3/1.3.4). \[6] We’ll look at better budgeting in more detail in the next section. \[7] As set out by Harry Frankfurt in his wonderful essay *On Bullshit*. \[8] Though any form of budgeting is unlikely to lead us to make worse decisions. It’s not a terrible idea, it’s just not a good one, when the same effort can be more effectively directed. \[9] They may still be buying stuff that makes their life worse, but don’t notice because they’re so focused on finding the cheapest version of that unexamined thing. \[10] Recall [Trigger #1: ‘better’ is not the same as ‘more expensive’](/the-book/1/1.5/1.5.4#1-better). No one believes their spending is extravagant. I’ve known people burn through half a million a year or more and believe that while their lifestyle may be unusual, it’s not unhinged, apparently unaware that the actions of which they boast indicate that they are either incredibly stupid, or incredibly miserable. \[11] As per [Part 1, Section 3.1](/the-book/1/1.3/1.3.1). \--- \[i] Plato, *Apology* \[ii] Derren Brown, *Happy* \[iii] David Cain, *How to Save the World* \[iv] Susan Wolf, *Meaning in Life and Why it Matters* # 2.2.1.4: Adviser or enabler? We – and those we employ to help us – are set-up to make mistakes with money, but they’re not unavoidable ## **The comfort-challenge conundrum** ***Those we employ to help us overcome spending self-deception unwittingly curtail such contemplation when it gets uncomfortable… which is the exact point it starts to become helpful*** We’re wired to make money mistakes. Society is set-up to encourage and enhance them. Recognising them, and knowing what to do about them isn’t always enough. They can be so deep-rooted, and so self-deceiving, that they cry out for some external assistance. However, the people in the best place to help are incentivised to make things worse, not better. We know what we need to do: * We need to psychologically zoom out (recall construal level theory). * We need to move beyond a narrow view shaped only by propositional and procedural knowing, to a more realistic and relevant one including perspectival and participatory knowing. * We need to change our brains to change our behaviour. * We need to alter what we see as salient through systemic change, not surface-level tactics. * We need to mould our identities in a way that more helpfully attunes them to the world. All this can – and to a certain extent must – be done solo. But it’s easier and more effective with help. We know what help we need in general terms: * We want the help of an interrogative editor helping us to tell our story better, not a well-meaning co-author trying to merge our story with theirs. * We want help that understands that however tempting it is to believe otherwise, it’s never about the numbers. * We want help that confronts and combats errors in problem formulation and reasoning, that leverages the experiences of people in similar situations to ours to help us ask better questions and better reason through to answers. * We want help that doesn’t answer questions for us, but propels us away from paralysis and towards practical wisdom. * We want help that uses managed discomfort to build character and courage, rather than padding and pampering you into a lifetime of pain. We also know what specific help we need within the context of thinking more wisely about income and expenditure: * We need an ‘alignment coach’ (not a facilitator of accumulation); someone that reminds us to check that our expenditure is expressing the story we actually want to tell. * We need someone with inside knowledge not of how much and how people spent, but how well it worked. * We need someone to challenge our decisions, knowing that if they were good decisions, they’ll meet this challenge, and if they weren’t, it’s better to know, to make better ones next time. Being inside the heads of the wealthy – being able to follow money actions to quality of life consequences, to build up a repository of those lessons that helps people like you learn from other people like you – is the single most valuable piece of professional knowledge there is. That’s what you should be paying for. Not data entry of your expenditure into categories in a cash-flow model.\[1] Is this the help on offer? Is this what people pay for even when it is? Is it bollocks. With maybe a handful of heroic exceptions, those best placed to play ‘alignment coach’ pay no attention to whether something works or not. The average adviser will put you in touch with their ‘car guy’, but they won’t follow-up and ask if the new motor sustainably upgraded the quality of your life more than the alternative uses of that money would have done.\[2] Typical advisers favour an orthotic padding of poor positions over building of strength in good ones. Yet a bad thing done more efficiently doesn’t become a good thing. They may discuss hypothetically ‘cutting one’s cloth to fit’ if (relatively) hard times hit, but this isn’t in the sense of tailoring (which is valuable at any time) but of getting by without, as if excessive expenditure were a leg or a kidney when it's more like a tumour. Plenty of advisers also like to encourage spending almost for the sake of it. ‘You don’t want to die with money in the bank!’ This can be wise… if someone’s miserly wiring is leading them to misery. But ordinarily the advice comes from an adviser stuck believing that numbers are the source of all meaning and confusing ‘more expensive’ with ‘better’. In a way, none of this is mad. It’s often commercially sane, and therefore completely understandable. Righting wrongs has explosive consequences when the wrong has been done so long that it’s become a part of who someone is. Challenging, let alone removing, parts of an identity, even obviously malignant parts, hurts like hell. Not least because chances are it’s part of an adviser’s identity too, and to challenge your expenditure is to challenge their own.\[3] It’s simply so much more comfortable for everyone to create a numbers-based need to remove apparent complexity, and have the sort of conversations that encourage nodding along for a few hours a year, rather than questioning if your life choices were as non-idiotic as they could be. This is exacerbated by the fact most clients are relatively old. Free of children and career-building responsibilities, and full of money, time, and life lessons, most 50- and 60-year-olds have as much productive time left as they’ve used up, but it doesn’t feel like it. So while admitting you’ve been in the wrong career for a few decades could spur you to spend the next few decades living a more fulfilling life, for the sake of illusory short-term ‘comfort’, it’s easier to admit nothing, and just wait to die without becoming too scared of running out of money instead. Clients hire advisers to help them blindly accumulate money, not use it to make their life any better, even though the first without the second is suicidally pointless. We all want challenge, because without it we cannot grow, but we run from it all the same. An advisory relationship is the perfect place to conduct life-choice challenges within a comfortingly controlled environment. But it’s incentivised to support deception, not defeat it. We’ll revisit reversing this unhelpful mess in Part Four.\[4] ## **Typical approaches to expenditure analysis provide only illusory benefits** ***Common tools used to analyse expenditure do not measure what we most need to know*** In the traditional numbers-focused world of most financial advisers, expenditure analysis falls into one of three categories: 1. Ignore it. Either because the client is so wealthy it doesn’t matter, or because you manage only a specific pot of their money, so it’s irrelevant. 2. Ask the client for a ball-park total. Occasionally accompanied by a request to divide this into categories like essential, discretionary, and aspirational. 3. Ask the client for a detailed breakdown. Usually via a questionnaire divided into as many categories as the cash-flow software that produced it believes best. As we saw earlier, this is filled in only under duress.\[5] Clients can sidestep the burden of work in the last two options by dumping a year’s worth of bank and credit-card statements on the adviser’s desk. Some clients go to the other extreme and turn up with spreadsheets so snazzy that they blind their user to the fact quantification doesn’t equal edification. The purpose of each of these approaches is two-fold: a) to estimate a total expenditure and check it isn’t going to lead someone to run out of money before they run out of breath; and b) to keep the compliance gods happy. Keeping the client happy is not the job of expenditure analysis, save for avoiding the discomfort of filling in a boring questionnaire or justifying what the hell they are doing with their lives. Expenditure estimations are commonly centred on bunging the numbers into a cash-flow model.\[6] While intuitively this may feel like the core of a financial-planning service (and indeed many advisory businesses are basically payment for an annually updated cash-flow-modelling exercise), this is a mistake. It’s the monetisation of the Micawber Fallacy – thinking that as long as your income:expenditure ratio is at a sustainable level across your lifetime, all will be well.\[7] When it comes to turning your resources into a Good Life, the ratio you want is not income:expenditure but whether something works to whether it doesn’t; whether your resource allocation is in alignment with your centre of narrative gravity. It is this we need to improve, and thus this we need to measure. Your income:expenditure ratio is ultimately a little pointless, because one way or another you always ‘spend’ all of your resources. If you ‘save’ some, you are allocating them to your future self. Everything you do symbolises a life choice, even the stuff you don’t do. \* This presents us with a categorisation problem. Your expenditure is a great – and very honest – guide to who you are, regardless of its relation to your income. But categorisation into wise and poor life choices doesn’t come easily. As we saw earlier in relation to house purchases, a single item can reflect wise and poor choices simultaneously, and what may be wise at one point – a glass of wine, say – may be unwise at another, e.g. when you’ve had ten already, or when you’re drinking it with a stockbroker. Life choices are a dance, not a series of steps. A life can benefit from being broken down, but it always needs putting back together before reaching any conclusions. An isolated expenditure may be ‘aligned’ with a high priority, but if it comes at the cost of a higher one, it may not be so smart.\[8] Whether something works or not isn’t determined by what shop it was bought in, or whether you can ‘afford it’ or not. Good expenditure analysis asks questions; bad analysis blindly accepts answers. The categorisation problem is rooted in our three chief sources of self-deception. The categorisations of poor expenditure analysis measure numbers, not narrative, what we have rather than who we are becoming, and by favouring ticking checklists over challenging actions, it encourages unthinking over thinking. A better model would meet the need for an observation stage in a modal shift from having money to living better with it, and act as a systematic set of triggers for thinking through what sort of life our choices are creating. Many advisers are well aware of the categorisation problem, which is why they’re often so apologetic about providing expenditure questionnaires, knowing that the effort to fill them in is likely to be wasted. But because they’re stuck in numbers world, they don’t see a solution. The typical approach isn’t wholly without use. Filling in a questionnaire can act like a food diary for a fatty: the very act of observation can inspire wiser choices. But it’s highly unlikely to lead to a transformation in how someone sees themselves and the world. At some level an expenditure questionnaire can highlight inconsistencies in the alignment of your values and your actions, e.g. if you claim to be a generous, charitable person, but donate less than you spend on stuff you never use. But the brain that made those choices isn’t going to flip into one that makes better ones simply by seeing the most obvious transgressions in a spreadsheet. {% content-ref url="/pages/-MBUSoAvcqtX\_X8A-YcJ" %} [2.2.1.5: The game of life is not a numbers game](/the-book/2/2.2/2.2.1/2.2.1.5) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] We’ll revisit the dangerous allure of cash-flow modelling in Part 3. \[2] Or, if they do, it’ll be in the socially fluffy, non-challenging way that demands a positive response, even when it’s a total lie. Like telling your grandma you love her cooking. \[3] I’ve noticed many times over the years that the only times an adviser did challenge a client’s expenditure was not when it was at odds with the client’s preferred narrative, but when it was at odds with the adviser’s own dreams. \[4] Part 4, Section 1.4. \[5] App-based solutions are increasingly available, though they all end up at the same place. \[6] Cash-flow modelling is important enough to get its own section later (Part 3, Section 2.3). \[7] See [Section 2.1.2](/the-book/2/2.1/2.1.2). \[8] Recall the couple from the story that opened this chapter. Their expenditure was ‘aligned’ with what mattered most to them – their children, but they were still doing it hopelessly poorly. # 2.2.1.5: The game of life is not a numbers game How to examine your life through the medium of your money ## **Show me your calendar and your credit-card statement and I'll show you who you are** ***Expenditure examination is the most important part of financial advice because it movers the focus from the numbers to the human*** ‘All we have to decide,’ said Gandalf, offering sage counsel to a Frodo reeling from a realisation of responsibility and wishing for a different set of circumstances, ‘is what to do with the time that is given to us.’\[i] The road to financial enlightenment, our journey of becoming wiser with money, so that we may more reliably, effectively, and effortlessly turn our resources into a Good Life, is an ongoing participatory process of interacting with money. This process is punctuated almost incessantly with little forks in the road – opportunities to decide what to do with the resources that make up who we are. At each fork, we are pulled one way by our wants (what makes life better), and another by our addictions (what makes it worse). The path we choose is an expression of our current capacity for conscious choice, and a shaper of our future one. Are we choosing to become wiser, or dumber? Are our spending decisions defining merely what we consume, or what we create? Whatever our intentions, our beliefs, and our wishes, it is with receipts that our story is written. When our story chimes with our soul, the result is a Good Life. This is why examining expenditure is the most important part of financial advice. When it comes to thinking about ourselves – the stories we our telling, with what they are aligned, and by what they are led astray – our expenditure is the most honest guide we have. Relevance is realised in application, not accumulation. It is an all-too-human belief that we are what we earn, yet your income tells me next to nothing about you; your expenditure tells me everything. Income may speak more loudly, but expenditure speaks more honestly. It’s an expression of choices, not circumstances. And its feedback loop is fast. This is about balance. We are wired to signal who we are; it has empowered our evolution, and saved our lives. Yet we’re also wired to do it in a way that works against the quality of the life we’ve saved. Problems arise not because of the action in itself, but the balance of attention. And right now, income has a hugely inflated sense of its importance. Fortunately, expenditure is not only more important, but also more malleable.\[1] We can change how we spend our resources immediately, with minimal effort or risk of unwelcome consequences. ### The Truman Show Test To fear the consequences of examining your expenditure is a sure sign of a life not well lived. An examination is not a judgment. It’s a question. A check that what you’re doing is working. It should be an ego massage. No ego massage has ever felt like a chore. Think of it as a ‘Truman Show Test’. If you wouldn’t be happy for the record of your life choices to be broadcast to the nation, why not? What does this suggest you should change? And what is stopping you changing it right now? Where public pronouncements produce pain, it probably pinpoints a propensity for panic-driven purchases. Yet there are lessons here, and they won’t be learnt via denial. Show me what someone desperately buys and I’ll show you what makes them miserable. For gamblers, it’s money, for dieters, health. Think also of what you *do* show off. Recall the conspicuous consumption con.\[2] Are you showing off the resources you’ve wasted? Or what you’re building with them? Examinations are frightening only for those that haven’t done their homework well enough. And if ever there were a topic worthy of homework, it’s what you do with your life. Yet knowing you are wasting resources and failing the Truman Show Test is not enough to do something about it. The self-deceived mindset that gets us into fearful positions also makes us flee from fear when it gets in our face. Dispelling fear requires changing not the circumstances, but the mindset, swapping self-deception for courage. This is what Part One of this book was about: changing not the matters we think about, but the mode with which we think about them. This mindset shift is characterised by a recognition, realisation, and above all remembrance (because what we’ve always known in our souls, society can sometimes shroud) that the focus of our attention with money should be the human who controls the resource, not the number that quantifies it. Behavioural Economist Dan Ariely wrote that ‘Maybe one day we will evolve as a society and base people’s salaries on their actual contribution to the common good.’\[ii] While this would be far from terrible, it’s still playing the same silly game that welds salary to self-worth. The point is to play a different game: to stop equating salary with personal value in the first place. And to rethink financial freedom, from a focus on having so much money that you no longer have to think about how you can help others in return for some (not that this ever seems to work, on any level – moral or otherwise) to a focus on freedom from delegating life choices, and from the game of signalling our worth by wasting our resources.\[3] Ariely’s comment falls into the same trap as those that believe that focusing on their savings rate gets right what focusing on income alone gets wrong. Ask not how much you’re saving, but whether you’re allocating your money as you should be (part of which will be towards helping out your future self). The broken-record message of this book is that when it comes to living a Good Life, it is not one’s money, but one’s relationship with it that is important. While one’s income is often a huge part of one’s identity – from the hedge-fund manager hinting at their holiday homes to the artist preaching about their poverty – it is one’s expenditure that is a more honest expression of what one is actually doing with one’s life, and therefore a greater guide to whether it’s any Good or not. Having your income sorted is no guarantee of a Good Life. Having your expenditure sorted isn’t either, of course, but it’s a damn sight closer. More importantly, the process of philosophically grounded examination which it should inspire is the means by which you wire yourself for living in a flourishing, flowing, way. Expenditure is the easiest variable to plug into this process, because vagaries in the variables are vicious veils when you’re trying to defeat self-deception, and our interpretations of time and energy are more easily distorted. Money is easier to make than time, and thanks to the enigmatic nature of our energy, not all time is created equal. Hear Goethe echoing Gandalf: ‘Tell me with whom you consort and I will tell you who you are; if I know how you spend your time, then I know what might become of you.’\[iii] \* In the next section we’ll look at the tactics that turn this theory into practice. The rest of the chapter explores a further refinement of cultivating a wise money mindset beyond the accountancy ins and outs. We’ll look at what goes on between the purchases with our muddled perceptions of more and enough, and price and value. The following chapter looks at the main obstacles to our desired rewiring: the ‘arrival fallacy’; confusing needs, wants, and addictions; and denunciation-driven over-corrections. ## **You are not what you accumulate, you are how you apply it** ***Practical steps to get you started examining your expenditure in the name of living a better life*** This, like all step-by-step instructions sections, is being held back for now. {% content-ref url="/pages/-MBSuyDmC1PC8p7RvXVx" %} [2.2.2: Enough is more important than more](/the-book/2/2.2/2.2.2) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] Moreover, part of what makes our job choices so resistant to course correction is a failure of expenditure examination. Pay better attention to what you spend and there’s a high chance it won't matter what you earn. When you retake control over your narrative gravity, you can more comfortably take more control over your career in turn. \[2] [Section 2.1.1](/the-book/2/2.1/2.1.1). \[3] We’ll return to a better model of freedom in \[a section I've not written yet]. \--- \[i] J.R.R. Tolkien’s Gandalf, *Lord of the Rings, book 1* \[ii] Dan Ariely Q\&A column, 10th August 2019 \[iii] Johann Wolfgang von Goethe, *Aphorisms* # 2.2.2: Enough is more important than more Living in alignment with your values beats living large Understanding the importance of living an examined life, to express your soul through your spending, is all well and good, but it needs to be applied. The temptation to see not an ongoing process, but a destination to be arrived at – and therefore to believe it can be dealt with later – is strong. It leads us to accumulate ‘more’ while we work out how to allocate it later. In theory, this seems sensible. But in practice, it has never worked. ‘Of wealth,’ wrote Solon, in the 6th Century BC, ‘there is no limit that appears to man, for those of us who have the most wealth are eager to double it.’\[i] Beset by cowardice, we are addicted to delay, and forget to live. Later never comes. And in the meantime, we allocate our resources in wasteful ways by default. The ‘more’ monster sits between us and the Good Life. It’s time to tackle it. {% content-ref url="/pages/-MQ7iYVBk0SEJb6Bwc7z" %} [2.2.2.1 Give, give, give, me more, more, more](/the-book/2/2.2/2.2.2/2.2.2.1-give-give-give-me-more-more-more) {% endcontent-ref %} \--- \[i] Solon, quoted in Charles Eisenstein, *Sacred Economics* # 2.2.2.1 Give, give, give, me more, more, more Our words may say we value quality over quantity, but our actions say otherwise ## **The Midas Mirror** ***To avoid sacrificing life in the pursuit of ‘more’ takes more than seeing the stupidity of doing so*** Were I to read the title of this section, I’d be tempted to skip ahead. No one is a stranger to the silliness of forever chasing after ‘more’ – be it more earnings, more surface-deep status, more… *stuff*. The very definition of the word guarantees that a mindset fixed on ‘more’ can never be satisfied. I’d be bracing myself for an annoyance of anecdotes about modern-day Midases, with mansions full of gold and minds full of misery. I’d be worried about having to read *that* Joseph Heller anecdote again.\[1] Yet all the world has heard the story of Midas and no one lives as if they’ve learnt its lessons. My aim here is not to point and laugh at already visible idiocy, but to engender a better appreciation of the dangers hidden in the implications of that idiocy. Why do we smile at the logic, console ourselves for not being as bad as the bankers, and then continue to ignore the lessons? Why are we so enchanted by the very dream of more that we don’t see the subtler ways we live under its spell? How can we see more clearly, and act more sanely? \* As with all self-deception, ‘more’ is so dangerous because it seems so sensible. And because it seems so sensible, it becomes a default. In isolation, more money is good. Whatever we want to do requires resources. Not always money, of course, but money is seen as a universal convertible resource, so if in doubt, we grab as much of it as possible so that when life isn’t happening in quite so lively a way, we can distribute that money towards living. Trading a temporary excess of money for more stuff that contributes to the goodness of life is good. Saving more when we’re not sure of what will contribute to the Goodness of life right now is also good. But that’s not how it works. Just as turning everything into gold made Midas miserable, so turning your time and energy into gold with the intention of turning it into a Good Life later doesn’t work. Because the mindset that believes it wants ‘more’ will always do so. I’ve met too many clients decades into careers that don’t light them up, living in houses they own largely for their perceptions of others’ perceptions of them, and who squander their sky-high earnings on mirages… what starts out as seemingly sensible slowly, surreptitiously, self-deceptively, but very surely, turns into shit. While we remain set-up to earn to signal not what we’ve earned, but what we’ve lost, in a grand performance of deliberate, but unconscious, wastefulness, when we pursue ‘more’ we subtract, not add, value to our lives. Unexamined saving is just as much a waste as unexamined spending. For saving is simply a subset of spending – spending on your future self. This can be a conscious constraint on wasting resources in the present, or an unconscious kicking of a can into an indeterminate, imaginary, future. It’s common in financial advice to see people accumulate a ‘rainy-day’ fund large enough to cope with a Biblical flood, and yet when a bit of drizzle arrives, they still worry about trying to cover the construction of an Ark from current income. Delaying resource allocation is more commonly done not because we’re working out how to do it well, which would be wise, but precisely to avoid having to work it out at all, which is idiotic. When we do idiotic things with money, it is (usually) not because we are idiots; it is because we’re self-deceived. The myopia of ‘more’ reinforces the view of the value of money being about numbers, rather than narrative. It focuses on money’s incidental quality of convertibility, rather than the integral meaning associated with what we do both to gain and use it. Dreaming of ‘more’ promises us external stability, yet delivers an internal void. It suggests it will create space for examination, while enabling a lack of it. It deceives us into thinking we’re being sensible, when our actions are nothing of the sort. It’s sensible to have a default, but it’s dangerous to have a bad one. ‘Life happens’ should be an inspiration for examining our lives, not an excuse for why we didn’t. ## **If others set your goals, whose life are you living?** ***If we don’t examine our expenditure, we’re prone to being told what to do by those trying to sell us something… anything*** Hitching the power of self-deception to the power of default has implications beyond a bit of thoughtless spending. When we live our lives as if we’re in one of those meetings that, deeming it too difficult to reach a conclusion there and then, concludes to have another meeting instead, we do more than just delay decisions. We delegate them… unthinkingly. We can’t delay the decisions that wire our brains, and shape our lives, so when we don’t make them, we create a void for someone else to. And that someone else is rarely going to lead us towards the fulfilment of potential that makes life flourish most delightfully. We’re so busy chasing riches that we forget why we’re doing so in the first place. It’s a story as old as the concept of riches itself. ‘The change from landed to movable wealth,’ historian Will Durant tells us, ‘produced a feverish struggle for money, and the Greek language had to invent a word, *pleonexia*, to denote this appetite for “more and more,” and another word, *chrematistike*, for the busy pursuit of riches.’\[i] ‘Busy’ in any arena is rarely a sign of wisdom. For busy forgets the crucial step of checking if what we’re being busy about is actually worth it. When it comes to this busy pursuit of more, we’ve got at least two millennia of case studies, and the results are far from debatable. Sadly, the proof that this is no way to live is matched by the depth to which the belief it is runs through our cultural grammar. Once you train yourself to catch the ways in which you and others use ‘more’ to mean ‘better’ without challenge, you’ll understand how much this is part of everyone’s worldview. This is why we get stuck in self-deceptive cycles: we think we’re thinking, but we’re really only believing and parroting back centuries-old cultural conditioning, when something doesn’t work, we don’t question why; we just try again. \* Self-deception is a question of substitutes. When faced with an indissolubly complex situation (as life tends to throw up) rather than work out something that may work, we grab for a simple substitute that won’t, but that we can kid ourselves might. Need a lift? Upgrade your car, or your wine choices. Feeling empty? Buy a house with more empty space (and then fill it and repeat). Not sure what contributes to quality of life? Start with quality of craftsmanship. The two do sometimes go hand in hand. However, quality craftsmanship is everywhere. Anything can be well-made. Well-made choices start with prioritising something over anything, regardless of how pretty it is. When we substitute something made with care for something we care about, we get stuck in an endless cycle of unsatisfying consumption. Our epidemic of unexamined expenditure means we substitute what we want to buy with what we’re sold. The former has a good answer for ‘why?’ The latter doesn’t have a good enough answer for ‘why not?’ The difference is profound. And it’s a reason why having more ability to buy things doesn’t lead to a better life. There’s only so much stuff you can own that reliably adds value to your life. When you buy blindly, the more you can afford means you accumulate so much shit that the truly valuable things get lost in the storm. In the words of Nassim Taleb, ‘When people get rich, they lose control of their preferences, substituting constructed preferences to their own, triggering their own misery. And these are the preferences of those who want to sell them something.’\[ii] ‘Generally speaking,’ wrote Alan Watts, ‘the civilized man does not know what he wants.’\[iii] This leads us to strive for ‘by-products’ of ‘real things’… they look the part, but are ultimately unsatisfactory. ‘Money,’ says Watts, ‘is the perfect symbol of all such desires, being a mere symbol of real wealth, and to make it one’s goal is the most blatant example of confusing measurements with reality.’\[2] \* A salesperson’s job is to reduce your perception of the universe of possibilities open to you for allocating a given pot of resources. It is to make you consider only the monetary cost of whatever they’re selling in comparison to something else it’s clearly better than. However, your basis of making a good decision is not the monetary cost, but the opportunity cost – which is precisely what the salesperson is trying to get you to overlook. You want to be convinced of something before you buy it. The salesperson seeks only to persuade you for a moment. You want to meet a need. The salesperson wants you to keep trying. Because our belief that the price of something to the world is a valid proxy for the value of it to us,\[3] then more stuff or more money must equal more value… so for a better life we must keep on spending and keep on earning. When this doesn’t work, it’s not the fault of the stuff, it’s just a sign we need yet more. Because we want better, and better means more. It never ends, because it can’t. Life choices never end. Not making them for ourselves creates a void for someone else to. In the land of the money blind, the shopkeeper and the marketer are kings. If we don’t open our eyes, we’re asking to be guided not by our wants, but by the most persuasive pusher of their own. Once upon a time, substituting the tribe’s wants for your own was probably wise. Chasing personal wants was a fast-track to ostracism, and consequently death. However, nowadays you should want to escape tribes that would cast you out when your values don’t align with theirs. Outsourcing your thinking is often good. Because in most aspects of life, you’re an idiot, and you’re better off listening to someone who isn’t. But when it comes to what to do with your money, time, and energy, it pays to keep control. ## **Are you a human being or a human having?** ***What your stuff says about you should be supplementary to something less superficial*** I had a client once, let’s call him Matt. Matt was cool. Rogueishly handsome, with the sort of unruly blond hair some folk pay hundreds of pounds for but which on Matt came as standard. He made TV shows for a living. You’ve probably seen at least one of them, and heard of a dozen more. He was far too cool to care about money. And this was a problem. In making these shows, Matt spent a lot of time in the natural home of ratings-winning wacky lifestyles: America. Keen to share his adventures with his family, remind them he was still alive, and reassure them he hadn’t got sucked into a cult, Matt called home. A lot. From his mobile. In the days before WhatsApp. His basic mobile contract was for £40 a month. He regularly racked up bills of over 10 times that. Of course he didn’t have to. It would’ve taken 10 minutes to sort a more sensible deal. But sensible isn’t cool. As we learnt earlier, we signal our worth by wasting it. *Wealth is not so much possessed as it is performed*… and in the majority of cases, we are blind to the performance. Matt did not deliberately waste his money. Like most people who think about money in profoundly unhelpful ways, he isn’t an idiot. But he does idiotic things. And, because we see these things as isolated outbreaks of idiocy, rather than a chain of consequences of a self-deceptive worldview, we pay too little attention to wising up and doing anything about them. Even when the stakes – the potential for living a more flowing, flourishing, life, and making every moment money comes into our minds that bit more marvellous – couldn’t be higher. \* ‘Men,’ wrote Schopenhauer,\[4] ‘are a thousand times more intent on becoming rich than on acquiring culture, though it is quite certain that what a man *is* contributes more to his happiness than what he *has*.’\[iv] Matt’s phone-contract insanity was not a calculated means of showing off. Bragging about the cost of something is, after all, the least cool thing you can do. But you don’t need to be a Hermès-tie-wearing braggart for your mind to operate in an unhelpful mode. Built by brains evolved for a different era, and reinforced by societies haunted by tribal ghosts, it is the default setting for all of us, including the sort of hippies that preach about how we’re human beings, not human havings, duuuuude.\[5] Matt believed the odd few hundred, or even few thousand (when rolled up into an annual amount) didn’t really matter. He could afford it. It was a little uncomfortably extravagant, but what was the point of earning all that money if he had to bother about searching for a better phone deal? What Matt didn’t see was the connection between a paltry phone bill and every other way money played a role in his life. Every other purchase, and every other thought. Each interaction with money was both an expression of, and a reinforcement of, a wasteful mode of existence. We saw in the introduction the difference between a relationship with money based in the having mode as opposed to the being (or becoming) mode. The difference between seeing money (or the things it buys) as something you ‘have’ that is incidental to who you are, or as an integral part of who you are – a means of both shaping and expressing the story you tell yourself about yourself, and your place in the world. The problem with the having mode is that it traps you in the casino, playing a game you can’t win, while tricking you into believing you’re always moments away from doing so. The giveaway sign of someone stuck in the centrifugal shitstorm of the having mode are the words ‘I don’t know what to spend it on’. The having-mode person wears their expensive tastes as a badge of honour, hoping you will believe as they do, that their worth is measured in the quantity of their money. The becoming-mode person’s worth, in contrast, is measured in the quality of their choices. We have an intuitive understanding of what we want – we feel we’re living the Good Life when who we are and who we want to become align. We desperately seek this alignment in all of our actions. Which is precisely why we bugger it up: desperation drives us towards shoddy substitutes. We substitute owning some things for becoming something, and simplistic short-term salves for long-term comfort with complexity. However, tailoring can only do so much to hide a gut, and it can do nothing to hide a git. We want to learn and grow – we want *becoming* – but we’re so desperate to do so, that we buy the ‘answer’ – the *having* – as a substitute for the learning, even though this leads to stagnation, rather than growth. The having mode isn’t all bad. It’s getting stuck there that’s the problem. Working out what you really care about can be hard. A big data set of past expenditure to interrogate can help. What value was each item in aid of? And did the attempt to express it work? {% content-ref url="/pages/-MQ7ijIGpYJ9c-0c71Dv" %} [2.2.2.2 If less is more, then more is also less](/the-book/2/2.2/2.2.2/2.2.2.2-if-less-is-more-then-more-is-also-less) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] For those yet to encounter it: Joseph Heller was at a party with a [wunch](https://en.wiktionary.org/wiki/wunch) of Wall Street bankers. Heller was pointed to a twentysomething trader, and told ‘See that guy? He made more money last year than you will make in a lifetime of writing your books.’ Heller, casual as you like, replied: ‘No doubt. But I have one thing he never will.’ Heller’s companion laughed. ‘Oh yeah, what’s that?’ ‘Enough’. \[2] We are all, in some way, like the quantification-obsessed orthorexia sufferers, that, after embarking upon a strict dietary regime in the name of becoming healthier, focus on the quantification over the health, and make themselves stressed and unhealthy because of it. \[3] This is the subject of the next section. \[4] We shall assume in the earlier ‘humankind’ definition of the word. \[5] We’ll revisit the dangers of denunciation as a form of attachment in the next chapter. \--- \[i] Will Durant, *The Story of Civilization, vol. 2* \[ii] Nassim Nicholas Taleb, [Facebook post 16th January 2016](https://www.facebook.com/story.php?story_fbid=10153550809308375\&id=13012333374) \[iii] Alan Watts, *The Wisdom of Insecurity* \[iv] Arthur Schopenhauer, *Essays*, “Wisdom of Life” # 2.2.2.2 If less is more, then more is also less Less of one thing means more of another, and money is only a small part of this ## **There’s no such thing as a free lunch** ***‘Less’ and ‘more’ both come with a cost, because they indicate a trade, not a state to be aimed for*** ‘Less is more’ usually indicates incoming idiocy. It *could* be the wise motto of a person who’s internalised seeing the opportunity cost of every money decision. Of someone who sees beyond myopic money boundaries, and knows that more of one thing is *always* less of another. Who when presented with a ‘more’ is on alert for the corresponding ‘less’. Who is on guard against the narrowing of options that characterises the salesperson’s surreptitious art.\[1] Who, in short, sees less and more not as isolated signals of deprivation and abundance, but as two sides of a trade. Such a person wouldn’t be caught comparing House A to House B without also comparing both to retiring 20 years sooner. They’d acknowledge that choosing between a holiday to Budapest or Bucharest may be easier, but choosing between any holiday and coaching in one’s favourite pastime, say, is wiser. Recall the couple from the story that opened this chapter: they discovered less job wasn’t only less money, but more time with children, and more energy in that time (among a host of other things). Parents on the whole know that having children means less of everything tangible and more of stuff that isn’t. There are, naturally, opportunity costs everywhere, from the mental clutter associated with material clutter, to worries about loss associated with possessions of any kind. Becoming wiser with money is in part a process of seeing opportunity costs as clearly as monetary ones. And – because thoroughly analysing opportunity costs with every decision is impossible – of establishing them as the decision-making default. Rewiring ourselves in this way is vital, because some lessons can be learnt only in hindsight. For example, most of us understand that the worst in-the-moment events often have the best long-term effects; but few understand it so well that the next apparently terrible moment inspires not a cascade of negative emotions, but sparks an immediate speculation for what the bright side will turn out to be. However, when we hear ‘less is more’, this web of wiser thinking is never what it means. Its common translation is: ‘simple is better’.\[2] And in the contexts in which it’s often used, this is dangerous. \* ‘Less is more’ is used to justify moving away from a ‘more’. Not on the grounds that the (total, opportunity) cost is too high, but on the grounds that ‘more’ is bad. Whether emblematic of an ideology or simply sour grapes, it’s the sign of a mind stuck in self-deception. The judgment is still firmly numerical, rather than narrative: something is good because it is small in number, not because that small number is telling a better story. Even when the aim is ‘having’ less, the focus is still the having something, not the process of becoming something. And by sounding like a conscious conclusion, it masks understanding rather than increases it. Blindly swinging via soundbites from one unconscious conclusion to another is evidence of avoiding thinking, not doing any. This isn’t about minimalism; it’s about making better money decisions. Minimalism can be a means to seeing more clearly, but it’s commonly used instead as an excuse for not looking. This isn’t about the output: two people can end up in the exact same external place (say, identically furnished homes, or identical investment portfolios) and it be right for one and wrong for the other. Financial Enlightenment is a participatory process, not a destination. Minimalism is better than Mammonism, because it’s inherently less wasteful, but it’s still stuck playing the same self-deceptive game. As with the earning maximisers v spending minimisers we saw earlier,\[3] minimalism can be useful as a temporary means towards a greater end – cutting back on everything before building back up only what’s truly important, based on a more conscious examination of one’s life. But it is not an end in itself. Seeing minimalism as an end in itself doesn’t so obviously waste resources, but it’s delaying the decision on how to allocate them, not making it. In the grand cost-benefit analysis of life, self-deceived minds are blinded by the benefits, and blind to the costs. We see mansions, but not the unenjoyed hours. We see titles, but not the existential turmoil. We see the abilities projected, but not the responsibilities repressed. We see the show of wealth performance, not the reality of wealth possession. We remain blind to what Thoreau deemed the real cost of a thing: ‘the amount of what I will call life which is required to be exchanged for it.’\[i] I’ve been lucky on this score. Firstly, by studying economics. As noted earlier, the specific models you see in an economics textbook are notoriously mostly nonsense, but that’s not the point. You train to see trades. Everywhere. Secondly, with a career in financial planning, I ended up in the best position to see inside the heads of those that had the most money to trade. You think any one of them woke up every morning and felt good about their mansions anew? Of course not: it was just a house. The same way everyone else’s house is just a house.\[4] No 'gratitude journal' can change that. ### The billion-pound thought experiment Having more money requires more working out what to do with it. Not less. More money provides more opportunity for turning it into a Good Life, but this doesn’t just happen. The unexamined life doesn’t stop being not worth living because there are more monetary opportunities you’re not examining. One of the most disappointing aspects of working in financial planning is being reminded that one of the main motivations for racking up stacks of cash is to avoid thinking about how to allocate it. As above, we err when we see money only in terms of ability rather than responsibility. This is moronic. Failing to think about money is a guaranteed way to waste it. To pursue money so you don’t have to think about it is to believe that being able to spend blindly without going broke is a better aim than using your money to improve your life. Imagine you have enough money to do absolutely whatever you want. The sort of sum that leaves you zero excuses for not being able to open doors, realise dreams, mould the world as you see fit. Now double it. For the sake of argument, let’s call it £500 million.\[5] Now imagine someone gives you another £500 million. Remember, the first £500 million was enough for you to live as perfectly as possible. So this second one is a detraction from that. There are worse burdens, but it is a burden nonetheless. Even if you just give it away, there are costs to doing so. And of course a huge amount of responsibility. You’re basically a mini government, or aid organisation, whether you want to be or not. You know the enormous good £500 million can do. You have to be some sort of monster to just blow it or burn it. But your perfect life didn’t include making this decision. Travel back from your imaginary billion to your real-life sum. At what point does the responsibility go away? ## **Healthy balance** ***There are few things for which more is always better; money is not one of them*** I’d like you to meet Nigel. Nigel was an awkward, miserable, client. The sort of smart-arse pernickety type that made my boss hunt for excuses to not see him. For most financial advisers of the ex-insurance salesmen variety, clients that ask questions are the worst part of the job. Nigel’s business, which seemed to cause him nothing but grief, and which he stuck with more because he’d built it than because he liked it, was looking like it could be sold. ‘So how much would be enough?’ my boss asked. ‘How much would be enough to do whatever you felt like for the rest of your life?’ ‘£2.5 million,’ Nigel rushed back, clearly having calculated it already. Fast forward six months. Nigel’s back. He’s brought his wife with him, albeit it looks like this was not his choice. He’s sold his business. ‘So how much did you get?’ ‘£10 million.’ ‘Wow. Congratulations. So is that it? Have you left yet, or are you still winding down?’ His wife smiled. Or rather smirked. ‘No, no. I’m staying on, actually. I’ve an earn-out deal that means if I stay for another five years, albeit without a salary – I get another £15 million.’ Nigel had no plans for this extra money, of course. He’d already got four times as much as his ‘enough to do anything’ sum. In his hunt for justification, he did not say anything about what he’d do with the money, for himself, or others. Instead he bumbled out some noises about stewarding the business, and ‘being there’ for his team. After none of these survived an interrogation that never progressed beyond a gentle tickling, my boss was moved to suggest that whatever message Nigel was struggling to send, the one being received was that Nigel was choosing to spend his time with his colleagues rather than with his wife and two young children. His wife agreed. Nigel wasn’t really choosing this, of course. But when a brain wired by a lifetime of unhelpful messages about money met a great big sack of it, he saw only numbers, blind to their more important narrative consequences. Through the narrow lens of ’20 years to make £10 million, and only five more to make another 15!’ there was only one choice. His wife, however, could see other choices more clearly. Ones that would undoubtedly enrich their lives in ways extra money could not. In the end, Nigel walked away from the job. He still sends my old boss a card every year to thank him for the tickles. \* As Nigel and our billion-pound thought experiment show, when we widen our sights, and see the trade-offs inherent in every decision, we see that more money is not always a Good Thing. The only things for which it can be half-decently argued that more is always better are not bought, or earned, but experienced as side-effects. Your life cannot be too Good, you cannot be too wise, or too courageous, or too thoughtful, or too loving, etc. Though you can spend too much money, time, or energy actively trying to become these things.\[6] A common defence of a blind devotion to chasing more money as an unalloyed good is that money can be used to buy time. This is true, of course. Just as it’s true that we buy money with time and energy, commonly by selling our best time and energy to an employer.\[7] Far too much ‘buying time’ would be better avoided by cutting out the middleman. But when stuck believing that more numbers are better numbers, it’s easy to fall into the trap that selling health to buy money and then using that money to pay for a personal trainer is better than living healthily for free in the first place. Moreover, most of the people you hear preaching about ‘buying time’ are doing nothing of the sort. They’re mostly trying to justify being incapable of finding enjoyment in doing the washing up or using public transport. No one shouts louder about buying time than a workaholic that is too stressed to enjoy simply breathing, and believes if something is free it cannot possibly be fulfilling. \* The Good Life is not a weighted average. Drift too far from ‘enough’ on any component, and life as a whole starts to suffer. And money is by miles the area where most drifting into excess happens, and will continue to happen unless we rid ourselves of the belief that more of it is always better. Nigel’s additional money did not offset health or relationship concerns. Yet he – and countless others – act as if it does. What makes Nigel worse is that throughout his life, nothing had ever stood in the way of the chance to fulfil his potential.\[8] I never met a client that wouldn’t swap millions in the bank for better health into middle- and old-age. But hold up a mirror to how they’d dedicated their lives up to that point to doing the exact opposite and they’d look away, refusing to acknowledge that they’d firstly made some poor choices, and secondly still had plenty of time to correct them. They’d use their money not for improving their health, but for making it ever-easier to stay sedentary. \* The Greeks had a word, *sophrosyne* – which conceptualised an idea of excellence of character and soundness of mind. When combined in one well-balanced individual, this combo naturally gave rise to other virtues – such as decorum and self-control – as side-effects. Though often translated as ‘temperance’ or ‘moderation’, these suggest ‘settling’, which sophrosyne shouldn’t. Sophrosyne – like ‘enough’ in the context of this section – has nothing to do with settling. It is a form of self-control, but in the sense of rejoicing in control by yourself, not by others, as opposed to desiring and then denying something. It is an active understanding and embracing of the balance that makes for a Good Life. It is a means of tempting yourself into the Good Life, by engaging with the actions that cultivate it. It is a bridge between where you are and where you want to be. It links the apprehensive feelings associated with the short-term discomfort attached to any sort of desirable growth with the excitement of doing that growing. Once you’ve got there, not only is the apprehension gone away, but so is the yearning to fulfil that part of your potential. It is the thrill a fearless child feels on going to a music lesson to spend an hour being crap at playing an instrument. As anyone who’s ever stood on a slackline knows only too embarrassingly, balance is active, not passive. Balance isn’t about not moving; it’s about incredibly refined, skilful movement. It is the opposite of the soul-killing existential inertia we looked at in Part One.\[9] Importantly, balancing in life, like balancing on a slackline, happens as a side-effect. All good outcomes do. You don’t balance by trying to balance. You balance by making the right movements that each in-the-moment set of circumstances require. Do this often enough, and you start to do it automatically. The work is not in the performance but in controlling your environment in order to learn. If you’re striving after it, you’re doing it wrong. And whereas when learning it may be helpful to break down those movements into each arm, or foot, or toe, or core, it works only when you put it all back together and see the body as a whole. Moving from seeing isolated numbers to a whole human is the purpose of this chapter. Money management means nothing if it’s not part of human-meaning management. Nigel learnt, and the rest of us should remember, that ‘Any man who does not think that what he has is more than ample is an unhappy man, even if he is the master of the whole world.’\[ii] ## **Can you count?** ***To make wiser decisions, recognise that you cannot count accurately*** You may have been doing it since you were three, but you’re crap at counting. Don’t worry, everybody is. Sure, you can add one to any given number, but you can’t count in a meaningful way. Recognising this is key to making wiser decisions. In terms of how numbers translate to meaning, counting tends to go something like: one, two, three, some, lots, loads. We’ve seen how important precise appreciation of opportunity costs can be to making wiser decisions. Recognising commonly overlooked inputs is crucial, but if you can’t count them properly, your decision-making could still suck. When it comes to getting a grip on making the most of your resources, it would be great if you could appropriately distinguish between a million and a billion, but you can’t. No one cares 1,000 times more about a billion than a million. They’re both ‘loads’. One is intellectually a bit bigger than the other, but in terms of guiding our actions, one unimaginably large number is pretty much the same as the next one. This is a problem, because to make wiser decisions, we often need to be sensitive to this sort of scale, but our decisions are driven by feelings that aren’t up to the job. In these situations, we need to find a way to delegate the decisions to the calculators. This often feels weird and inhuman, but not doing so could lead to inhuman actions. This is felt most keenly in donating to charity, where our gifts tend to be subject to the assertion possibly misattributed to Stalin, that ‘a single death is a tragedy; a million deaths is a statistic.’ One ‘identifiable victim’ will forever exert more influence over our wallets than a million otherwise identical souls. As Nate Soares wrote:\[iii] > The loss of a human life with all is joys and all its sorrows is tragic no matter what the cause, and the tragedy is not reduced simply because I was far away, or because I did not know of it, or because I did not know how to help, or because I was not personally responsible. Knowing this, I care about every single individual on this planet. The problem is, my brain is simply incapable of taking the amount of caring I feel for a single person and scaling it up by a billion times. I lack the internal capacity to feel that much. My care-o-meter simply doesn't go up that far. And this is a problem. This isn’t just about charity (though as we’ll see later, that has a uniquely important role to play in – selfishly – allocating resources towards each individual interpretation of a Good Life). Just as Soares continues, that ‘prominent altruists aren't the people who have a larger care-o-meter, they're the people who have learned not to trust their care-o-meters’, so those living well aren’t those that are better calculators of the opportunity cost of every decision. They’re the ones who’ve learned to better control their decision-making machinery. Who’ve learnt to live examined lives with a view to focusing on what makes their lives better and ignoring everything else. Who’ve learnt, as per our earlier discussion of ‘the two types of financial errors’,\[10] to cultivate better filters for problem formulation, and better processes for problem solving. Alas, the mind-altering drug of ‘more’ makes us abandon any idea of a filter. And it doesn’t matter how great your processing power is if you’re tidying up stuff that should’ve just been thrown away.\[11] There is, however, a potential upside. Our inability to cope with big numbers is bad when thinking about the world, but it could be good if we’re thinking only of ourselves. If we learnt to trust that we were incapable of feeling any different if we hoarded wealth on any part of the ‘loads’ scale, from ‘can easily afford the odd holiday’ to ‘billionaire’, we’d probably waste less of our lives trying to gain more wealth simply for the sake of it and do something a bit more meaningful instead. We may come to understand, as explained by Derren Brown in *Happy*, that ‘while it remains clear that having less than you need is a source of unhappiness, having more than you need does not make you happier.’\[iv] {% content-ref url="/pages/-MQ7ipoTEoGe\_RiKso07" %} [2.2.2.3 Enough is enough](/the-book/2/2.2/2.2.2/2.2.2.3-enough-is-enough) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] As described in ‘[Are you a human being or a human having?](/the-book/2/2.2/2.2.2/2.2.2.1-give-give-give-me-more-more-more#are-you-a-human-being-or-a-human-having)’ in the previous section. \[2] Add footnote when written up simple-complicated-complex bit somewhere \[3] [Part 2, Section 2.1.1, ‘The maths revisited’](/the-book/2/2.2/2.2.1/2.2.1.1#the-maths-revisited). \[4] Beyond a very low threshold of it not falling apart, or forcing you to fall over people that bring you down. \[5] The number is, of course, irrelevant. If you believe you need more than this to live as perfectly as possible, or indeed spend more than a few seconds trying to work out what your ‘number’ is, by all means pick a bigger number, though please do also seek help. If you believe you need billions to live as well as you possibly can, something is truly, terribly, wrong, and you need faster and better help than any book will ever be able to provide. \[6] This is not the place to dig more deeply into this, as it mostly leads to an unhelpful fight over definitions of what, say, being ‘too loving’ really means. For our purposes, it is enough to conclude, with Epicurus, that ‘Nothing is enough for the man to whom enough is too little.’ \[7] And not only the contracted hours, of course, as anyone who’s ever ‘taken their work home’ in the form of stressed shoulders and poor posture knows only too well and ignores only too easily. \[8] As per [Part 1, Section 4.1](/the-book/1/1.4/1.4.1), ‘watching people squander opportunities is never joyful…’ – maybe even more so for a Nigel than for a Messi or a Michelangelo, given there are so many more Nigels out there. \[9] [Part 1, Section 2.1](/the-book/1/1.2/1.2.1). \[10] [Part 1, Section 1.3](/the-book/1/1.1/1.1.3). \[11] See [Rule #1: Chuck out before you tidy up](/the-book/1/1.5/1.5.3#1-chuck-out-before-you-tidy-up). \--- \[i] Henry David Thoreau, *Walden* \[ii] Epicurus, quoted in Seneca’s *Letters from a Stoic* \[iii] Nate Soares, *On Caring*, \[iv] Derren Brown, *Happy* # 2.2.2.3 Enough is enough Consciously choose quality over quantity and break the link in your mind between more and better ## **Luxury, good?** ***Luxury is a signal, but to non-deceived vision it signals stupidity, not success*** ### The Treat Trick Buying stuff because we can, rather than because we really want it lies behind the market for luxuries. The perceived value of a luxury is based not on function, or beauty, but on having it while others do not. It is possible that the subjective value of something to someone, independent of that someone’s insecurity-driven perceptions of others’ perceptions of them, could coincide with that something being seen as a luxury, but it’s of negligible concern relative to the luxuries where this isn’t the case.\[1] Luxury goods are a fascinating phenomenon. To one way of looking, they advertise our *lack* of value as a human (those confident of character need no such crutches), while to another they do the opposite (those that see luxuries as symbols of worth, or even substitutes for a soul). People who use their wealth wisely do so to effortlessly *express* character, not struggle to create it out of cash. Yet this is rare among the living. When people die, only the truly bereft of human value would be praised for their possessions or the size of their last bonus, yet while still alive, this is a common default for judging not only others, but ourselves. Our judgment of human value is so wedded to what we have, rather than who we are, that we accumulate the former instead of cultivating the latter, and, as we’ll see later,\[2] even those that denounce this means of judgment are playing a distorted version of the same game. Luxury goods are merely the showiest example of a mindset that is created, cultivated, and continually reinforced by a society set up to stop people from ever knowing what they really want to do with themselves – and by extension their money. As Alan Watts wrote: > Generally speaking, the civilized man does not know what he wants. He works for success, fame, a happy marriage, fun, to help other people, or to become a ‘real person.’ But these are not real wants because they are not actual things. They are the by-products, the flavours and atmospheres of real things – shadows which have no existence apart from some substance. Money is the perfect symbol of all such desires, being a mere symbol of real wealth, and to make it one’s goal is the most blatant example of confusing measurements with reality.\[i] ‘We are in love with not things,’ says Watts, but ‘measures; not solids but surfaces.’ This has catastrophic consequences. Defenders of luxury expenditure sound a lot like drug addicts and over-eaters. Something ‘feels good’, ‘makes me happy’, is a ‘treat’ or a ‘reward’, could be given up instantly if needed, etc. Crucially, there is always a separation of self and object. And the object is always an addition, never a catalyst for levelling-up life from the inside out. Why is it that everything we traditionally describe as a ‘treat’ leaves us poorer and in worse health?\[3] What sort of ‘treat’ leaves us with less money, and lower long-term energy? The phrase ‘I deserve it’ is indicative of deprivation. Deprivation is not a strong base for wise decision-making. Never shop for food when you’re hungry. We see again that the common mindset is wired for waste. The *idea* of a ‘treat’ – something rewarding, cherishing, and that symbolises savouring the high points of our lives – is clearly a Good Thing. But to do it by wasting the very resources of that life, often with poison, is pretty clear evidence that we’re stuck playing a damn silly game.\[4] Luxuries, if they are to make sense, should be the show-off symbols of mastery; ‘useless’ movements that prove true facility with, and bring out the fun in, the fundamentals. Instead we use to pad our already plush cells. We see this clearly enough when presented with the extreme versions in Emirs, Emperors, and entourage-laden sports stars, but we remain blind to the same drivers dictating our subtler, but equally silly, behaviours. ### Culture v society One of the more interesting aspects of luxury is where people don’t care for it. The School of Life argues that: ‘The desire for luxury is inversely related to the level of dignity of an average life’. \[ii] It cites Denmark as ‘a country which boasts the third highest level \[of] per capita income in the world and one of the most equal distributions of wealth anywhere’, and which is ‘rather inimical to luxury’. The School of Life attributes the impulse to buy luxury goods to two factors: fear of being average in societies where it is dangerous to be so; and a desire to advertise one’s difference when ‘being the same means to be very short of dignity and respect.’ The gaudy golden garlands ‘are forms of protection against the terror of an average life, in societies where average means appalling.’ Societies bond through insecurity and fear. They isolate and attack anything out of the ordinary as a threat to the tribe. They have rules to govern transgressions. You are in, or out, and it’s not up to you. Luxury goods, as symbols of the separation between different strata of society, are an expensive entrance-fee, perfect for reflecting and enforcing these rules. But there is a better way. As the world’s borders blur, and geography’s grip on the governance of our lives loosens, to be cast out of your local tribe isn’t such a problem. You don’t need a strictly bordered society running on rules when you have a global network of cultures defined by and expressive of evolving traditions. We want belonging, connection. In a society, belonging comes from rules; in a culture, it comes from traditions. Rules are something you have. Traditions are something you express, and help to create, or evolve. Societies use symbolic possessions to know who is in, and who is out. Cultures identify each other through character. Societies are bound together by shared external goods; cultures, by shared internal values.\[5] One’s society, as defined by geography, may be wedded to unhelpful worldviews, but societies are wedded to all sorts of nonsense that, assuming one doesn’t live in an authoritarian state, one doesn’t have to choose to sacrifice their wellbeing to. So screw society, choose culture. This has important implications for investing, which we’ll come to later. In short, when an identity is attached to societal influences (consciously or otherwise) you can’t simply remove the attachment. You have to replace it. You can replace it not by forcing someone to own good investments, but by cultivating a new attachment to a culture of being a good investor. ### Intrinsic v extrinsic motivation Luxury does display differences. But in a world where we’re less dependent on geographical tribes to meet our needs for belonging and connection, there’s a more important difference on display. Luxury’s desire to display is a derivative of extrinsic motivation. Studies on extrinsic v intrinsic motivation show that the extrinsically motivated are far more likely to buy showy crap that doesn’t work. Professor Tim Kasser, who studies the role of materialism and consumerism on financial wellbeing and environmental sustainability, has shown that people who have high extrinsic motivation are more likely to seek fame and acceptance of others. What they do for, and with, money is heavily influenced by what other people think of them. Or rather, what they perceive other people’s perceptions will be (reality has very little say in status-driven decisions). As financial planner Jason Butler wrote, summarising Professor Kasser’s work: > Professor Kasser advises that people who have high extrinsic motivation tend to feel emotional insecurity and be less mentally resilient. For many people this is due to their emotional needs not having been met in their childhood, while for others it could be due to hormonal imbalances or having suffered a major emotional trauma. \[…] Whatever the cause, high extrinsic motivation usually manifests itself in the form of spending money on things that don’t maintain or improve one’s financial wellbeing – expensive cars, big houses, exotic holidays, unnecessary possessions, fashionable clothes, beauty products or jewellery – and that often have a negative impact on the environment.\[iii] Luxury, in short, is a sign of insecurity. Which doesn’t feel like such a cool thing to advertise. Especially when doing so robs one of resources that could be used for more fulfilling ends. Intrinsically motivated people, on the other hand, the article continues: > tend to be more emotionally secure and have a greater sense of connection with other people and their community. Their spending tends to be focused on living a life based on what makes them truly happy and is aligned with what is important to them, rather than seeking the approval or acceptance of others. A desire for luxury, whatever its root cause, isn’t hard-wired. No one is cursed to waste their life atop a meaningless and unnecessarily expensive conveyor belt of doing work they hate for shit that doesn’t make anything any better, however much they were conned into believing it would. ‘It’s just who I am’\[6] is never a valid excuse for anything, least of all not becoming who you could be. Stepping off the conveyor belt may require no more than coming to see luxury as a signal not of ‘success’, but of sadness. It’s both more true, and more conducive to not being an idiot. As Cynthia Cryder et al have shown: ‘Sadness increases the amount of money that decision makers give up to acquire a commodity.’ \[iv] They dub this the ‘misery-is-not-miserly effect’ and show that it occurs only when self-focus is high. They draw on William James’s observation that material goods play such a strong role in people’s stories of themselves\[7] that losing material possessions results in ‘a sense of shrinkage of our personality, a partial conversion of ourselves to nothingness’, and note the following chain of events: ‘sad event + self-focus = devaluation of self = desire to enhance self = pay more for possessions.’\[8] ## **Can’t get no satisfaction** ***At the root of chasing more is a belief that life is lived in the future, not the present*** Suggesting that luxury signals a lack of worth rather than an abundance of it is not a reliable way to make friends, nor influence people to do anything other than look at you like you’re a funless Puritan. ‘Lighten up!’ they say. ‘Live a little!’ they chirp. ‘Live in the here and now!’ they urge. They are mistaken. For ‘living in the here and now’ is not hedonism, and luxuries are a sign, not that one is living in the moment, but that one has shot right past the moment, while chasing a dream of a life that’s a mere material mirage. ‘The more a man lays stress on false possessions, and the less sensitivity he has for what is essential,’ wrote Jung, ‘the less satisfying is his life. He feels limited because he has limited aims, and the result is envy and jealousy.’\[v] If the key to a Good Life is an examination of who one is, and the use of one’s resources to live in accordance with that knowledge, then the desperate drive for more, and the substitution of examination with excess, is the opposite of what we want, for it replaces the process of examination and refinement with a cycle of ignorance and waste. It is the blindness, not the quantum, of ‘more’ that’s the problem. Resisting the shiny sirens of superfluity isn’t always easy. Not least because it can be hard to disentangle a luxury motive from a beautiful one. A beautiful life is adorned with beautiful things. But it is the beauty, not the luxury that we want. The fit of a jacket is more important than the label on it. And the health of the person underneath it is more so. The luxury label is a salve for a psychological shortcoming, an unhelpful wound created by a story that needn’t be true. Plastering over it doesn’t make it heal. There is a difference between art – a beautiful thing that expresses an otherwise inexpressible part of who you are – and a vehicle for showing off a price tag. The joy we can feel from luxury derives from its symbolism. We can sub in a different symbol. If we want to waste money, transforming someone else’s life with it has reliably greater long-term effects for the giver, let alone the receiver. And if it doesn’t work for you, it’s not difficult to go back to Bond Street, secure in the knowledge that your decision-making now stands on firmer ground. \* To live in the here and now is to recognise that you can be happy now or not at all. It’s a bias not towards blind consumption, but towards a continual reviewing of the story you are telling about who you are and if what you’re doing supports that story. Part of your story – and therefore part of your allocation of resources – is about your future. We want conscious choice, but choose instead to swing from jumping to conclusions to indefinite delay, all the while substituting external and ephemeral for more intrinsically valuable qualities. Immediate action taken with the knowledge of its imperfection is better than waiting for an unachievable certainty. We can expand our earlier call for ‘alignment coaches’ to wider ‘conscious choice coaches’: advisers that remind us what it’s all about and support us along the tightrope of ‘enough’ when we’re drawn to blindly lose balance chasing ‘more’. If you’ve ever taught or been taught anything, you’ll know the temptation to jump in and ‘help’ when someone is struggling, your uneasiness with standing by growing with their frustration with not grasping something. A nudge towards the answer eases the tension but kills the learning. A nudge towards thinking it through until temples are strained to bursting does the opposite… but it works, and coach and coachee feel incomparably better afterwards. Such strains cannot be kept up for long, of course. Such effort should be directed towards creating skills that make everything easier next time. That, in the realm of living a Good Life, prioritise comfort with complexity, not a myopic searching for simplistic. But just as most advisers don’t encourage examination, they also don’t encourage enough; most operate in the employ of more, as we’ll see next. {% content-ref url="/pages/-MQ7j0b2gnQzqioyyabJ" %} [2.2.2.4 Right place, wrong mime](/the-book/2/2.2/2.2.2/2.2.2.4-right-place-wrong-mime) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] The point of a luxury good is that its price is part of its value. Expert craftsmanship, if it exists, is an irrelevance. The luxury element is about advertising how much something cost – how much was sacrificed in its acquisition (Recall the conspicuous consumption con from [Section 2.2.1.1](/the-book/2/2.2/2.2.1/2.2.1.1#the-conspicuous-consumption-con)). Something that was crafted perfectly but which no one knew the price of would not count as a luxury. \[2] See Section [2.3.3: Denunciation is still attachment](/the-book/2/2.3/2.3.3). \[3] See [Trigger #13: Treat](https://book.moneyblind.net/the-book/1/1.5/1.5.4#13-treat). \[4] I’ve known people to complain-brag about spending €25 on an espresso in Monaco, as if that made them sound anything other than stupid. \[5] We’ll return to the cultivation of character in Part 2, Section 4.2.3. \[6] See Trigger #26: It’s just who I am. \[7] Recall your ‘centre of narrative gravity’ from [Part 1, Section 1.2](/the-book/1/1.1/1.1.2#who-or-what-is-your-self). \[8] Seen in this light, the frankly upsetting modern phenomenon of deliberate product sabotage, despite it wasting global resources, punishing the poor, and filling the world full of ugly shit, endures so well because it feeds off the sadness and fear of the rich. \--- \[i] Alan Watts, *The Wisdom of Insecurity* \[ii] The School of Life, *The Book of Life* \[iii] Jason Butler, ‘Match Your Spending With Your Values’ for *The Evidence-Based Investor blog*, 29th September, 2019 \[iv] Cryder, Cynthia & Lerner, Jennifer & Gross, James & Dahl, Ronald. (2008). Misery Is Not Miserly Sad and Self-Focused Individuals Spend More. *Psychological science* \[v] Carl Jung, *Memories, Dreams, Reflections* # 2.2.2.4 Right place, wrong mime Despite being in the best place to see the trouble of doing so, Advisers encourage living (and buying) the dream, not realising a life ### The road to hedonistic hell is paved with good intentions A prospective client came in one day; let’s call him Richard. Richard, being sensible, was shopping around before entrusting the several million he’d pocketed from selling his company to relative strangers.\[1] In the spirit of pitting the competition against each other, Richard told of how in his last such meeting, the adviser had already offered to put him in touch with his ‘car guy’, who could get him a special rich-person deal on a fancy new marque. What did we think? What was a better car? Bentley, Ferrari? Aston Martin? ‘I thought you were more of a motorbike guy.’ Richard *was* a motorbike guy. Part of the reason he didn’t know which car he wanted was because he didn’t want any of them. But a fire started by society and doused in petrol by the previous adviser had burnt down Richard’s reasoning. He was rich now. And rich people owned flashy cars. Right? In the kingdom of the money blind, ‘which flashy car?’ replaces ‘what use of this money is most likely to make your life better?’ and the world goes up in smoke. \* Advisers are in the perfect position to stop people wasting resources on stuff that won’t improve their lives, but which societal sirens say is a good idea. As noted before, advisers are not only in the position to take an outside view\[2] but also get to see, from inside the heads of those that have tried, all the tempting but dumb ways allocating resources doesn’t work; they are the conduit by which people can learn from others’ mistakes. As an added bonus, they also have a better understanding than anyone else of when running out of money is actually likely, rather than a phantom that keeps people from fulfilling more of their potential. However, we’ve also seen that because most advisers act like co-authors of life stories rather than editors – for example projecting their car guys onto motorbike-lovers, or, in the name of short-term client comfort, justifying dumb decisions rather than challenging them – clients’ psychological screams fall on deaf ears and mistakes aren’t learnt from, but multiplied. Being in the most privileged position isn’t much good if you do only an imitation of the job the privilege affords. Advisers may be in the best position to help, but through both nature and nurture, they are often the worst people to actually do so; more enablers than trainers. ### Nature ‘All too often the mere hope of money has ruined many men.’\[i] So said Creon, in Sophocles’ *Antigone*. Financial advisers are often both the most obsessed with money, and the most prone to self-deceptive beliefs about it. They are more likely than their clients to be lured into error by misguided dreams of ‘more’, rendering them incapable of helping, despite being paid to do so. They’re experts at showing clients what they’re looking for, not helping them to see what they want. We’ll look at the history of financial advice in more detail in Part Four. For now, just know that most advisers become advisers to make money, not to help people use it more wisely.\[3] The industry has moved on a lot from its Wild West origins, but switching from spurs and a Stetson to a suit does not automatically stop someone being a cowboy. Anyone giving advice in any arena is more often doing so to justify their own life choices than to help whomever they’re advising improve theirs. The only difference with financial advice is the consequences – by virtue of that advice being about how to allocate one’s resources in the name of living a Good Life – can be that bit more catastrophic.\[4] Financial advisers are often the most prone to self-deceptive beliefs about money. They pride themselves on giving people permission to spend their money (within reason, as we’ll come to in a second). This can be good. Worrying you don’t have enough is just as pernicious as spending it simply because you can. But both are characterised by the sort of blindness we know detracts from a Good Life, not adds to it; both are behaviours of minds stuck in having mode. Financial advisers may be best placed to see that value lies in a focus on narrative not numbers, but numbers are their comfort zone. Their job – or so they have come to believe – is about knowing numbers in a propositional and procedural way better than anyone else. Yet it is the perspectival and participatory knowing that people most need help with. Financial advisers do want to help. But as is all-too-often the way with self-appointed helpers, they’re quicker to jump to tactics than to they are to stop and think through the consequences of their prescriptions. As per the earlier section on what other investment books miss,\[5] this is true even with those that focus on ‘financial wellbeing’. Having a heart in the right place matters, but incentives matter more. And financial-adviser incentives are not where you want them to be. ### Nurture Let us return to Creon… > You'll have learned, at last, it doesn't pay\ > to itch for rewards from every hand that beckons.\ > Filthy profits wreck most men, you'll see –\ > they'll never save your life.\[ii] Adviser incentives matter in two ways: to sustain themselves, and to sustain the system. We’ll return to the system in Part Four. Sustaining themselves relies upon backing up the belief that more is better. The vast majority of financial advisers literally earn their living on the back of this belief, given that the fee they receive for their services is based upon how much of their client’s money they manage. Their raison d’être is to make their client more money. Most salivate over high salaries, and high lives. Talk of meaning is more often a sales pitch than a serious undertaking; especially when the adviser’s fee would collapse if the most meaningful thing for a client to do were to cash in some chips. When advisers talk of realising dreams, they do not mean in the sense of ‘making real’ in the way a potential-fulfilling flourishing human would understand. They do not mean cultivating a real relationship between a person and their money that transcends and brings relevance to both. They mean replacing all thought of reality with a chase after an ultimately unrealisable dream. While advisers don’t necessarily encourage buying stuff (if anything, because of the prevalence of percentage-based fees, they’re incentivised to do the opposite, in the short-term), they do encourage continuing to play a stuff-centric game, where stuff is the symbol of ‘success’. They encourage buying the amorphous dream sold by the lie that more is always better. They claim – sometimes even consciously – that the perfect financial plan, the mark of a life as well lived as possible, consists in spending your last penny just before you die, as if consumption, regardless of consciousness, equals quality. {% content-ref url="/pages/-MQ7j5OCyhhCwLx-1LS5" %} [2.2.2.5 Enough is more than enough](/the-book/2/2.2/2.2.2/2.2.2.5-enough-is-more-than-enough) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] It’s a sign of how scared people are around money that so few do this, instead making their decision based on an hour or two with someone who has been trained specifically to sell you their services, not help you get comfortable with the complexity of your life… a complexity that those few hours won’t get close to grasping. \[2] Recall construal level theory from [Part 1, Section 3.2](/the-book/1/1.3/1.3.2). \[3] This is mostly unconscious. Few would admit it. But as we’ll see in Part Four, common advisory actions, from the structure of their businesses to the content of their client meetings, provide irrefutable evidence. \[4] Depending on your benchmark, the consequences of even crap advice can be ‘good’. Even the cowboys will make people more money compared to sitting in cash. But that’s not really the point. It sells both the owner of the assets and the world in general far too short. \[5] [Part 1, Section 2.3](/the-book/1/1.2/1.2.3). \--- \[i] Sophocles, *Antigone* \[ii] Sophocles, *Antigone* # 2.2.2.5 Enough is more than enough The quality of your life is not measured by quantities ## **Quality of life and access to comfort are not the same thing** ***Want more from what you’ve got, not to get more*** ### **Remember where you’re going** Your goal is always an absolute ‘enough’. When you’re in a state of deprivation, this requires ‘more’. But whereas focusing on ‘enough’ gets you where you want to go (aligns your resources with your becoming-mode vision of yourself, not your having-mode one, in a continual participatory process of fulfilling your potential and living a Good Life), focusing on ‘more’ wires your brain to blast right past where you want to go, and leads not to alignment, but to waste. The aim of this section has been to embed the following ideas: * Everything is a trade – Train yourself to see opportunity costs as instinctively as monetary ones. More of one thing is always less of another; ‘less is more’ means ‘more is less’, so rather than blindly using such glibness in the name of post-hoc justification or sour grapes, use it as a trigger to stop and remember who it is you want to become, and how your in-the-moment decisions align with that. * There is only one goal – Enough isn’t a denial, or a sacrifice, or a satisfice. It’s what you want. The only goal is to live a Good Life. After you’ve broken something down for analysis, remember to build it back up again, because it needs to serve your life as a whole. It’s too easy to ‘optimise’ for an element of life, and charge off in increasingly comfortable accumulation of that element, to the detriment of the balance that gives a whole life its worth. * You live in the present, not the future – Don’t confuse means with meaning. Avoid the trap spelled out by Camus in *The Myth of Sisyphus*: ‘A man wants to earn money in order to be happy and his whole effort and the best of a life are devoted to the earning of that money. Happiness is forgotten; the means are taken for the end.’\[i] * More and enough applies to making money as well as spending it – There’s nothing wrong with either making oodles of cash, or spending it… if you’re doing so in a way that consciously makes your life better. Most people don’t. Most plump for ‘more’ and hope the ‘better’ bit will sort itself out somehow. Not only does it not, but – remembering that the Goodness of a life relies on the Goodness of multiple components – the blind chase of ‘more’ usually actively worsens if not irrevocably ruins many of those components. * You spend absolute, not relative amounts – It’s easy to believe an expenditure is unimportant and therefore not worthy of conscious decision-making when its monetary cost is 1% of a salary, or a net worth. Yet to act like this is to trust the bettering of your life to luck, not conscious choice. You spend absolute amounts, not relative ones. This comes with an inescapable responsibility to both yourself and others. * You cannot count – You are insensitive to scope. Your brain cannot accurately compare a million to a billion. Finance unfortunately throws up all sorts of incomprehensibly large numbers whose significance to your life don’t get the attention they deserve, not least because most of them come at the end of a long chain of compounding. Recognise this and remind yourself to stop relying on caring, and trust the stats when it’s appropriate to do so. * All that glitters ain’t gold – Luxury is a sign of sadness and terrible choices. ‘Treat’ is a sign of addiction to something that steals your money and poisons your body. We sell our souls to the shackles of society, but can free them with culture. In short, remember that quantity does not equal quality. Cost of living does not equal standard of living. Quality of life is not measured by access to comfort (material or mental). If we made more conscious choices, we would break the spell ‘more’ casts over us. We would likely spend almost unlimited amounts on a certain tiny subset of things, and almost nothing on everything else. On one level, this is so well known already as to have become a cliché. Similarly, merely stating that enough is more important than more is pointless. We’ve been doing this for at least 2,000 years and it’s gotten us nowhere. The world is awash with people who would proclaim such things on Twitter before unconsciously describing a bigger house as a ‘better’ house one second later. ### Worldview change outranks behaviour change Understanding the deeper implications for managing one’s financial life needs a change in worldview, not a change in medium onto which the same messages are blindly broadcast. The story of more and enough isn't one about greed and knowing when to stop; It's about opportunity cost. No one thinks they're extravagant. Even those that admit they do occasionally extravagant things continue to believe they are not wired for excess.\[1] Seeing more and enough more usefully requires seeing not abundance and deprivation, but seeing every decision as a trade. The former model can lead to the ‘right’ actions, even when taken, being done so with a feeling of denial – as if more were still objectively ‘better’, but one ‘ought’ to be subjectively ‘sensible’ now and then. Seeing every decision as a trade sees that less of one thing is *always* more of another. It sees the worldview behind the behaviours rather than the behaviours themselves. It consequently sees sustainable improvements as a job for philosophy, not psychology. Even the best-intentioned behaviour changes are doomed to fail if the underlying view of the world – which is being continually reinforced faster than any behavioural prescriptions can keep up with – remains distorted and self-deceived. It’s impossible to work out what ‘enough’ is (and therefore impossible to aim for it) while we remain blind to our common sources of self-deception around money, and while we continue to know it only in an incidental propositional and procedural (as opposed to perspectival and participatory) way. Tempting as it is to believe money is somehow different, that it stands outside of us as a resource we can store up and call upon when needed, this isn’t how life works; it’s integrally intertwined with how we live in the world. Money is convertible only in a domain-specific context, and while this is useful when we break life down for analysis, it’s less useful when we put it back together again for living. See more clearly how to make more with your resources before making more resources ‘Just in case’ is a poor justification for a blind chasing of ‘more’. Accumulating useless crap may appear clearly unacceptable, but money feels different: it rarely feels useless until we’re dead, and even then we can pass it along to mess with someone else’s mind instead. Money shouldn’t be useless. It has phenomenal potential. But when we make it purely to waste it – spend it in such a way to justify whatever we did to make it, rather than in a conscious attempt to improve our life – it is worse than useless. For it leads us to places we just don’t want to go, and away from those we do – often away from even working out where those places we do want to go actually are. Money is a moulder of mindsets. ‘It is not the man who has too little who is poor,’ wrote Seneca, ‘but the one who hankers after more.’\[ii] Hankering is independent of one’s financial situation. Some of the most headstrong hankerers after more are the ones who already possess the most. Because, echoing Epicurus, ‘He who is not satisfied with a little, is satisfied with nothing.’\[iii] The way to break free is to come to understand on a more fundamental level that money’s role in your life is about your narrative, not about numbers, about who you are becoming, not what you have, and that money decisions, to be ultimately beneficial, must be consciously made. Believing in the myth of more is the opposite to this – we hanker after more to *not* have to think. We believe ‘more’ is about security, yet it advertises our insecurity. We believe it is about creating opportunities, yet it’s used as an excuse for wasting them. A mind wired to see inherent virtue in accumulation forgets to ever apply it. Yet, ‘A wise man,’ wrote Montaigne, ‘sees as much as he ought, not as much as he can.’\[iv] And as Stephen Batchelor wrote in *Alone With Others*, though we may pass accumulation of as exploration, it’s really the opposite – not discovering what we want, but hiding from it: What is it that we hope to achieve through all this incessant accumulation? Why are we compulsively motivated to have things? In the first place we instinctively sense that a certain element is lacking in our lives. A vague hunger echoes from deep within us. Perhaps through acquiring material objects, friends, and knowledge this void could be filled. So we set out into the world and start to consume whatever commodities it has to offer. \* Many a mind has started out with sensible actions – say, saving – but has mistaken the action for the sanity. Saving is not inherently good. Making conscious choices aligned with who you want to become, of which saving may be a wise part, is. The point is the process of examination, not the resultant resource allocation. Focusing on outputs seems simpler, because it is simplistic. Blinding yourself to opportunity costs creates a vacuum into which the nearest salesperson will happily rush. We want an artistic life, not an expensive one. One that expresses the otherwise inexpressible complexity of us. That is filled with moments like walking on air after a meeting with a close friend, or a way in which we’ve controlled our environment that inspires behaviours that make us smile each morning upon leaving the house. This can include material things – items that each time we contemplate them remind us of the amazing trade we made that sustainably levelled-up our life. All these things are personal; looking for them in objective delegation doesn’t work. Help, where sought, should be in the form of a ‘conscious choice coach’ that reminds you of your responsibilities, not takes them away from you. Finally, it is worth reiterating that none of this is saying ‘don’t make more money’ or ‘don’t buy stuff’. It’s just saying don’t do it blindly. Don’t do it because you’re trapped in a cycle of wasting resources. Check in now and then, remember that the aim is a Good Life. Is what you’re doing adding to that? As Bertrand Russell wrote: > It is very singular how little men seem to realise that they are not caught in the grip of a mechanism from which there is no escape, but that the treadmill is one upon which they remain merely because they have not noticed that it fails to take them up to a higher level.\[v] This is echoed by Tim Ferriss: > It is quite possible – actually the rule rather than the exception – to have financial and time freedom but still be caught in the throes of the rat race. One cannot be free from the stresses of a speed- and size-obsessed culture until you are free from the materialistic addictions, time-famine mind-set, and comparative impulses that created it in the first place.\[vi] Want more from what you’ve got, not to get more. ## **When less really can be more than more** ***How to hack the income-happiness plateau, and keep turning more money into a better life*** Before leaving this section, there is one area where more really can be better. One way to hack the income-happiness plateau (that says rises in income reliably translate into rises in happiness only when starting from very low incomes). One way to always know what to do with money to increase the Goodness of life. One way that appeases the drive that underlies the lure of luxury, but in a way that actually works. ### The £10m house thought experiment Why does anyone live in a £10 million house? Imagine that you did. And that doing so makes you a certain amount of ‘happy’. Now imagine that for some reason you’re forced to live in a £5 million house (but you get to keep the change). Let’s assume doing this makes you less happy (or you wouldn’t need to be forced to move – you’d’ve done it anyway). Now imagine what you could do with the spare £5 million. Given until a minute ago you used to live in a £10 million house, chances are good that you’ve never not done something you really wanted to do because of a lack of money, so it’s probably fair to say there is no ‘thing’ you can think of buying that would level-up your life to a new and sustainable level of Goodness. You have come to understand – perhaps after much trial and error – that hedonic adaptation is very real and while it hasn’t always stopped you double-checking now and then, you know that ‘having’ more stuff does not equate to feeling more alive for more than a few minutes. You don’t need to have heard it every week in a financial-planning career to imagine there are lots of people with lots of money who ‘struggle to know what to spend it on’. Expand your vision for a second. There are plenty of people who haven’t reached such stuff-based saturation. Plenty whose lives would be undoubtedly transformed by more things. Whose lives, consequently, would be undoubtedly transformed if you redistributed some of your luck their way. I argue that for each life you helped transform, you would feel pretty damn fantastic (quite possibly regardless of how good the transformee actually felt). I further argue that were you to do this a lot, the total of these fantastic feelings, even assuming a very swift onset of diminishing marginal returns (i.e. each transformation leaves you feeling less fantastic than the last) would sum to vastly more personal happiness than you ‘lost’ when moving from a £10 million house to a £5 million one. So why does anyone live in a £10 million house?\[2] ### Charity and the Good Life > Brother, the virtue of charity brings quiet\ > To our will, so that we want only\ > What we have, and thirst for nothing beyond that.\[vii] Happy people give more money away. And giving money away makes people happier.\[3] ‘That man is richest,’ wrote John Ruskin, ‘who, having perfected the function of his own life to the utmost, has also the widest helpful influence, both personal, and by means of his possessions, over the lives of others.’\[viii] Consider the opposite: retail therapy. No one goes for ‘retail therapy’ when they’re in a good mood. Good moods make us want to treat other people; bad moods make us want to ‘treat’ ourselves.\[4] The way to be comfortable in one’s own skin is not by wrapping one’s skin in fancy fabrics. On the surface, both donating and luxury are both characterised by ‘waste’. But one leads to feelings of worth, while the other is but a masquerade of meaning. They are interchangeable as means of expressing ourselves with our ‘excess’ monetary resources. If you believe excess money is a measure of your value, you go with luxury. If you believe helping fellow humans is worth more (to you, let alone to them or to the world) you go with transforming someone else’s life ahead of transforming the look of your living room. We always want to express ourselves, but we don’t always have meaningful material exchanges to make. When we see numbers before narrative, and having before becoming, this gap can lead to trouble. A common ‘complaint’ from the clients I used to advise was that they didn’t know what to do with their money. They didn’t know what to spend it on, but – egged along by a world equating consumption with happiness – felt an urge to be spending it on something nevertheless. ‘What do other people in our position do?’ they would ask. That question, of course, is as moronic as the lack of thinking that led them to ask it. If I’m not sure what to do with a given day, do I look around for inspiration from people based purely on them having access to a similar amount of money? Do these clients have no values? Never. Do they occasionally forget what those values are, and that they and not the cost of something should be the starting point of money decisions? Always. Money primes our thoughts to become incredibly insular. Yet we prioritise connection over cash. Suggest that someone widen their vision just a touch, to take in maybe half a dozen other people, and suddenly they’re awash with ideas of what to spend it on. ### Always done is always dumb > 'Why do people come to Malta for eggs when they're so expensive there?'\ > 'Because they've always done it that way.'\ > 'Why don't they look for eggs in Sicily?'\ > 'Because they've never done it that way.'\[ix] If giving money away were really so wonderful, why isn’t it a core part of everybody’s spending plans? That something ‘works’ (makes our life better) may be a necessary part of a wise decision, but it is insufficient if we cannot see it working, and so either never try, or try in a way that’s doomed to fail. Despite its selfish benefits, spending on others is stymied by our self-deception, and because we’ve always done it a different, less-effective, way. If we see money as a means of shaping our narrative, its potential as a source of generosity would not be in doubt. However, seen through a numbers lens, it is. Similarly, we may want to become a more generous person, or one who is happy enough to demonstrate this by redistributing an excess, but if we view the world in having mode, we will be at best sceptical that this could work. Traditionally, charity is reactive, not proactive. People donate to causes that come to them, not the other way around. This is the path of unthinking, not thinking. Each of these act against internalising the idea that giving money away could be a reliable means of upgrading our quality of life. We saw the answer to this quandary in our earlier discussion of symbols:\[5] The skills you are trying to acquire to transform yourself are those possessed not by the person you are, but by the person you are becoming. How does the person you are now know what it will be like to become what you could be? How do you know that becoming that person is even a wise move? We need a way of test-driving an expanded sense of self. Fortunately, this is (relatively) easy. Start the habit of giving (however small, but it must be a habit, not a one-off, otherwise you are not acting like a different person, but merely doing a different thing) and see what happens. Almost no one regrets it, but you may. If you do, and you started sufficiently small, it’s a cheap means of self-discovery. I say *relatively* easy because this needs to be done right. Done wrong, you’ll learn nothing. Recall Nate Soares’s ‘care-o-meter’ and how it doesn’t work on large numbers, but that shouldn’t stop you from doing what you know to be the right thing anyway: ‘The fact that you can't feel the caring doesn't mean that you can't do the caring.’ If you’re going to do the caring, it’s worth learning how to care well. The three most common ways giving goes awry are: 1\. thinking it is only for the rich; 2\. doing it in a personally ineffective way; and 3\. giving with the wrong intention. *Thinking it is only for the rich*. First, recall from the beginning of this book that you are, in all probability, already rich. And not in a facetious way. In a ‘you’re almost certainly in the top 10% of global rich’ way. And if you can’t live a Good Life with those resources, living with 1% less, say, isn’t going to make a difference anyway, so it’s still worth a shot. Second, anyone can give. It needn’t be money. Maybe it’s time, or energy, or a non-exhaustible resource like connections. Maybe part of the reward of your job is already from the service you provide to others. In terms of wiring your brain in a way that evidences being a generous person – which is what determines the feeling of living well – the absolute amount is less relevant than what it represents to you. Giving 10% of one’s income may be unwise to someone already struggling to make ends meet, while giving 50% may still not scratch the surface for a banker. Personal effectiveness. I have a friend who had heard of the life-enhancing magic of giving a crap about other people, and so decided to test it out by spending his Saturdays volunteering in a charity shop. He resented it, and decided that maybe charity wasn’t for him. Yet however much we may treat it as such, not all charity is created equal. This is true in two ways. First, as expertly detailed in Will MacAskill’s *Doing Good Better*, because the best charities can do 1,000x more good with your money than the worst (and indeed some charities actually do more harm than good). And second, because of the importance of fulfilling your potential that’s central to the transformation of your resources into a Good Life. My friend failed on both these accounts – he had no evidence of the effectiveness of the charity he was working for, let alone of his own contribution to its effectiveness by working in the shop, and neither was it an obviously good use of his skills. As MacAskill wrote: ‘The good I do is not a matter of the direct benefit I cause. Rather it is the difference I make.’ I.e. what would have happened without me? This could be innocuous – someone else would’ve worked that Saturday shift just as well; or it could be dangerous – for example, a well-meaning amateur shoving a trained professional out of the way to perform CPR. When we think that charity must ‘hurt’ in some way, we are dooming ourselves to failure just as much as the dieter who is making food choices based on denial. Charity is an opportunity to be embraced, not a chore to be endured. Knowing you’re making a difference can come from direct evidence, though this hugely limits your options. A better source is usually researched effectiveness. You do not have to directly see the difference you are making if you trust that people better placed (through relevant skills, motivation, opportunity, etc.) have done the research for you.\[6] For many, trusting that your donations are directed towards somewhere where they’re doing just about the most good possible is more than enough for some first-class warm and fuzzy feelings. *Giving with the wrong intention*. There are several ways your intentions influence your outcomes. Primary among these is giving from a place still heavily hoodwinked by self-deception, such that sharing an abundance of riches still feels like at best a chore fulfilled rather than a burden relieved. There is a gulf between giving because of a desire to make a difference, and to be seen to be making a difference. There’s another gulf between expecting to receive a ‘reward’ to compensate for the voluntary deprivation, and receiving the reward as a side-effect of selfishly acting in alignment with one’s values. As Daniel Kahneman explained: ‘There is clear evidence that generosity brings its own reward, making people more satisfied with being themselves.’\[x] Our self-deception is a master of self-defence. In this context, it makes use of ‘anticipated reproach’. Anticipated reproach explains why we mock vegans, even though whatever one thinks of their life choices, no one can deny that they’re mostly just trying to make the world better for everyone. We see overtly moral behaviour not as a positive for the world, but as a personal attack on our own immorality. We judge others for how we perceive they are judging us (regardless of any actual judging). By mocking *their* characters, we soften the blows we feel they (but really we) are dishing out to our own.\[7] The potential benefits are worth taking a shot at these defences. Without question, those clients I could see to be living most happily were the same that regularly donated amounts that would make most people uncomfortable. And those that were most annoyed I’d even raised the possibility of redistribution as a potential use for their money were always the most on edge about life in general. They’d mutter something about deserving to keep it because they’d worked hard for it, as if at a buffet one should keep eating beyond the point of healthy satisfaction just because one can. Charity can characterise a life well lived as well as contributing to it. Matthieu Ricard describes ‘A happiness so deep that, as Georges Bernanos wrote, “nothing can change it, like the vast reserve of calm water beneath a storm.” ‘\[xi] He continues: > The Sanskrit word for this state of being is *sukha*. *Sukha* is the state of lasting well-being that manifests itself when we have freed ourselves of mental blindness and afflictive emotions. It is also the wisdom that allows us to see the world as it is, without veils or distortions. It is, finally, the joy of moving toward inner freedom and the loving-kindness that radiates toward others. From waste to want ***Practical steps to identify and embrace enough and avoid being misled by more*** This, like all step-by-step instructions sections, is being saved for the published version of this book. {% content-ref url="/pages/-MBSuxzg\_lABA1qhmUja" %} [2.2.3: Value is more important than price](/the-book/2/2.2/2.2.3) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] It’s worth repeating two footnotes from the previous section: ‘Every client I’ve ever met has always described each and every year as ‘exceptional’ when asked to analyse what they’ve spent their money on during it’; and ‘no one believes their spending is extravagant. I’ve known people burn through half a million a year or more and believe that while their lifestyle may be unusual, it’s not unhinged.’ \[2] Recall our ‘scope insensitivity’ from earlier. It works both ways. As the afore-quoted article states: ‘Saving a person's life feels great, and it would probably feel just about as good to save one life as it would feel to save the world. It surely wouldn't be many billion times more of a high to save the world, because your hardware can't express a feeling a billion times bigger than the feeling of saving a person's life.’ Transforming many lives at once won’t feel as great as doing it individually, even factoring in the extra time and energy costs of the latter option. Good things should always be broken down, while bad ones should be batched together. But you can train yourself to a certain extent to feel an additional warm and fuzzy buzz from knowing you are saving many lives, say, when you contemplate them as individuals and scale up. And in any case, even lumped together, it’d be a weird person who thought it’d still sum to less Good – for *them* – than whatever was ‘lost’ from the house swap. \[3] It does work in both directions, though the former – happy people give more – is stronger. \[4] Often with things that after a short-term kick, increase our *un*happiness, especially if that unhappiness was anything to do with how much money we had… for after ‘therapy’ we now have less of it. See Trigger #13: Treat. \[5] [Part 1, Section 2.4](/the-book/1/1.2/1.2.4). \[6] See the Effective Altruism movement for countless examples. \[7] You also won’t get much support for giving as a means of turning your resources into a Good Life from a typical adviser, for two simple reasons. First, if they get paid based on your assets, their fee will go down. If I’ve come to you for advice on how to use my money to most effectively enhance the quality of my life, there’s a chance the answer is ‘give some away’. Perhaps give a lot away. Perhaps give so much away that your fee reduces by an amount equal to the revenue from a dozen of your smaller clients. I’m sacking half a dozen of your clients! If this is an option on the table for what to do, am I going to trust you to treat it with appropriate lack of bias? Or even tell me in the first place? How solid are your saintly credentials under the stress of an attack on your salary? Second, as we saw earlier, they’re as self-deceived around money as anyone. \--- \[i] Albert Camus, *The Myth of Sisyphus* \[ii] Seneca, *Letters from a Stoic* \[iii] Epicurus, *The Essential Epicurus* \[iv] Michel de Montaigne, *Essays* \[v] Bertrand Russell, *The Conquest of Happiness* \[vi] Tim Ferriss, *The Four Hour Work Week* \[vii] Dante Aligheri, *The Divine Comedy* \[viii] John Ruskin, *Unto This Last* \[ix] Conversation between Yossarian and Milo in Joseph Heller, *Catch-22* \[x] Daniel Kahneman, Interview in the *Wall Street Journal* \[xi] Matthieu Ricard, *Happiness* # 2.2.3: Value is more important than price Using the objectivity of price as a guide to subjective value is all-too-common, but all-too-foolish This chapter is about how our self-deceptions distort our calculations of what’s important and consequently the wise amount of resources to trade for them. Contorted calculations are showcased in the misdirection provided by price signals. We’ve so far looked at seeing spending as a shaper of our stories and embracing the expression of enough rather than being misled by the myopia of more. Now it’s time to get practical. Money reflects a mindset, but it’s spent on the streets. On the streets, everything has a price, but street value isn’t subjective value. Understanding the distinction between price to the world and value to you, such that it acts like a pair of vision-correcting contact lenses, is perhaps the most crucial ingredient for a successful allocation of your resources. # 2.2.3.1: Is it better to look rich, or be rich? Our attachment to price tags is an attachment to appearances as a substitute of, and at the expense of, the actual wealth we want ## **Mispriced** ***Price is a market signal, not a meaning signal; it is useful for demonstrating what society values, but not telling you what you value*** Price is a signal. Sometimes of quality. But rarely of worth. Substituting the measure of what someone wants to sell us for what we want to buy is the natural conclusion of the ways we’re wired to waste our resources looked at so far in this chapter. A focus on price isn’t without advantages. It’s a shortcut. It’s common in decision-making in complex or confusing circumstances to look for – if not outright grab at – shortcuts. Sometimes this is smart. But when the complexity comes from dealing with humans, it’s smarter to look for better ways to work with it, than to pretend you can ignore it. Blind simplification takes shortcuts for the sake of it. It doesn’t worry too much if it ends up somewhere other than originally intended, as long as it gets there quickly. Sophisticated simplification cares where it’s going. It favours signposts over shortcuts. Price’s correlation with quality is not what it once was,\[1] but the two aren’t total strangers. If you can buy a whole chicken for less than a standard high-street coffee, it’s a sure signal that it is not terribly good for you, or for the world. In a world of imperfect information, there will always be snake-oil salesmen, but at some point you’ve got to take stuff on trust. The crowd, especially in a free market, has some semblance of wisdom in certain areas. But remember our asymmetry of enjoyment and the insecurity-exploiting lure of luxury: price signals are more reliable indicators of crap than quality.\[2] A chicken that cost more than a car would not be worth it either. A price is an indication of how much a society values something.\[3] And we are social animals. The world may do things that appear bonkers to me, like value a Picasso more than transforming tens of millions of lives, but that’s the world we’ve collectively chosen to live in. Acceptance by society is a crucial component of a life, and part of acceptance *by* society is acceptance *of* society. There is therefore a not entirely daft case for basing our decisions not on what we value, but on what prices say society values. ‘In modern societies,’ wrote Sue Gerhardt, ‘survival depends on social acceptance and social status; it is very stressful when these things are at stake.’\[4] Using price to guide spending decisions can therefore ‘work’ in a limited way. But it is very limited. And these limited ways still only really work when they’re consciously chosen. The downsides of defaulting to price signals are far greater in scope, and not at all conscious. For every situation where shaving your head means life-or-death acceptance in a prison gang, there are a billion where you’re just buying some shit that’s making your life more expensive without making it any better.\[5] Yet we are, in the words of the School of Life, ‘so dependent on the regard of others, \[that we] forget the signals from deep within us that are hinting to us that we are not actually happy with the standard paths being proposed.’\[i] \* Worth is subjective. Life is lived in context. Ask any petrol-head what is the ‘best’ car, and they’ll likely spring to an answer. But they won’t have answered your question. Because they can’t. They can answer what’s the quickest, or the prettiest, or the most expensive, or has the combo of qualities that most pleases them, but without knowing what purpose the car would be serving, the question is unanswerable in a meaningful way. You don’t want a Ferrari if you’re driving through a farm. What something costs is not what something is worth. Cost is calculated by the world’s supply and demand; worth is determined by a context-dependent contribution to your life. Cost is a number; worth is a narrative. In terms of our different ways to know something, cost is propositional; worth is participatory. Things *have* costs; things *are* worth something. Costs change when the world changes; worth changes when you do. We always want what’s best for us. But working out what this is is often hard. So we sub in a search for the objectively ‘best’, even though this a) isn’t what we want, and b) doesn’t exist. So we go a step further down our simplistic path and look instead for something we can find: the most expensive. To choose based on price is to stop looking while also admitting that we’re not yet ready to start. We blindly use price as an answer to what we value, when what we value is independent of price, and in any sane spending decision, has to come first. A price may help us decide if something is subsequently worth buying, but it’s irrelevant to something’s initial intrinsic worth. Price is a market signal, not a meaning signal. ## **Consider the pineapple** ***The main determinants of price, such as rarity and the input of time, do not have intrinsic subjective value*** If you’ve ever been to St Paul’s Cathedral in London, you may have noticed the proud golden pineapples that sit sentry-like atop the western towers. Or perhaps you’ve noticed the ones that adorn the Wimbledon trophy. Examples abound of pineapples popping up in contexts unrelated to their fundamental fruity purpose. When St Paul’s was built the punk-haired pineapple was just about the rarest – and therefore priciest – item around, so its fruit-based function was forgotten in the name of price-based posturing. ‘A single fruit,’ the BBC reports,\[ii] could be ‘worth thousands of pounds,’ and ‘often the same pineapple would be paraded from event to event until it eventually went rotten.’ ‘Less well-off folk,’ we’re told, could rent them for ‘a special event, dinner party or even just to jauntily tuck under an arm on a show-off stroll.’ Some came with their own security guards. In 1807, a Mr Godding was sentenced to seven years in Australia, one year per pineapple he pinched. ‘For a long time,’ the School of Life relates,\[iii] ‘only royalty could actually afford to eat them.’ Poems were written and temples built in their honour. Today, pineapples don’t cost £5,000. A fiver can get you three and still have enough change for a couple of bananas. Stripped of its ability to showcase a wasting of resources – to provide one of the best examples of James Carse’s assertion that wealth is not possessed, but performed\[6] – the pineapple hasn’t changed. It’s still just a fruit. People nowadays even eat them before they rot. To take another example, consider cacti. I’ve a friend that works in a garden centre. They tell me that people regularly come in and ask – without any sense of embarrassment – what’s the most expensive indoor plant they’ve got. It’s usually a bloody big cactus. Cacti grow slowly. That’s why they cost a lot. Not because they’re ‘better’. Better in houseplant terms is a function of how well it fits with where you want it to go and how its care needs fit with your conscientiousness. Put so starkly as this, it may sound stupid to just pick a plant on the pot’s price tag. But imagine you’ve been given a voucher for a free plant. You can spend it on anything. Without playing silly games involving a second-hand houseplant market, do you go for the £40 one that fits best with your circumstances, or the £400 cactus? You may of course mix in circles where people will somehow think better of you after they know what your cactus cost, however out of place it looks, but who wants to mix in such circles, as opposed to ones that know your place is an awfully silly place for a cactus, and you’d’ve been much better off with a fern, or a palm, or an elaborate indoor shrubbery with two levels and a little path running down the middle…\[iv] David Foster Wallace tells of how ‘Up until sometime in the 1800s, lobster was literally low-class food.’ ‘Even in the harsh penal environment of early America,’ he continues, ‘some colonies had laws against feeding lobsters to inmates more than once a week because it was thought to be cruel and unusual, like making people eat rats.’\[v] We eat lobster, but when we pay for it, we’re being sold a story. That stories can literally make food (and wine) taste nicer is no bad thing. But it’s only a positive when you use the story to save money, to make inexpensive things taste better (e.g. treating dinner-party guests to an extra special bottle by regaling them with tales from the vineyard), not when you do the opposite and shell out for the story, not the substance. If you eat caviar, you're probably an idiot. If you want eggs, eat those of a hen. They are more nutritious and leave significantly more resources to buy other things with in addition. ## **What is price worth?** ***We use price to advertise qualities in us despite knowing it doesn’t advertise those qualities in others*** ### Would you rather be a bum, a billionaire, or a billionaire bum? We can – and should – laugh at people who parade pineapples. But we should not be too quick to dismiss the underlying life choice. After all, the behaviour is as common today as it’s ever been, and the symbols we’ve chosen to replace the exotically crowned fruit will doubtless seem just as silly to future generations. If the behaviour works – if it is an effective means of living a Good Life – we’d do better to mimic it than mock it. We cannot easily dismiss the question of this section – is it better to look rich, or be rich? – just because everyone when asked individually would probably pick the reality over the appearance. Actions don’t necessarily speak more loudly than words, but they do tend to speak more honestly, and our actions are bankrolling Team Appearance. So does it work? Does using one’s scarce resources to advertise one’s wealth (in the process directly diminishing the very wealth one is advertising) lead to a better result than alternative uses? Considering the other extreme – being rich, but advertising the opposite – suggests there may be something in it. There was a tramp in the city in which I grew up who was something of a local celebrity. He was known as ‘Dirty Ron’. Dirty Ron was mostly famous for burping at people as they passed. It was taken as a sign of affection. The grander the belch, the more he liked you. It was quite the social barometer. Dirty Ron, the stinky man with a wizard’s grey beard and all his worldly possessions in a shopping trolley, was rumoured to be a millionaire philanthropist. I’ve no idea if this were true. I’ve also no idea how Good his life was. I do know most people would not have swapped their life for his. While it may work for some, we do not, on the whole, want to be tramps, even millionaire ones. Though some *do*. And it’s impossible to say they are wrong to do so. The point is not the difference between being a bum and a billionaire – the identities of which are both tied to the numbers. The difference that counts is about the choices you make that shape the narrative those numbers are a part of – subservient to, not the director of. A better argument is that the performance of wealth is *not* a waste after all, but an investment. The showiness itself may detract from the Goodness of your life, but it opens doors that could lead to experiences and opportunities which *do* level-up your life in a way that justifies the price of the performance. Imagine you own a Ferrari. It will probably fail by itself to upgrade your life, because you’ll adapt to it pretty quickly. But maybe the perks of being a member of the Ferrari Owners’ Club are a reliable, sustainable, source of life-enhancing enjoyment. Were this the case, it would be hard to criticise such life choices. But I’ve been in the heads of these people. I’ve been to their homes, and to their parties. And if there is evidence, it’s damn well hidden. Every generation bemoans the degeneracy of its successors. Calls for character-building national service accompany each new evidence of youthful transgression, believing it would instil lessons beneficial to society as a whole. If we were really serious about such things, however, we wouldn’t send eighteen year olds off to make their beds and do obstacle courses with rifles slung over their shoulders. We would put them on private jets and send them to Champagne-soaked parties to prove how much they’re not missing, and how much of their lives they don’t need to sacrifice to find out. If those doing the dreaming could experience the life of those living those dreams, they’d quickly come up with different dreams. Not because being rich is worse… but because it’s rarely better, and when it is, it’s not because of the ownership of the stuff those dreams are made of. The appearance of affluence can open doors to real, positive opportunities. But in the vast majority of cases, it merely makes life more expensive (thus robbing you of resources to no end) and the doors it opens lead to more dead ends than exceptional opportunities. The appearance of being rich can only ever offer transitory pleasures, because even if it does lead to obtaining the money you were initially only pretending to have, so what? Does it cure the acquisitiveness? Experience and neuroscience strongly suggest not. Wanting more is because of your brain’s wiring, not because of how much you own… a lesson that my career in financial advice could not have taught more clearly. Having money should – and can – help you become a better person. But when you live in a world focused on the having (which by our actions and language around income, expenditure, and judgment of every little thing, we all do to a greater or lesser extent) money only avoids terrible pains, while making it *harder* to live a truly flourishing life.\[7] ### Is being rich (or being seen to be) an end in itself? It is fair to say, given the innumerable very rich and very evil or very dreadful people out there, that being seen to be rich cannot be an end in itself. And yet up to a point where to advertise one’s wealth is to make one a target for thieves or ostracism, exaggerating riches is as common as inflating skills on a CV.\[8] Whereas a philosophical worldview says there’s no point in having money if it doesn’t make your life better, the way we unphilosophically perform rather than possess wealth says there’s no point in having money if no one knows you do. So what is it we are trying to achieve? Why does anyone want to be seen to be rich? We want, in some amorphous way, to be valuable, to feel as though our life has some sort of meaning. This is a judgment, being social animals, that we delegate in some degree to others, which turns wanting to be valuable into wanting to appear valuable. And money – or rather the things that money can be sacrificed for – is both the most visible ‘value’, and the easiest to fake. Having resources is definitely useful for the tribe. Though while everyone likes to be useful, no one likes to be used. Otherwise we’d have far fewer saccharine films where the confused protagonist has to choose between their true love and a wealthy scoundrel,\[9] and far fewer millionaires on psychiatrists’ couches wondering if people only like them for their money. I think there’s something else going on. ### What do we want to be valued for? In some societies, being rich is so intertwined with being intelligent that one is read as the other without any apparent need to make the argument, even though a five-minute conversation with the average millionaire should be enough to dispel this notion just as for Churchill a five-minute conversation with the average voter was the best argument against democracy. For example, in Daniel Crosby’s *The Laws of Wealth* he casually writes: > As of the writing of this book, the median wage in the US is $26,695 and the median household income is $50,500. Let us suppose for illustrative purposes, however, that you are four times as clever as average and have managed to secure a comfortable salary of $100,000 per annum.\[vi] It’s not only America that believes cleverness = salary.\[10] An all-too-common refrain among those in the UK that have done nothing to ‘earn’ their wealth save being born is that such inequality of opportunity is fine because intelligence is the only ingredient needed to stop being poor. Perhaps because it was the chief source of judgment in those formative years before people began to be distinguished by anything else, accusing anyone of being an idiot is bound to piss them off. What luck that money – which any idiot can get hold of – can be used as a proxy for intelligence! ### Do extrinsic substitutes for intrinsic value work? Before concluding if, and when, appearances work, let’s return to your Ferrari. Imagine you bought it, as so many do, for people to think better of you. If you knew that the thing people consequently said about you was ‘they own a really cool car’ would that count? Would you feel as though you’d fulfilled a bit of your potential? Would it give you grounds for thinking that you were flourishing in some sense? Or would you rather they said that you were a great person? The latter has never been attributable to owning anything. It’s a consequence of character, not cash. We use cash as a substitute, because we’ve deceived ourselves into thinking the numbers and the having are what matters. ‘Must be doing something right!’ we say… ‘right’ again being a proxy for ‘is an intelligent person’ and therefore, just as the weeds were breaking through, perhaps because of the breakthrough-riches of the latest reality-TV airhead, our brain’s ‘expensive stuff = intelligent person’ pathway gets re-paved. The deception is so strong that even if we never see a great car and think the driver must therefore be a great person, we believe that we’ll be seen as an exception to this. We believe it so strongly we’re willing to bet potentially life-changing sums on the possibility. ### The self-deceptive show is unsatisfactory and unsustainable Appearances are proverbially deceptive. And in the relationship between money and the Good Life, the prioritisation of price signals is the clearest expression of our self-deception. It says the value of money is the number. It sees the worth of the world – including you – through what you have, and it acts as such a strong default, that we rarely question if using it as a proxy for value actually works. And it doesn’t. Not all ways of wasting our lives in a desperate bid to look as though we aren’t are as silly as having people round to view rotting fruit. But subtlety is more dangerous than silliness; more modern manifestations of pineapple posturings are more pernicious for being less public. Neither being rich nor being seen to be rich works on its own. But it is better to be rich than look it, for being rich at least provides resources that can be turned into a Good Life, if we use them wisely. {% content-ref url="/pages/-Md66szL7cST8kEBIltJ" %} [2.2.3.2: Is it better to own or to rent?](/the-book/2/2.2/2.2.3/2.2.3.2-is-it-better-to-own-or-to-rent) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \--- \[1] ‘For most of human history, there truly was a strong correlation between cost and value: the higher the price, the better things tended to be – because there was simply no way both for prices to be low and quality to be high. Everything had to be made by hand, by expensively trained artisans, with raw materials that were immensely difficult to transport. The expensive sword, jacket, window or wheelbarrow were simply always the better ones. This relationship between price and value held true in an uninterrupted way until the end of the 18th century, when – thanks to the Industrial Revolution – something extremely unusual happened: human beings worked out how to make high quality goods at cheap prices, because of technology and new methods of organising the labour force.’ – The School of Life, *The Book of Life* \[2] This is not to say that all cheap things are bad. Far from it. All the best stuff costs next to nothing. But if there’s it’s reasonable to doubt how a good could be produced so cheaply, it’s probably not a good good. \[3] Crudely, of course. Economists talk of ‘externalities’ – societal judgments that are not picked up by the basic supply and demand of something, which is why we tax smoking and subsidise energy-saving. I’m assuming here that whatever their faults, prices reflect society’s choices, even though it’s not quite as simple as ‘if people really valued nurses more than bankers, they’d vote for a government that reflected this.’ \[4] Recall our earlier look at the role luxury goods play in societies where it is dangerous to be average. \[5] Recall also the difference between sticking to societal rules and choosing cultural expressions. \[6] Recall [Part 2, Section 2.1.1](/the-book/2/2.2/2.2.1/2.2.1.1). \[7] Biblically knowledgeable folk will be reminded of camels and eyes of needles here. \[8] I’m choosing to overlook those that would literally kill for money, or be a slum landlord, even if, as macabre Twitter polls hint, a terrifying number of people would press a button to make themselves an easy million if someone unknown somewhere drops dead as a consequence. \[9] Though of course even here the world still clings to its numbers obsession, and it’s always a ‘happier’ ending when the ‘poor’ true love turns out to be even more minted than the wealthy scoundrel after all. \[10] I realise there may be artistic licence involved here, but that does nothing to diminish the cavalier linking of the two. \--- \[i] The School of Life, *The Book of Life* \[ii] Bethan Bell for BBC News online \[iii] The School of Life, *The Book of Life* \[iv] With apologies to Monty Python, and the Knights Who Say ‘Ni’ \[v] David Foster Wallace, *Consider the Lobster* \[vi] Daniel Crosby, *The Laws of Wealth* # 2.2.3.2: Is it better to own or to rent? Most of the time, the desire to own things reflects a failure to see what’s valuable to us ## **Beware the ownership fallacy** ***Ownership is always tempting, but rarely inherently valuable*** ### The onanism of owning Personal-finance author and online-course-creator Ramit Sethi relates how, when he has people over to his apartment, learning that he rents rather than owns it, reactions pop from ‘oh, niiiiiice!’ to simply, ‘oh.’. Try this. Hear yourself saying: ‘she’s done well for herself’. Listen to your intonation. Picture someone you might be saying this about. Now do the same but for ‘she’s doing well for herself.’ Notice any subtle changes in intonation, or in what you thought about the person you pictured? Now imagine you’re out strolling along and catch sight of an especially good-looking house, car, or person. How likely are you to have just leapt to a dream of acquiring it? In each of these situations, we jump to a judgment about a whole life – what to think about someone, or a fantasy version of ourselves – based on the scantest of information. Ramit thinks about personal finance decisions *professionally*. And every one of his guests knows he’s loaded. So why do they exhibit knee-jerk disappointment in his life choice? If you’re like most people, you were less impressed with your imaginary ‘doing well’ person than your ‘done well’ one. \[1] Why? Why, to quote Maria Nemeth in *The Energy of Money*, do we jump directly from the realm of Ideas (“Wouldn't it be great to have a sailboat!”) to the goal of buying a sailboat – without first seeing what specific Life's Intention having a sailboat fulfils.’\[i] Why do we so instinctively crave ownership of certain objects – even, as we saw earlier,\[2] to the extent of ruining ‘experiences’ – when, were we to reflect on whether the acquisition of similar objects had made our lives, or the lives of those that own what we crave, sustainably better because of the acquisition? This isn’t a clarion call for communism, or minimalism, or any other dogmatic approach to ownership. Ownership of certain objects *can* work exceptionally well. But anything that’s both so instinctive, and has such a terrible track record, should inspire us to stop and think, not simply accept and chug blindly along. \* ‘Man has two aims,’ wrote Jung. ‘The first is the natural aim, the begetting of children and the business of protecting the brood; to this belongs the acquisition of money and social position. Only when this aim has been achieved does the new aim – “the cultural aim” – become feasible.’\[ii] Recall\[3] too the two functions of the storytelling that creates our sense of ‘self’ – the protective function and the progressive function. Our problems arise not with acquisitions per se, but when we get led astray by the self-deceptive belief that price to the world is a sign of value to us, and hence that acquiring more is inherently beneficial… such that we forget the second aim, even when the first has been covered a hundred times over. We thus get stuck believing that acquisition is the answer to all our aims, as opposed to a very basic subset of them. The ownership fallacy is the belief that there is an intrinsic benefit to owning something, over and above merely using it for a time. It engulfs potential-fulfilling opportunities in a conflagration of deceit.\[4] The ownership fallacy reflects several of the silly expressions of our screwy relationships with money that we’ve looked at already, including: * **Appearing to be wealthy is better than being wealthy** – We are wired to signal worth with waste, and must justifications of our sacrifices take the form of owning something.\[5] * **Your life choices have basically already been made** – Wanting to own something indefinitely is a product of falling victim to the ‘end of history illusion’. If you believe that who you are today is who you will remain, you prioritise what you have over who you are becoming, thus overlooking the most obvious of facts that this is both depressing and deluded.\[6] * **Certainty is both real and can be bought** – Acknowledging, on some level, that end of history is indeed illusory – that psychologically, narratively, we are not set in stone – that our lives are defined by impermanence, is the cause of existential anxiety.\[7] When we fail to meet this reality with courage, we instead desperately scramble to create certainty by setting parts of our life in stone manually. By owning something, we believe we never have to think about that part of our life (and whether what we own continues to positively contribute to it) again, when what we’ve actually done is created the opportunity for further anxiety, by attaching ourselves to something that can be lost.\[8] There are plenty more subtler expressions too. The roots of our acquisitive tendencies run deep. That doesn’t make them any saner. It just makes them harder to both admit, and to remove. Bertrand Russell ranked acquisitiveness – ‘the wish to possess as much as possible of goods, or the title to goods’ – among four insatiate human desires. He said it ‘is a motive which, I suppose, has its origin in a combination of fear with the desire for necessaries.’\[iii] In the living of a life, a desire for necessaries has some crucial differences to a desire for superfluous crap, but unless it’s consciously challenged to make its case, a brain wired for acquisitiveness acknowledges no such differences.\[9] D.T. Suzuki wrote that: ‘The desire to possess is considered by Buddhism to be one of the worst passions mortals are apt to be obsessed with. What, in fact, causes so much misery in the world is due to a strong impulse of acquisitiveness.’\[iv] That acquisitiveness is inevitable and terrible does not mean that it can’t be controlled – we can learn not to succumb to it when it’s unhelpful to do so. We may squirm with discomforting resonance upon reading Siddhartha: > The world had caught him; pleasure, covetousness, idleness, and finally also the vice that he had always despised and scorned as the most foolish – acquisitiveness. Property, possessions and riches had also finally trapped him. They were no longer a game and a toy; they had become a chain and a burden.\[v] But we do not need to stay trapped when we hold the keys to our cages. We can learn to set ourselves free. We learn most easily from extremes. In human behaviour, obvious examples are joined to subtler ones by psychological threads, and what we may struggle to see in ourselves, we can instead see in others before tracing it back. In the case of acquiring things this means the people that can (monetarily) afford to do so. ### What can we learn from the ‘really rich’? When people that aren’t ‘really rich’ dream of being so,\[10] it’s usually characterised by owning private versions of what are usually communal things (swimming pools, tennis courts, etc.) and travel – more of it, doing it ‘in style’ (i.e. more expensive hotels, legroom on flights, and brand-name destinations), and ‘owning’ the experience (i.e. choosing holiday homes over a bigger travelling budget). My experiences inside a hundred heads of those that own what other people dream of doing so, are unified, however, not by greater happiness, but greater hassle. It is an anthology of the unravelling of unrealistic expectations, told in a hundred different ways. Gone is the automatic camaraderie of the tennis club and in is the frustration of not getting as good, or getting as much use out of the private court as expected (not to mention the maintenance). In *Meaning in Life and Why it Matters*, Susan Wolf points out that regardless of any direct ‘objective’ value, sports provide the opportunity for indirect value: > Even if basketball, removed or abstracted from its now established place in our culture, is not an objectively valuable activity in itself, it provides an opportunity for much that is of value. It provides an opportunity for the cultivation and exercise of skill and virtue, for the building of relationships, and for the communion that comes from enthusiasm for an immersion in a shared activity.\[vi] None of which is enhanced by ‘owning’ the activity. Yet because we blindly bound from knowing something is good to wanting to own it, we burn resources on ineffective attempts to meet inadequately understood needs. The memories of magical afternoons with friends in one’s private Eden can soften the sting, of course, but the point of friendships is that the magic of such afternoons is entirely attributable to the human connections that render the circumstances irrelevant. If you need an absence of other people to make a picnic in a park enjoyable, the problem isn’t the other people. When judging whether the price of something is worth paying, it’s foolish to compare something to nothing rather than what would have happened otherwise. It’s not that private versions of such things can’t be great, it’s that their reality isn’t as great as their expectations, and the benefit of the privacy is not extra joy, but a means of hiding from fears that, as always, are better faced. ### How not to holiday Amid these first-percent problems there is one hassle that always stands out: holiday homes. Every client I’ve ever known had a holiday home. Every one regretted it. Again, not because it was bad *in isolation*, but because it was bad *in context*. It was a bad *life choice*.\[11] It is never holiday home versus nothing. It’s holiday home versus a million other opportunities. Where the choice concerns a life, if you break something down for analysis, never forget to put it back together again for judgment. Those with holiday homes come to understand that holidays are better rented than owned. Where foresight dreams of less logistical rigmarole, really getting to know a place, and having something to show off to friends, hindsight would’ve preferred turning the one-off outlay into an annual holiday budget, the lack of a sunk-cost anchor weighing on every decision about where to explore next, not having to deal with maintenance, and remembering that it’s really not hard to have a fun time with friends on holiday… wherever you go. Travel in general is primed for price-value deception. ‘Some men,’ wrote Bertrand Russell: > will travel through many countries, going always to the best hotels, eating exactly the same food as they would eat at home, meeting the same idle rich whom they would meet at home, conversing on the same topics upon which they converse at their own dinner-table. When they return, their only feeling is one of relief at having done with the boredom of *expensive locomotion*.\[vii] \[my emphasis] ‘Other men,’ he continues: > wherever they go see what is characteristic, make the acquaintance of people who typify the locality, observe whatever is of interest either historically or socially, eat the food of the country, learn its manners and its language, and come home with a new stock of pleasant thoughts for winter evenings. In all these different situations the man who has the zest for life has the advantage over the man who has none. Even unpleasant experiences have their uses to him. I am glad to have smelt a Chinese crowd and a Sicilian village, though I cannot pretend that my pleasure was very great at the moment. Russell’s quote reminds me of a personal story. A few years ago, a friend was passing through London with her grandmother and her grandmother’s partner. They invited me to dinner at Heston Blumenthal’s gastronomically inventive outlet in the Mandarin Oriental, where they were staying. Wherever they were in the world, and being a wealthy retired couple, they were often somewhere that wasn’t home, grandmother and partner *always* stayed at the Mandarin Oriental. To distract himself from the perplexities of the menu (which culminated in asking the waitress ‘do you have anything that’s like a hamburger?’) the partner was telling me how they’d just been on a cruise through Norway. Oblivious to Norway at the time having a higher per-capita GDP than ‘*the greatest country in the world*’ (a label he seemed incapable of mentioning the US without appending), he talked of his surprise to see such abundant evidence of modernity, as if he had been expecting nothing but wooden shacks and people riding on donkeys. Different people get different things from travel, of course, though I’d argue that both holiday homes and travelling ‘in style’ misunderstand that what gives value to travel is not taking your tunnel-vision on a protected tour of other branches of your favoured hotels and boutiques… whatever the price tags say. \* On another occasion, I went to Hawaii to take part in an event. I was part of a group of a dozen people. Nine had come from North America, one from Australia, one from Zimbabwe, and me, from the UK. None of us knew each other beforehand. The other 11 chose to stay in the five-star, flamingos-in-the-front-garden, $500-a-night Westin. I opted for the $20-a-night, backpacking-bums-in-the-bar hostel, pretending to be one of the cool kids. One afternoon, the hostel bundled a bunch of us into a van for a hike to a waterfall. An intense and occasionally scary scramble through thick forest and sliding down slippery banks culminated in a spectacular secluded swimming hole. Cost of admission: whatever you felt like tipping the driver. One assumes that anything more official would never have got health-and-safety sign-off. A few of the 11 had been tempted by a Westin-organised waterfall hike. On an unadventurous trail, to a crowded destination, and for $200 a head. I’m not claiming one is better than the other – that’s a subjective judgment. But deeming the latter better *because* of the price tag is clearly insane. Yet in many subtler – and therefore more dangerous – ways, we all make such judgments all the time. Especially when it comes to travel, time with friends, and other experiences where the value, as we saw with ‘How not to buy experiences’ in the previous chapter, not only isn’t correlated with the price, but whose value can be *eroded* by trying to turn it into something material. Do the owners of football clubs get more out of the club than the fans? \* As Derek Sivers’s third piece of advice for anyone wanting to ‘stop being rich and happy’ goes: ‘Buy, not rent. Why rent a house, a castle, a boat, or a car when you can buy? It’s not about the thing, it’s about identity. This shows who you are now.’\[viii] If being a house works better for you than being a human, do it. If not, don’t. ‘The more we associate experience with cash value,’ wrote Ralf Potts in Vagabonding – a book about how to do long-term travel, regardless of budget, ‘the more we think that money is what we need to live. And the more we associate money with life, the more we convince ourselves that we're too poor to buy our freedom.’ Both actually rich and aspirant rich greatly desire being rich to be different. Sacrifices need to be worth it. What’s the point of a finding yourself in a special set of circumstances if you don’t feel sufficiently special because of it? Likeable things must be *more* likeable when they cost more. More expensive *must* be better. Once, this was satisfied to some extent with certain holiday destinations or brand-name goods being off-limits to all but the most rarefied societal strata. This is no longer true, so we’ve had to invent stuff that’s not in any way better but is more expensive. The misperceived ‘value’ persists: not because you can have something, but because others can’t. ## **The relevance of renting** ***Most things are better rented than owned. Remove the unthinking link between seeing a shiny pretty thing and setting your sights on owning it and you remove a huge drag on your ability to turn your resources into a Good Life.*** Humans are a work in progress. We may believe we’re chasing ‘contentment’ of some form, but it is the process (including appropriate rests en route) that is the prize. We want to flow, not stagnate. Yet by striving to own permanence in an impermanent world, we sell our souls to stagnation. A healthy relationship with money is, in the majority of instances, better realised and reflected through renting. Act as if you’re renting everything, including the stuff you own. Music, films, clothes… we’re burdened by stuff that no longer serves a purpose beyond cluttering our closets and our minds (occasionally with seriously expensive knock-on effects, like buying a bigger house to home not us, but shit we never use). The ‘endowment effect’ turns the sheer act of owning stuff (even simply *believing* we own it) into making us value it more, despite no change in how well the stuff serves us.. This is not helpful. When you view stuff primarily as whether it is serving you or not, the ownership fallacy relinquishes its hold over your decision-making, and you focus on an object’s value rather than its price. Viewed through a wider lens, we don’t even own what we think we do. For example, for most people, the most expensive thing they ‘own’ – their home – is owned, in part, by a bank. Moreover, ultimately everything is rented, on account of your inevitable death. Taking this further, those living the best lives have learnt to apply the same concept to their thoughts. Given that we’re all ignorant about basically everything, thoughts are definitely better rented than owned. Just as showing off stuff can blind you to the things that most reliably make you shine from within, broadcasting a thought – or even the characteristic of being a thinker, say – can stop you from living the very open-mindedness you are wearing. We show-off only our insecurities. And whereas being a bit too attached to some old DVDs may make a minor mess of a shelf and a mind, being too attached to opinions messes up the world. ### You can’t own insight Those at all familiar with Buddhism will recognise the connection with the proverbial raft that, once it has got you across the river, needn’t be carried up the hill the other side. Thich Nhat Hanh also makes the useful distinction between a notion and an insight: > Say we strike a match to get a flame. As soon as the flame manifests, it begins to consume the match. The notion of impermanence is like the match, and the insight of impermanence is like the flame. As the flame manifests, it consumes the match, which we don’t need anymore. What we need is the flame, not the match. We’re making use of the notion of impermanence to get the insight of impermanence.\[ix] Ownership is an unhelpful attachment to an unhelpful pattern of mental wiring. Even the notion of ‘owning v renting’ can become unhelpfully ‘owned’; it is the insight it provides that we really want: the acute consciousness of applying the notion to each money decision can be let go once we’ve rewired ourselves. To see things as rented rather than owned, to focus on their value, not their price, is liberating. It frees us from the chains with which we shackle ourselves rather than face the fear of an inescapably uncertain future. To return to Thich Nhat Hanh: ‘Thanks to impermanence, everything is possible.’\[x] When we own only truly valuable things, based on their subjective function or beauty, and not their objective price tag (including ‘bargains’) we embolden our story, not burden our stores. We pass with a smile through a snapshot on the journey of who we are becoming, rather than showcase an insecure substituting of stuff for character. ## **The only thing we don’t want to own is the only thing we should** ***The most important thing to own is responsibility, yet it’s the main thing we run from*** Financial journalist Jason Zweig recounts a story of a million-dollar parking spot. He questions ‘whether the right term is “ethically dumb” or “ethically dead” not to be bothered by this.’ ‘Money,’ he continues, ‘should be more valuable to people than that.‘\[xi] It’s a problem not only for the parker… > If you need to pay a million dollars to park your car, something’s wrong with you. You’re living in the wrong place, you’re not thinking about the virtues of walking around the corner to where a parking spot costs you $500 a month, and something is dangerously wrong in your mindset. …but also for the world: ‘It says something disturbing about society as a whole that somebody would be willing to take $1m and light it on fire that way.’\`96 Zweig’s assertion that ‘If you have a million dollars to burn, and the best thing you can think of to do with it is to use it to have a place to put your car, something is just disturbingly wrong with you’ recalls my earlier assertion that: > If we viewed expenditures through an absolute, rather than a relative lens – if we questioned (especially with the big stuff) if the choice we were making were the single finest use of the money we were making it with, we’d soon start to focus a lot more on what actually mattered.\[12] I like to believe the majority agree with Zweig. But the mindset in question wasn’t *created* by having $1 million to burn. It was *expressed* by it. The history of fascist movements shows that all the worst expressions of inhumanity start small, before gradually sucking in millions of people who were once adamant it could never happen to them. The madness displayed by a million-dollar parking spot is an expression of something that lives, to some extent, in all of us. We just lack the funding to express it in such obvious ways. We should be alert for the less-obvious ones. Part of examining our lives is to use the extreme examples as instructive spotlights: what do we do that’s just as silly, only less magnified by money? We each have a responsibility to be aware of these trade-offs. And that responsibility increases with power (whether that power comes from money, time, knowledge, intellectual capacity, one’s network, etc.) This is not welcome news for most people, especially those that have hoarded money precisely to avoid the responsibility of their spending decisions. But that doesn’t mean it doesn’t have a real effect on the Goodness of a life. It’s the source of the underlying niggle every rich person feels when they’re aware, consciously or otherwise, that they’re not making the most of their money. They often acknowledge the niggle, but they rarely admit the cause. All expenditure is inescapably ethical. Because it’s always a trade-off that expresses a choice of how we want the world to be. Renting is preferable to owning because it better reflects this responsibility. But this responsibility also highlights the one thing that is better owned. We should own what we don’t want to change. And while our circumstances are inevitably always changing, our deepest values – the ones that underlie our spending decisions – are far less variable. It is these that we should ‘own’: that we should use to determine prices, not be determined by them. {% content-ref url="/pages/-Md66tA9OK9YqPGy6Bzr" %} [2.2.3.3: There is always an underlying emotional reward](/the-book/2/2.2/2.2.3/2.2.3.3-there-is-always-an-underlying-emotional-reward) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \-- \[1] Either version of the phrase is of course a terrible indictment of our wiring. See [Trigger #17: Done well for themselves](/the-book/1/1.5/1.5.4#17-x-has-done-well-for-themselves). Outside of the relatively ugly scoring hot dates, to say ‘done well for themselves’ or ‘doing well for themselves’ is to say ‘they own expensive stuff’ or ‘they have a high salary’. We use such wafer-thin euphemisms, because despite being one of the first things we think about rich people, the last thing society dictates we should say… though even then the temptation to squeeze it out still proves overwhelming for many. \[2] [Part 2, Section 2.1.2](/the-book/2/2.2/2.2.1/2.2.1.2#how-not-to-buy-experiences), ‘How not to buy experiences’ \[3] From [Part 1, Section 1.2](/the-book/1/1.1/1.1.2). \[4] The ownership fallacy is also a part of the larger ‘arrival fallacy’ that gets its own section in the next chapter. \[5] Recall [Part 1, Section 2.1](/the-book/2/2.2/2.2.1), ‘The conspicuous consumption con’ \[6] Recall [Part 1, Section 1.2](/the-book/1/1.1/1.1.2#who-or-what-is-your-self), ‘Who or what is your ‘self’?’ \[7] Recall [Part 1, Section 4.2](/the-book/1/1.4/1.4.2#the-difference-between-success-and-failure), ‘Is success for sale?: The difference between anxiety and fear’ \[8] See also Stephen Batchelor, *Alone With Others*: ‘Though a person is by nature acquisitive, the very act of acquisition is a source of anxiety, since whatever is acquired can at any moment, and in a hundred different ways, be lost.’ \[9] The other three insatiate desires are: rivalry (‘a great many men will cheerfully face impoverishment if they can thereby secure complete ruin for their rivals’); vanity (‘ “Look at me” is one of the most fundamental desires of the human heart. It can take innumerable forms, from buffoonery to the pursuit of posthumous fame’); and love of power, which Russell considered important enough to write a whole book about. \[10] Recall [Part 2, Section 1.1](/the-book/2/2.1/2.1.1): by most reasonable measures, far, far, more people are rich than believe they are. \[11] Of course, holiday homes are not inherently awful decisions. They may well work for some. But they don’t work for nearly as many as believe they will. \[12] [Part 2, Section 2.2.1](/the-book/2/2.2/2.2.2/2.2.2.1-give-give-give-me-more-more-more) \-- \[i] Maria Nemeth, The Energy of Money \[ii] Carl Jung, *Two Essays on Analytical Psychology* \[iii] Bertrand Russell, 1950 Nobel acceptance speech \[iv] D.T. Suzuki, *Essays in Zen Buddhism* \[v] Hermann Hesse, *Siddhartha* \[vi] Susan Wolf, *Meaning in Life and Why it Matters* \[vii] Bertrand Russell, *The Conquest of Happiness* \[viii] Derek Sivers, interviewed on The Knowledge Project podcast \[ix] Thich Nhat Hanh, *The Art of Living* \[x] Thich Nhat Hanh, *The Art of Living* \[xi] Jason Zweig, interviewed on The Knowledge Project podcast . Also written in the world before NFTs. # 2.2.3.3: There is always an underlying emotional reward What we seek when buying any good or service is an emotional reward, and it is against that that spending decisions should be weighed, measured, and judged ## **We know what we want, but we don’t know we know when we need to know** ***Purchases are investments in meeting emotional needs*** How do you know when you’re being ripped off? You compare what you thought you were getting with what you got. If the latter doesn’t match the former, you feel cheated. This is at the heart of this book – we think we’re getting the Good Life (why else would we sacrifice our precious resources?) yet because we’re misled into seeing deceptive substitutes for what we really want, the sacrifices of our exhaustible resources are in vain. Knowing whether something’s worked should be easy – we should just ask ourselves if it worked. But instead, we choose to make it difficult, perhaps fearful of what would happen if we admit we’ve been chasing the same thing forever and haven’t got reliably better at it. If you don’t revel in reviewing your calendar and credit-card statements… why not? As we saw earlier: > We have an intuitive understanding of what we want – we feel we’re living the Good Life when who we are and who we want to be align. We desperately seek this alignment in all of our actions. Which is precisely why we bugger it up: desperation drives us towards shoddy substitutes.\[1] When we looked at unexamined expenditure we noted that: ‘We clutch at social performance as a substitute for something more meaningful, because we are too distracted and deceived to understand what it is we’re subbing it in *for*’ and quoted the School of Life: ‘We choose the wrong things because we don’t know ourselves well enough to select what will best work for us.’\[2] What concerns us here is *why* this happens. Why are we so bad at calibrating our wants? Of course who we are is in flux, but many of us have had decades of trial and error and oodles of individual transactions to learn from. We should be getting better much faster than we are. \* Some purchases meet purely functional needs – things we know only on a propositional or procedural level. Most things, however, play a deeper role in our lives – we know them, or rather should know them, on a perspectival and/or participatory level. We want all purchases to align with our wants: and most of those wants are emotional. Yet when it comes to money we treat everything as if it’s swimming in a shallow pond of isolated events, not the open ocean of human experience. On some level, the thing we believe we’re buying is rarely what we’re actually buying. The thing is only a symbol for an underlying emotional reward. This is one of the most important concepts in all of financial advice. It’s at the heart of our having-mode / becoming-mode confusion. If a need is going unmet, and we don’t know why, we’ll continue trying to meet it in the same way, and rather than honing in on the answer, instead get increasingly confused as to why it’s not working. As Mark Manson put it: > People with an overwhelming desire for wealth or fame aren’t motivated by the pure joy of having wealth or fame. No, they have a hole in their psyche that they are trying to fill with enough stuff to not make them feel so inadequate anymore.\[i] There are echoes here of the ‘Object Relations’ theory from psychoanalytic psychology. As described by Lavinia Gomez: > To see oneself and others as thing, object, possession, rather than subjective stream of consciousness and unconsciousness, is to be tied to sensation without meaning.\[ii] People buy things for all sorts of purposes, but to lead a meaningless life isn’t ordinarily one of them. This goes beyond simply swapping material goods with experiences,\[3] as Bertrand Russell explains: > Fads and hobbies, however, are in many cases, perhaps most, not a source of fundamental happiness, but a means of escape from reality, of forgetting for the moment some pain too difficult to be faced. Fundamental happiness depends more than anything else upon what may be called a friendly interest in persons and things.\[iii] The whole point of defeating self-deception is to do the opposite: not to escape reality, but to embrace it, and so steer it, rather than living defined by fear of it. This is good news! For it means we’re not materialistic monsters, we’re just a bit misguided. And ‘a friendly interest in persons and things’ is so much easier to save up for than a McMansion. Hear too Alain de Botton from the TED stage, in a passage so good it deserves memorising: > I don't think we are particularly materialistic. I think we live in a society which has simply pegged certain emotional rewards to the acquisition of material goods. It's not the material goods we want; it's the rewards we want \[...] The next time you see someone driving a Ferrari, don't think this is somebody who's greedy; think this is someone who is incredibly vulnerable and in need of love. Feel sympathy rather than contempt.\[iv] In summary, and in the words of a man from a domain that both understands and exacerbates our substitution errors, marketer Rory Sutherland, ‘We don’t value things; we value their meaning.’\[v] We, deep down, value goods and experiences not because of their price tags, but because of what they add to our narrative; not because we can show others that we ‘have’ them, but because of what they help us become. ## **Investing in a meaningful life** ***Making more meaningful choices requires challenging the ones you’re already making*** This chapter has, like sunrise over the Great Pacific Garbage Patch, shone a light on waste we’d rather pretend didn’t exist, but that subtly accumulates into a stinking millstone of poor life choices. Every day, we are attempting to turn our resources into a Good Life. Every day these attempts fail because of the self-deceptive beliefs on which they’re based. The foundations of a Good Life are built by cutting out the crap – training ourselves to play a different game than the unwinnable numbers-based one obsessed with income, ‘more’, and price tags. But if all purchases are investments, and we’re investing in a meaningful life, it would help to identify some positive investment criteria too. How do you buy meaning? ‘Meaning in life,’ wrote Susan Wolf, ‘arises when subjective attraction meets objective attractiveness, and one is able to do something about it or with it.’ When one is living, she continues, ‘in a way that connects positively with objects, people, and activities that have value independent of oneself harmonizes with the fact that one's own perspective and existence have no privileged status in the universe.’\[vi] That is to say: when you align your resources with your wants – what is Good for you – and those wants are in turn aligned with what is Good for the world, then you’re cultivating meaning in your life. If this sounds familiar, it’s because it’s the same aim as outlined in Part One when discussing the goal of phronēsis (practical wisdom): ‘not only how to choose a path to an end, but how to choose the end most consistent with the aim of living well overall.’\[4] You don’t need an Ancient Greek to tell you that wanting the ‘right’ things is better than wanting the wrong ones. Yet want counts as ‘right’? What qualifies as ‘objective attractiveness’? Wolf makes the case, and I agree, that it doesn’t matter. Much like ‘the Good Life’,\[5] ‘objective attractiveness’ defies definition… but we know what *isn’t it*. Even if we could pin it down, who’s to say it wouldn’t change? The world, after all, has a habit of changing. Our problem is not the lack of an objective measure, but believing that there has to be one, and so filling the void with deceptive bullshit. Like believing ‘more’ is better, or that price is a fair proxy for value. Dissolving these self-deceptive beliefs means giving up the craving for certainty. It means a shift in worldview from one fixated on fixity to one open to the reality of impermanence. It means reacting to this reality, not with a hypercorrective leap to a nihilistic rejection of everything, but with embracing a process of examination and refinement. The aim is not to *have* perfect judgment, but to *become* a better judge. Where money is involved, it’s an almost universal trait that people seek it to not have to think about what it all means – to forget about the responsibility of using their resources wisely. Yet this not only doesn’t work, it cannot work. More money – more ability – means more responsibility. Plenty have tried, do try, and will continue to try to escape this, but they’ll never escape the niggle… the niggle that says ‘there must be more to life than this…’ that wonders why acquiring the money they sought didn’t weaken the worries they sought it for, and that goes on believing the answer must be that they simply don’t have enough of it yet. Seeing ‘better judgment’ as a thing to possess, rather than a side-effect of becoming a better judge, is self-defeating. Because it denies the reality that to be a better judge, we must see the world more clearly. Nothing meets with more resistance than admitting that the way we see the world must change. In many aspects of our life – and money is chief among them for countless people – nothing runs deeper. As Wolf explains: > Our initial pretheoretical or intuitive judgments about what is valuable and what is a waste of time are formed in childhood, as a result of a variety of lessons, experiences, and other cultural influences. Being challenged to justify our judgments, being exposed to different ones, broadening our range of experience, and learning about other cultures and ways of life will lead us to revise, and, if all goes well, improve our judgments.\[vii] The core message of the first two parts of this book is that seeing more clearly starts with making peace with your illimitable ignorance… being open to the possibility that the way you’ve known something you’ve interacted with every day of your life – from unconsciously inheriting your parents’ financial demons to your career choices and spending decisions – could be causing you unnecessary admin, angst, or anxiety. The immediate danger of challenging any long-held belief is rebounding into something equally silly. Lost a faith? Find another! Beaten an addiction? Watch another rush in to fill the void. As Jung explained: ‘You can take away a man's gods, but only to give him others in return.’\[viii] Or, as H.L. Mencken put it: ‘A convert to a good idea is simply a man who confesses that he was formerly an ass – and is probably one still.’\[ix] Price tells us we needn’t bother with the hard graft of thinking about what to do with our money – there’s an objective answer, and it’s written in language your wallet can understand. Considering subjective value, on the contrary, causes us to think about what we actually give a crap about. You can give a crap about lots of things, and too easily fix on the less-meaningful ones *because* you believe that as long as you’re not starting from the price tag, you’re doing it ‘right’… even though the faulty mechanism of searching for the easy, eternal, answer hasn’t changed. The underlying emotional rewards we’re really after are not objective, or even subjective. They’re transjective. Time for another short philosophical detour. ## **Beyond objective and subjective: introducing transjectivity** ***Money no more has objective meaning than language does; it both expresses and shapes your life, as a part of that life, not as an external, objective tool*** To best understand transjectivity, recall our four ways of knowing something.\[6] To recap: 1\. **Propositional knowing** – This concerns statements of fact. It is knowing what stuff is, usually in the form of ‘I know *that*…’ You find propositions in textbooks. 2\. **Procedural knowing** – This concerns technical skill; pragmatic, practical know-how. It is how stuff works, not just what stuff is. It is about competence and mastery – it is deeper than propositions that can be learned from a textbook. 3\. **Perspectival knowing** – This concerns awareness and perception in context. It is knowing what is relevant right now. To know money perspectivally is to know what it is like to be a person that has some. 4\. **Participatory knowing** – This concerns a shared, symbiotic, identity-based knowing. There is an inherent degree of internalisation (rather than mere ownership) of object by subject. You and your money, to some extent become one. Our participatory relationship with money is incessant. Our interactions with it are constantly shaping our identity and the environment in which that identity is finding its way. And the money-environment in turn shapes us. It is in our participatory knowing of money that we discover how to turn money into meaning. How we understand the money in our lives as an interactive narrative, rather than an incidental series of numbers. How we see it not as an isolated something to have, but as something that is part of our whole human life, and that, used wisely, can help us in our never-ending, gloriously destination-less journey of becoming the sort of human we want to become. Cognition – the sort of conscious thinking that can steer us along this journey, rather than leaving the whole thing up to chance – happens mostly in interaction between subject and object. The fact that there’s no such thing as objective attractiveness doesn’t matter. Because that’s not what we want. We want a transjective relationship with the world – the life we are trying to make Good exists as a part of the world, not alongside it. If we want meaningful lives, we want to live in conditions that enable meaning making. We want to live in an environment that *affords* – i.e. has qualities that make it clear how something should be used, like a door handle that encourages you to push it and pull it in certain directions – meaning making. We want, to borrow once again from Vervaeke, to realise (in both the sense of understand and bring about) what is relevant. > Relevance is a product neither of objectivity or subjectivity. \[…] Relevance is transjective – a real relationship between an organism and its environment. Not projected or detected. It is realised (objective sense: to make real; subjective sense: coming into awareness).\[x] This is torture to minds dead-set\[7] on grasping for certainty. Those minds crave an environment where nothing has to be made, because everything is already perfect and will remain that way forever, while also magically never becoming stagnant. They are short-sighted, narrow, minds… addicted to analysis within categories, but blind to the fact those categories are only ever a veil to help with understanding a whole life; they are not the life itself. Importantly, we not only want to live in environments that afford the chance for meaning making, we want to care about creating them. Because to do so is to care about being human… about living a Good Life. ‘The process of meaning making,’ said Vervaeke, ‘is the process of being a person. \[It’s] why being connected to other people is so important to meaning in life.’\[xi] \* That, of course, all sounds wonderful. But what does it mean in practice? How does one create such an environment, such a life? How does one create the conditions for living a different way, when it is likely only by living in that different way that one understands what it even looks like? This returns us to our discussion of the symbol.\[8] When seeking answers to questions we don’t yet know how to ask appropriately, we need to see symbolically. A symbol brings together the subjective and the objective. The clue’s in the name… *trans–*. Symbols help us bring the objective into the subjective. They give us glimpses of an alternative vision. They are whatever makes us stop and ask ‘What if…?’ ‘Does that have to be true?’ ‘What if it weren’t?’ They allow us to experiment with the answers, in the process of living a truly examined life. We’ve seen how ever since Buddha and the Greeks (at least) we’ve known that the Good Life emerges as a result, ultimately, of paying attention to the right things. But as we saw with the flaws in the ‘spotlight’ metaphor of attention, paying attention is ‘less the concentrated snapshot of a spotlight and more a process of continually renewing your interest, and refreshing your intention. It is a tuning in not a concentration on.’\[9] In other words, the Good Life happens not by ‘willing’ it into existence, but as a side-effect of mindfully engaging in other activities… similar to the way Susan Wolf described basketball in the previous section.\[10] As Wolf concluded: ‘If we want to live meaningful lives, we cannot try too hard or focus too much on doing so.’ We’ll look more at the importance of side-effect living in the next chapter. \* In George Lakoff and Mark Johnson’s landmark book, *Metaphors We Live By*, they do a wonderful job of explaining the importance of transjectivity in how we live in worlds constructed by language, and specifically metaphor: > What the myths of objectivism and subjectivism both miss is the way we understand the world through our interactions with it. What objectivism misses is the fact understanding, and therefore truth, is necessarily relative to our cultural conceptual systems and that it cannot be framed in any absolute or neutral conceptual system. Objectivism also misses the fact that human conceptual systems are metaphorical in nature and involve an imaginative understanding of one kind of thing in terms of another. What subjectivism specifically misses is that our understanding, even our most imaginative understanding, is given in terms of a conceptual system that is grounded in our successful functioning in our physical and cultural environments. Which is to say meaning cannot be separated from those that experience it, and the context in which they experience it. That context is constructed by language, and the metaphors that give that language structure – our collective system of understanding one thing in terms of another, for example relationships as journeys (‘it isn’t going anywhere’). Communication, as Lakoff and Johnson wrote, is a participatory, culturally contextual act: ‘sentences do not have inherent, objectively given meanings, and communication cannot be merely the transmission of such meanings.’ The inescapable conclusion of how we exist in a world shaped by metaphor is the same as that that emerges when you really know your relationship with money on all four levels: much as we may treat language, or money, as some sort of isolated, objective, thing that we dip into as necessary to facilitate life, this isn’t how it works. They are part of life: they both express and shape who we are. In the words of Lakoff and Johnson: ‘you cannot function within the environment without changing it or being changed by it.’ The upshot of this is that you cannot improve the role of money in your life by seeking to improve it in some sort of ‘objective’ way. ## **Rewarding retirement** ***No one wants to ‘retire’. Discovering the underlying emotional rewards masked by the label of ‘retirement’ can save people from blindly sacrificing sources of meaning*** Retirement, we saw earlier, is a terrible goal. \[11] But, being both a terrible goal and a popular one, it’s a great example of how a clearer appreciation of underlying emotional rewards can lead to better life choices. I explored this one day with a client we’ll call Hugh. I’d not met him before, but his adviser of many years graciously let me sit in. Of all the fascinating facets of the lives of the wealthy folk I’ve known, one question stood out: what kept so many working when they didn’t need to? It wasn’t like these people loved their jobs. Some, it is true, didn’t fully appreciate that they didn’t need to earn another penny from their time, so likely were their investments to earn what they needed for them (though this was still no great excuse to not bother doing the maths). But Hugh, like Nigel we met earlier, was not one of these. Hugh knew that his insurance business had already provided him with enough savings to live on, before considering its potential sale, his huge pension pot, or even that his death’s-door dad was twice as wealthy again. Each time Hugh came in, however – always a flying visit between the sort of demands on his time he’d allegedly set up a business to be more in control of – he spent most of the meeting complaining about work and all the other things it was preventing him from doing. So why bother continuing? What did work give back that made it worthwhile? Comparing something to nothing is harder than comparing something to something similar. So for starters, if being self-employed hadn’t provided the anticipated control over his time because the nature of the business meant his clients were still calling the shots, did he still prefer it to being an employee; and if so, what did he prefer the most? After some stumbling and mumbling indicative of never having asked himself that question, it transpired it was how people treated him when we has the boss. Something about respect and relevance and the other classic stuff that when retirement robs people of it they end up unexpectedly deflated, having been unaware of how much it had filled them up in the first place. Business-minded men and women are great at succession planning to replace what they did for their work, but not for what their work did for them. ‘Is there anything else you do that inspires the same feelings?’ I asked Hugh. He took his time, which wasn’t something that came easily to a chap prepared for a quick update on his investments, not amateur career counselling. To Hugh, he made the money, and we, as far as investments at least, told him what to do with it. It wasn’t the place of someone he’d never met before to ask about his life outside the suit. Asking such questions is always fraught with rear-view-mirror danger. It’s telling how many respond defensively, as if they are being attacked with the suggestion that they’ve been living the consequences of some poor life choices for the last few decades… even though that suggestion only comes from themselves. This danger only grows when someone’s expecting unqualified praise for their unquestioned “success”. It’s hard for something to feel unquestioned when you’re being asked questions about alternatives. When I’d asked Hugh how he’d got into his career, how he’d transitioned to going it alone, or his plans for the future, he couldn’t wait to tell me. Yet when I asked him what it continued to add to his life, he reacted, as so many do, as if I’d insulted his mother’s virtue or the way he’d chosen to raise his children… he obviously didn’t care more about the appearance of objective success in his job more than the reality of subjective success in his life… but he did act like it. Why? ‘Actually,’ replied Hugh, ‘I’d not thought about it in those terms, but yes… I get a similar buzz from my role in the hockey club, albeit I wear a tracksuit rather than this thing,’ he said smoothing down his lapels while silently screaming for me to notice the cut. ‘Hockey’s a lot less hassle. Though of course it’s a lot less money too. Are you telling me to quit and become a hockey coach?’ ‘Haha. No. Whereas on the one hand, if you are thinking of quitting your job, the science is quite clear that you should, advice that jumps to “quit your job” – as opposed to “ask yourself these questions about your career” – is less advice and more a projection of someone else’s prejudices. Being aware of what it is about a job that you like, what alternative sources you have for those things, and whether the job is, all things considered, still the best use of your time and energy to get them, is far more important than “quit or don’t quit”.’ Just as we’re blinded by salespeople to see the alternatives to one house or holiday being only a different house or a different holiday, we’re blinded by the monetary rewards of a job to the extent that even when we do consider the other ways what we do with the majority of our waking life actually contributes to that life, these considerations are secondary… even when – and sometimes especially when – the money is likely to prove of interest only to the inheritance-tax collector. Dreams of retirement can turn into nightmares when we view the expenditure of time leading up to retirement in price, rather than value, terms – i.e. when we prioritise the world’s judgment of our time and energy based on its demand and supply over and above our judgment of it, based on whatever needs it is meeting, and how well it’s meeting them. Once again, a fixation on the fixity of price shuts down the very thinking that enables us to make better life choices. It also makes us forget that we are coalitions of competing and conflicting stories. The importance of seeing our ‘self’ as our centre of narrative gravity\[12] lies less in the simple fact that your life is constructed as a story, and more in the fact that your brain is constantly spinning a thousand draft stories, and continually reconstructing and reconfiguring the ‘one’ it settles on each moment as the best representation of ‘who’ ‘you’ ‘are’. Our memories are focused not on the past, but the future: which narrative of past events best sets me up to deal with future ones?\[xii] The point, if there is one, seems to be that fulfilment of potential outranks a mere feeling of fulfilment. Living in price world (whether it relates to what one does to earn money, or how they spend it) is to chase *having* ‘fulfilment’. Living in value world is to focus instead on *becoming* what one has the potential to become. To remember this is to stop grasping for the ‘one true path’ – and then becoming so attached to it that it becomes almost impossible to consider alternatives, let alone pursue them, however potentially beneficial it would be to do so. \* Work provides many things we want from life, like respect, and relevance, and belonging. But not all work is created equal. Just because work can provide meaning, it doesn’t mean it does, or that one type of work does it as well as the next. The value of a job is a coalition of need-fulfilment opportunities; it’s a complex web of trade-offs made for and by a complex changing human. The conundrum of retirement is that we’re led to believe retirement (or ‘making working optional’) is a universally desirable long-term goal, but because we view it in numbers terms (because we don’t analyse the coalition) when that goal is ‘won’, all-too-many find that the victory was terribly – and sometimes tragically – Pyrrhic. Failure to make the most of an opportunity that’s open only to a tiny proportion of people for an even tinier sliver of time is a distinctly first-world problem.\[13] However, that doesn’t diminish the value of the analysis. Because ‘retirement’ remains a crappy goal. The person that discovers how to derive daily Goodness from a means of providing objective value to the world in a way the world is happy to reward them for will always be doing better than a retiree who was blinded by price both on the way up and on the way back down. \* When we know what reward we’re really after, we can take a closer look at whether the way we’ve chosen to get it is the best way. Just as it is daft to spend more resources for the same output (be that efficiency of movement, business operations, or living a Good Life), it’s daft to dedicate one’s working time to rewards that could be reaped with a more effective routine. As Morgan Housel wrote about stuff, but which could apply equally to jobs: > Almost no one actually enjoys flaunting expensive stuff. What they enjoy is the respect and admiration that they assume flaunting expensive stuff will bring them. And they're often wrong about it. Humility may bring you more respect than vanity, but it's so hard to accept that. A job choice, like an expenditure choice, is a way of shaping and expressing an identity, of meeting a need, of getting an emotional reward; it’s just a more complex one. {% content-ref url="/pages/-Md66taUCWNJcB6riaq2" %} [2.2.3.4: Selling style over substance](/the-book/2/2.2/2.2.3/2.2.3.4-selling-style-over-substance) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \-- \[1] Part 1, Section 2.2.1. \[2] Part 1, Section 2.1.2. \[3] Recall too ‘How not to buy experiences’ from Part 2, Section 2.1.2. \[4] Part 1, Section 3.3. \[5] As per Part 1, Section 3.4. \[6] Part 1, Section 3.2. \[7] Very deliberate phrasing. \[8] Part 1, Section 2.4, ‘Do you see money through the eyes of a child, an adult, or a sage?’ \[9] Part 1, Section 4.4, ‘How does money fit into meditation?’ \[10] ‘Even if basketball, removed or abstracted from its now established place in our culture, is not an objectively valuable activity in itself, it provides an opportunity for much that is of value…’ \[11] Part 1, Section 1.2. \[12] Part 1, Section 1.2, ‘Who or what is your ‘self’?’ \[13] Recall that the typical retirement age has been meaningfully lower than life expectancy for barely a handful of decades, and that the vast majority of people have next to nothing in retirement savings. \-- \[i] Mark Manson, ‘5 Steps to Becoming Insanely, Spectacularly, Wildly Successful… or Whatever’ \[ii] Lavinia Gomez, *Object Relations* \[iii] Bertrand Russell, *The Conquest of Happiness* \[iv] Alain de Botton, TED talk \[v] Rory Sutherland, *Alchemy* \[vi] Susan Wolf, *Meaning in Life and Why it Matters* \[vii] Susan Wolf, *Meaning in Life and Why it Matters* \[viii] Carl Jung, *The Undiscovered Self* \[ix] H.L. Mencken, *On Religion* \[x] John Vervaeke, *Awakening from the Meaning Crisis, ep. 31* \[xi] John Vervaeke, *Awakening from the Meaning Crisis, ep. 38* \[xii] See Tomaso Vecchi and Daniele Gatti, *Memory as Prediction* # 2.2.3.4: Selling style over substance Advisers, being humans, also tend to overweight price and overlook value ## **Welcome to Price World, population: nearly everyone** ***Advisers are in the best place, but the worst position, to help improve your relationship with money*** If you ever meet a financial adviser, ask them who their best client is. Almost every single one will tell you not the client they get on best with, nor the one with the most interesting challenges to solve, but the one that pays them the biggest fee. They may use ‘favourite’ for the one that brings them the most all-round joy, but they reserve ‘best’ for the money. As we’ll see in Part Four, this is partly because the typical advisory charging model dictates that ultimately the ‘client’ in the adviser-client relationship is not with a human, but with the money that human has. More generally, it is because advisers, as we’ve already seen in numerous places, are the most prone to the monetary self-deceptions that plague us all. Not only do they live in Price World, they’re Guardians of it. I argue throughout this book that financial advisers are in the best (physical) place to help us improve our relationships with money, but are in the worst (mental) position to do so. They are automatically placed to provide an outside view of transactions and mindsets. To share the stories of what worked and what didn’t (in a wide narrative, rather than a narrow numbers, sense) for others in similar positions. To help us focus on long-term alignment in the face of the addictive tendencies of short-term accumulation. To coach the consciousness of our choices. Sometimes even to save us from our own idiotic insistence by restricting the release of funds that are heading straight for the furnace. However, for reasons we’ll explore in detail in Part Four, this almost never happens. In fact, the opposite often does. The poor philosophical position of most advisers is a dense web woven of the history of the industry and the type of characters it was set-up to attract. It is expressed in the questions typical advisers ask, the reports they present, and – of course – how the whole circus is paid for. We’ll get to all of that later. What unites it all is that financial advice has long been an industry built on selling certainty. It’s an industry that saw scared humans’ desperate grasping for ‘financial security’\[1] and exploited the shit out of it. It saw a bunch of people that wanted an ‘answer’ and were willing to pay anything for it, and gave them a means of doing so. It even made it look ‘free’, despite being the biggest expense of most people’s lives. It found itself in the perfect place to take the time to explain to people that price tags were an irrelevant symbol of an unwinnable game, but because the people in that place had dollar signs for eyeballs, they could see only the chance to coach people to keep playing. The industry didn’t make the rules of this game, but it guards them like its life depends on it… because of course in its current form it absolutely does. The industry could focus on value. It often uses the word. But it’s so caught up in calculations, it doesn’t seem to understand what it means. A typical client’s ‘I want this’ isn’t met with a friendly, life-affirming check that they really do, rather than simply believe they do, but a jumping to whether they can ‘afford’ it – in the narrow-minded monetary sense. It doesn’t encourage an examination of the opportunity costs of the trade, and whether there are good grounds for thinking it’ll make life sustainably better; it says instead ‘Go for it! Let me put you in touch with my car/yacht/mansion guy! Associate me with this having-inspired spike in short-term feelings’, safe in the knowledge that when it’s been adapted to, no blame will be acknowledged, let alone assigned, for what could have been won instead. ## **Waste management** ***If you want help turning money into life, don’t ask for advice from people that specialise in turning life into money*** ### To want money to not have to think about money is mad One of the main motivations for making a ton of money is to not have to think about money. This is moronic. Because failing to think about money is a guaranteed way to waste it. Were you to build an industry around people’s desperate grasping for existential certainty, it would look a lot like the market for typical financial advice. We’ll go into this in more detail in Part Four. For now, recall from the Introduction, our self-deceptive and self-destructive, but by no means unimportant or unreal, flicking between a fixation on fixity and a dash towards distraction. You can’t really blame the industry for pandering to these rather than challenging them. Because fixation and distraction are easier to sell, the people selling them are as fixated and distracted as anyone, and preaching about others’ moral stances is more likely to backfire than benefit anyone. It would therefore be silly to get cross about this. Fortunes have been made and crimes have been committed in the name of giving people what they believe they want, from exploitative scams to Dan Brown novels. Here is not the place to criticise either. But it is the place to try to see more clearly what leads us, not to be exploited, but to the position where we’re so prone to be so – to the extent of paying enormous sums for the privilege. Life, of course, is impermanent. No amount of wishing harder or buying snake-oil stops that being true. What we do when we buy advice that tells us we can pretend otherwise is we remove the human – the reality – from the equation, so we can ‘solve’ it. The manifestations of this can be subtle, especially as the typical adviser’s promotional material proudly proclaims their service is centred on you, the human. One practical example is use of the word ‘afford’. ### Affording idiocy People are wont to use ‘because I can afford it’ as the justification for any purchase. Advisers are wont to pride themselves on telling clients they can ‘afford’ something, thus opening them up to experiences that enhance the quality of their lives. People, even those with millions, are often so fearful of running out of money, that they deny themselves things, even when they’re pretty darn sure those things will make their lives better. These ‘things’ could be material goods, or quitting a crappy job that someone continues to go to only because of the high salary. This is a valuable service. However, it’s also fraught with danger. Because more often than not, to hear ‘because I \[or you] can afford it’ is to hear somebody choose becoming dumber over becoming wiser. The ability to afford something is not a valid input into a decision-making process. If a purchase needs to be ‘justified’ by how small a dent it would make in your bank account, that’s probably a sign that you’re being influenced by something not entirely wise. 'Because I *can’t* afford it' can be a valid input. You can consciously conclude that something would add value to your life, but if it put a greater source of value in jeopardy, it’d still be dumb. The ratio of the monetary cost of something to the cash in your bank account is relevant only to rule something out, not to rule it in. Where an adviser persuading a client they can afford something is helpful, what’s being said is not: ‘So what, you can afford it’, but: ‘You believe you can’t afford this thing which you’ve consciously determined will very likely make your life better, and I am providing evidence to dispel that erroneous belief.’ The first isn’t dispelling a false belief, it’s enforcing different ones – that more is always better, and that if something is expensive, it must be worth having, no life-examination required. Commonly, having cash to cover a cost shuts down our decision-making machinery. Lack of thought leads not to transforming our resources into a Good Life, but into wasting them on white sofas and publicising our insecurities. Every expenditure is a sacrifice of an opportunity to level-up your life, so if you’re not levelling-up or learning, you’re pissing away potential. Going into ‘fuck-it’ mode and buying something because you can is simpler than contemplating the money, time, and energy spent, and the foregone everything else you could’ve spent it on, but ‘fuck-it’ mode is fucking stupid. Because it forgets the only thing that’s important: whether something will add to your life, rather than detract (or distract) from it. This is an all-too-common problem – of both making money and spending it on stuff to justify the sacrifices made to make it. To pursue money so you don’t have to think about it is to believe that being able to spend blindly without going broke is a better aim than using your money to improve your life. And it’s to believe that the value of money to your life is about ability, rather than responsibility. How you spend your money is an expression of the thoughts that shape who you are. To delegate those thoughts is to surrender your resources, to live someone else’s life, while wasting your own. Aiming for unconsciousness is an unwise way to ‘live’. Having more money expands the universe of what you can do with it. But this is a burden, not a benefit if you have no sodding clue how to use it well to start with. If financial planning taught me anything, it’s that people are phenomenally bad at using money to level-up their lives. The only difference with the rich is that they prove it in more publicly hilarious ways. ### Rich pickings There is a pervasive belief that being rich somehow excuses you from the reality that if you don’t spend your resources with care, you’ve left the Goodness of your life up to luck rather than judgment. Don’t worry about what you want! Buy everything, and you’ll have it covered! Yet the contrary has to be true. Because we do not live limitless lives. And when we’re stuck in the having mode, piling up stuff is likely to get in the way of the meaningful experiences that we are ultimately buying that stuff for. Recall how the ownership fallacy leads people to privatise the experiences they enjoy, despite a large part of the enjoyment coming from their public nature. Those with the most ability to turn resources into a Good Life have the most responsibility to do so. They provide the biggest opportunity for leveraging the value of better decisions. In some ways, the rich even have it harder… not only are there more things they could’ve done with the money instead (so if you don’t start from understanding what you really want, you only end up getting more and more distracted from ever finding out) but if you attribute value expectations to price tags, then you’re more likely to be disappointed (‘I paid X for this, so it better be good’). And then there’s the niggle. The niggle that gnaws at everyone who’s ever been in the position of ‘having everything’ and who wonders why something inside them is still saying ‘there must be more to life than this’. The niggle that can only be numbed with more work, or more wine. I've seen this niggle so very often, across clients who've made a ton of money for basically being in the right place at the right time (usually variations on a theme of the typical Oxbridge career conveyor belt where you’re paid in the top 1% of US or UK salaries – let alone global ones – for sitting at a desk for 50-100 hours a week and sustaining a system that says your lawyering or your banking or your consulting is worth whatever you can get away with charging for it). Even if they never say it out loud, it's always there... the niggle from the death-throe wiggle of the human that exists beyond the suit and the desk and the reports, trying to squeeze out a reminder of the responsibility to do something with this luck. This luck isn’t just about money. It’s about knowledge acquired, connections made, and understanding unconsciously nurtured of how one corrupt corner of the world works. Those that deliver investment advice have as much interest in sustaining this system as anyone. As we’ll look at more in Part Four, there would be a revolution in financial advice if more people – especially more rich people – stepped out of the having-mode, numbers-obsessed system. In the meantime, the pressure of built-up niggles have forced a growing number of advisers into playing amateur therapist. And many do a fine job of it. But more often than not it is the therapy of the modern-day ‘stoic’ – less an attempt at enlightenment, and of addressing the niggle, and more a comforting speech aimed at justifying the hoarding, and the sacrifices made to enable it, and that concludes the niggle is nothing to be worried about, that it comes with the territory, and you should just go on holiday, or build an extension, and forget all about it. That, in short, is still stuck acting as if the money were in charge, still stuck judging worth by waste. Yet more money wasted on the sort of stuff that doesn’t make a damn bit of difference, because it’s been blindly bought, isn’t only a problem for the world, it’s a problem for the waster… whether they can ‘afford’ it or not. To tackle this, we need to consider a different meaning of ‘afford’. ### Affording wisdom There’s another meaning of the word ‘afford’, most commonly used in psychological settings, and in the form of ‘affordance’. ‘Affordance’ was coined by American psychologist James J. Gibson, who described it as follows: > The affordances of the environment are what it offers the animal, what it provides or furnishes, either for good or ill. The verb to afford is found in the dictionary, the noun affordance is not. I have made it up. I mean by it something that refers to both the environment and the animal in a way that no existing term does. It implies the complementarity of the animal and the environment.\[i] Affordance refers to the way in which an environment encourages a relationship between object and subject. Recall the discussion of transjectivity, and its role in meaning-making above. A door handle, for example, affords you the chance to open a door. It is pretty obvious why it is there, and why it’s shaped the way it is. On its own, as an isolated part of an environment, it does nothing, but in interaction with a human, its purpose becomes clear. In the words of John Vervaeke: ‘You don’t really see colours and shapes, you see affordances.’\[ii] Is there ‘redness’, for example, without a human eye to perceive it, and a human society, to label it ‘redness’, and give ‘redness’ a use, a purpose? The concept of ‘redness’ exists in a relationship of co-ordination between subject and object. In like manner, a baton is ‘graspable’, say, only when there is a thing that functions as a grasper. And a thing can function as a grasper only when there are things that present themselves to be grasped. This applies not only to tangible objects, but also to concepts. And indeed it’s at the core of what our whole journey is about – seeing more clearly, and using our relationship with money to enhance our meaning-making ability. The idea of ‘budgeting’ for example, when done properly,\[2] begins as a means for examining life choices, but it’s ultimately about using our interactions with money as a tool for seeing more clearly – by presenting us with an accounting record of our chosen trade-offs, we become aware of what is most salient to us. What, through the lens of our current worldview, stands out to us. What this worldview has led us to deem significant. Recall how the job of an unscrupulous salesperson is, in the context of a particular purchase, to narrow your worldview. To reduce your consciousness to a question of ‘Can I afford this?’, without even a ‘Do I want this?’ to go with it. We exist in a world where wants are a given, an unchallenged irrelevance, at best, so well manipulated are they by external forces. This is the world in microcosm. Zoom out from the object of the salesperson’s focus, to price tags in general. To an unchallenged primacy of ‘more’. To the very latticework of language that forms the framework that shapes your relationship with money, and the stage on which your relationship with money is performed. Using ‘I can afford this’ as an input into a decision-making process is idiocy. Using money as a means, not of affording stuff in a monetary sense, but of seeing more clearly your opportunities for making meaning as you move through your environment, of examining, and re-examining significance, and seeing most saliently those things that you deep down want to want, is wiser. We want to align what we care about outside of us with what we care about inside of us. We want to be subjectively attracted to objectively attractive things. We want to (again borrowing from Vervaeke) realise (in the sense both of becoming aware of, and of making real) what is relevant, To do this, we need to care about the conditions that afford the most meaningful things presenting themselves to us, and of us being in a position to grasp them. \* The cultivation of a worldview that affords this sort of relationship with money is at odds with the typical approach of the advisory industry… even those sections of it that are getting increasingly good at remembering that their client is a human. Because even they still, unconsciously and with zero ill-intention, are acting in a world that measures meaning in monetary terms, that sees what the bank balance can afford, not what the human’s relationship with its environment can. ## **Investment management: you get what you don’t pay for** ***Investment management is the worst possible place to judge value by a price tag*** Investment management is perhaps the best (or the worst) example of the unrelatedness of price and value. Ignoring those aspects of the advisory industry that are more to do with invest*or* management, the invest*ment* management bit has one clear goal: to turn money into more money. Paying more, instantly and undeniably, works against this goal. By itself, this doesn’t make expensive investment managers bad. But it does mean they need to prove their worth – to end up ahead net of their fees. If they didn’t, the demand for them would fall (or so you’d hope) and so, consequently, would their price. Because the fee comes first, and indeed is taken even when performance is negative, all investor returns are leftovers. So if your investment manager is either useless or greedy, you are most likely going hungry. An immediate objection may be that no one picks an investment fund *because* it’s the most expensive, in the way people with no imagination or introspective capacity buy the most expensive house, holiday, or hockey stick. However, that doesn’t mean it doesn’t happen by proxy. Because if you ignore costs completely (as most investors evidently do, be it via a professional, or in their personal pension choices) you break the usually reliable link between lower price and higher demand and distort the market towards the more expensive funds. The supply-and-demand price mechanism gets so distorted in investment-management for several reasons:\[3] * Fees quoted in percentages – This means they look tiny, aren’t easily compared with each other in the context of how much they actually cost to an individual, and the compounding chasm between two prices is overlooked. * Branding – When the majority don’t have a clue what to base their decisions on, they’re more likely to use branding as a proxy for value. Advertising doesn’t come for free, but its costs are largely passed on to those on whom it works. * Belief – We like to believe in superstars that we can back to ‘win’. Even armed with all the evidence in the world, there’s no persuading some people that the sky-high wages paid to investment pickers are a total waste of money.\[4] * Long-term judgment – The quality of an investment decision should be judged against the term of an investment… i.e. at least a decade, preferably several. This is difficult.\[5] With tangible goods that are meant to last as long, it’s usually easier to see signs that they’re ‘built to last’. Investments don’t have these signs. Which is why you need to trust a philosophy first and foremost. * Past performance does not equal future performance – Everybody’s heard it, everybody’s clicked the button to say they understand the Ts and Cs in which it’s written. Everybody completely ignores it and makes it the primary influencer of their investment decisions anyway. Money that chases performance catches only disappointment. It’s a psychologically fuelled bubble-making machine. * Luck – Most of the investment-picking industry is about predicting what’s going to happen, and then inventing plausible-sounding-but-bullshit explanations for why it didn’t, while taking credit for everything going up around them. If fund returns were entirely down to luck, it would look an awful lot like it looks in reality, bar the 1% or so at the top that look like they’ve actually got some skill. But as you can’t reliably find those 1%, they’re a practical irrelevance. There’s a still more fundamental way in which the system is broken. Ignoring those that would pay for branding to brag about (because if you’re really bragging about the branding of your investments, you’ve got bigger issues than if it’s making any money, and you’re almost certainly beyond help), paying money to make more money should be the most commoditised market in the world. When you’re paying for ‘more money’, there is no need for product differentiation and diversification. For a commodity market to function effectively, the costs and benefits need to be obvious. In investment management, neither is. The costs may look obvious – they’re right there on the factsheet you didn’t read – but they’re not. There are a ton of other costs that also play a part but aren’t disclosed, some of which can’t be more than guessed at anyway, and even then only with an amount of homework literally no one is going to bother to do. Costs can easily double without you knowing it. Add on an unscrupulous adviser, and before you know it you’re paying 10 times more than necessary. In my experience, anyone with more than a few million invested is probably paying more on the unnecessarily convoluted ‘management’ of those investments than they spend on everything else put together, each and every year… without realising. Some even think that the management is ‘free’ because it’s somehow paid by the investments themselves. If these people were to project forward the difference in final portfolio amounts a couple of decades down the line, they’d definitely weep, and may even turn murderous. The benefits aren’t obvious either. And not only because – as above – you need multiple decades to judge performance (and even then there’s no guarantee it was a smart call as opposed to dumb luck). Let’s assume that it’s possible to know if you made the right investment call based on the monetary performance. How do you know? It won’t be only that ‘it’s gone up’. What if everything else went up more? It won’t be that it went up in relative, rather than absolute terms. What if you put it all into lottery tickets, and happened to get lucky? No one uses lottery tickets specifically as benchmarks, but they do often use things that may as well be lottery tickets… the start-up that actually made it from among the millions that didn’t, say. More commonly, part of the endurance of an industry that’s been proven time and again to be paid extraordinary sums for being actively bad at its job is explained by people using bad benchmarks to assess their value. We’ll dig into this in more detail in Part Three, but one immediately relevant aspect is people’s propensity to deem an investment good value if it went up, relative to what would have happened if they’d stayed in cash, rather than another investment, say the cheapest and administratively simplest one available. If someone fails to compare to the cheapest and administratively simplest alternative, it is because they have a mental block around investing in general being complicated and scary – which you may recall was the starting point for this whole book. The cure for this isn’t a clearer explanation of unnecessarily complicated products or the processes of stock pickers, it’s learning to see more clearly. Unnecessarily expensive is always silly, but for a product where the aim is to make more money, giving some of that money away to no end is idiotic… yet it’s the raison d'être of (almost) the entire investment management industry. {% content-ref url="/pages/-Md66qdg7knjhVzUrSGx" %} [2.2.3.5: Putting a price on real value](/the-book/2/2.2/2.2.3/2.2.3.5-putting-a-price-on-real-value) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \-- \[1] Or ‘financial freedom’, which, in the way it’s meant in this context usually amounts to the same thing, even if the person saying it is adamantly blind to the difference. We’ll look at why in Part 3, Section 2.1. \[2] See [Part 2, Section 2.1.3](/the-book/2/2.1/2.1.3) \[3] All of which, of course, are countered by seeing more clearly. \[4] It’s likely part of the unwillingness to let go of this belief is because of what removing that link between self-worth and net-worth or salary, or salary and intelligence, etc. would do the set of beliefs that support the world in which so many people live. More on this in [Part 2, Chapter 4](/the-book/2/2.4). \[5] More so, probably, because people don’t know much about investing… so they’re prone to look at performance way too often after the initial investment. \-- \[i] James J. Gibson, *The Ecological Approach to Visual Perception* \[ii] John Vervaeke, *Awakening from the Meaning Crisis, ep. 10* # 2.2.3.5: Putting a price on real value Price signals saturate your vision, but value is what you see when you see clearly ## **Banquets, balls, baby clothes, and bedrooms** ***Price is a proxy for value in certain conditions… these are far rarer than we believe*** Things that cost a lot are crappy substitutes for things that mean a lot. But as long as we see external prices more clearly than internal benefits, the con will continue to consume resources for no reward. Here are four short stories that demonstrate this. ### Banquets I’m dining in a private room in one of the swankiest restaurants in London. Around me, the thick scent of leather and mahogany. In front of me, food both delicate and demanding of reverence; each of the seven courses dances on the tastebuds with a commanding balletic grace. The same cannot be said of my dining companions. At least they’re paying. And at least I get to claim two hours of Continuing Professional Development points, which’ll save me pretending to have learnt about investments some other way later on. The food’s not really free, of course. Nor is it really being paid for by the designated driver of the company card. It’s sponsored by the investors in the fund whose managers are trying to sell said fund to my firm. And of course the vampiric ability of fund managers to suck the time out of me and the life out of that time ensures I’m paying in other ways, foolishly unaccounted for when accepting the invitation to a ‘free’ feed. The empty suits the fund-management firm has plucked off the conveyor belt are talking about the size of the fund, the manager’s track record, and other stuff with zero bearing on the likely future performance of the investments. Past performance is no guarantee of future performance, and the quality of a chap’s tailor and public-school debate coach are no guarantee of the quality of his ability to guess what’s going to happen to a company’s share price relative to what the rest of the world thinks is going to happen to it. They know this. They know I know this. They also know that I can’t just add their funds to our portfolios even if I wanted to. The empty suits don’t care. They’re zombies: ‘both insatiable and insubstantial, everything they eat seems to go straight through them’.\[i] They’re a living metaphor for how our desperate search for security is continually crushed by the foolish belief that psychological needs can be met by material consumption. They’re here because they can be and because one of their KPIs is meetings with advisers, however pointless. Their investors are wasting money paying them; there’s little harm in wasting it in return. Not that the food isn’t great. I love a bit of Michelin-graded grub as much as the next man. Actually, the next man is Steve, a colleague with a penchant for Pizza Express and a mystifying tendency to order his steaks well-done. I love it more than him. One of the best evenings I ever had involved dining in a truly terrible restaurant. The company was good, so it didn’t matter. Crucially, the evening wouldn’t’ve been any better – it wouldn’t’ve added anything more to the Goodness of my life – if it had been somewhere ten times the price. Good meals with terrible company are better than bad meals with terrible company. This does not mean seek out good meals over bad ones (which would assume the terribleness of the company somehow had to be taken as given). It means seek out good company. When the company is good enough, as long as you’re not being poisoned, the only thing that correlates with the price of whatever you’re consuming is your inability to do other stuff with it. Recall that standard of living does not equal cost of living and quality of life does not equal access to comfort. There are people who spend fortunes every year on eating out, without it adding anything to their quality of life. We know this just as we know polo isn’t ‘better’ than pool – and yet most of us forget it the second someone dangles a ‘free’ £100-a-head meal in front of our maladjusted maws. I did. Price is a proxy for value where the thing you’re buying isn’t interacting in any meaningful way with your humanity. Dining with fellow humans does not fall into this category. Nothing you consume is a substitute for anything you connect with. Where the human connection you are ultimately seeking exists, costly consumables are irrelevant to your enjoyment of an experience. To be inside the heads and bank statements of the rich is to confirm beyond doubt that just because you can, it doesn't mean you should. Selling ourselves to crappy but expensive substitutes is a recurring consequence of our self-deceptive tendencies. We blindly rush to meet needs with stuff we’re promised will work, but never does… but because we’re deceiving ourselves, we fail to connect our blindness to our failure to find fulfilment, and so don’t do the work required to bugger it up a bit less next time. The process of finding fulfilment can feel frustrating, flummoxing, and just too damn fluctuating. But the flux is inevitable, so it’s a crap excuse for grabbing at substitutes that promise solidity, while delivering only decay. ### Balls Where there is no real interaction with the narrative of your existence, an important difference in quality, and it’s obvious you get what you pay for, using price as a proxy is a much safer move. For example, cricket balls. There are only a handful of manufacturers of cricket balls, each of whom make a range of balls at different price points. While different companies’ balls do have certain differentiating characteristics, they only really matter at the very top end. For non-professional players, the branding is borderline irrelevant. Selecting a ball is not simply a matter of choosing the cheapest one. Using a bad ball can be very costly, because it’s made of all sorts of crap that can break cricket bats – and bats are rather more expensive than balls. The cheapest options are usually to be avoided. But you can’t see inside cricket balls, so price is a decent guide to whether they’re full of things cricket balls should be full of, or whether they’re full of bat-breaking badness. ### Baby clothes De Beers are often credited with the greatest marketing stunt in history by linking diamonds and a punchy pricing equation to a man's love of his bride to be. For a single company, that's probably true. But as a wider industry, baby clothes takes some beating. Possibly only weddings can match it. In analysing the expenditure of a couple of potential clients one day – let’s call them Zara and James – something jumped out: the amounts spent at what Google told me was a boutique baby store on one of London’s priciest shopping streets. What on earth cost so much, I asked, not with opprobrium, but pure fascination. I am still somewhat in shock. Not at the itemisation of the bill (which was truly shocking) but at what happened next… Because with no additional prompting, Zara started to cry. The question had unlocked something that had been bubbling away for, apparently, ages. Through the tears, she explained that she knew the items were pointless. She knew they weren’t ‘better’ than alternatively branded substitutes. She knew the badge didn’t represent how much she cared for the child. And was pretty sure baby wasn’t all that bothered either. And yet she kept going back. Because she could. And what sort of reason was that? Wasn’t it weird, I wondered (but did not say out loud) that the world – both in this way, and a million other subtler ones, fit to cater for the less heavy of wallet – was wired to believe how much it spends on something is a sign of that thing's value, and only the exceptionally rare are confident enough in their love for, or at least their responsibility towards, their children, that essentially everyone ends up filling prams and spare rooms with mountains of pointless plastic crap? For lots of people, it’s like knowing the pitfalls of the price-value theory even excuses them from putting the theory into practice. If anything, things go even more screwy when we buy stuff for others. When did we get so bad at expressing our appreciation for other people without getting the accountants involved? ### Bedrooms We’ve already seen\[1] houses, despite being the biggest purchase most people will ever make, are often subject to the dumbest decision-making, starting from the very first question anyone has when shopping for one: ‘What’s your budget?’ Not, ‘What do you want?’ but ‘What’s the most expensive thing I can afford (with help from the bank)?’ To do this is of course to assume that more expensive is better. Even though the best way to get a great deal on a house is to have idiosyncratic tastes. If you value things that others don’t (which in some way everybody does, if only they’ll let themselves admit it) you get to be happier in a home that costs less. Instead, we blindly lurch for the priciest thing on the menu, and remain ignorant to the possibility that we could have had all our wants met with a side-order of retiring 20 years earlier, or having the freedom to move into more fulfilling work, if the opportunity arose, and a host of other incredibly valuable things aside. As I wrote above: > Houses are especially complex because a single object is used to meet myriad needs. \[…] We’ve trained ourselves to unthinkingly reduce everything to a number, so we instinctively collapse inescapably complex decisions into simplistic shortcuts to mistaken conclusions. \[…] There’s often a fine line between stuff that says something important about oneself and stuff that says, crudely, ‘look at what I can afford’. We attach ourselves so enthusiastically to the latter that we’re prepared to not only spend all our resources on it, but to borrow some more and make a leveraged all-in bet on it too. And as Rory Sutherland wrote elsewhere: > Logic would suggest that, as house prices in London continue to rise, many Londoners who do not need to live in the city would decide to buy houses further away, gaining from price rises and relaxing the pressure on the market. In reality it seems the opposite happens: when sitting on a rising asset, people who would secretly prefer to move 50 or 200 miles away from London are reluctant to, for fear either that they will miss out on future price increases or that, once they leave, they will be unable to afford to move back again.\[ii] The possibility of maybe one day wanting to move back cannot be completely discounted, but if you’d definitely prefer to move out now, then it’s weird to give priority to something that may well never happen. Pointing and laughing at this is one thing: these people forget that life is about living, not waiting, that ‘here and now’ is the only time we ever get to experience, that when is this situation not going to be true, so when are they actually going to prioritise their priorities… and so on. But if we’re going to do anything about it, and avoid making such dumb mistakes ourselves, we’ve got to understand why we make them in the first place. We make them because we live in Price World. Unsure of our own priorities, rather than work out what they are, learn how to see more clearly, and make wiser trades, we take our cues from supposedly ‘objective’ substitutes. But unless we’re buying cricket balls, all this does is deny our humanity, and waste our lives. ## **Welcome to Valueville, population: nearly no one** ***Put price in its place: it’s a facilitator of trade, not a guide to the good life*** In this section, I’ve argued that price, as a function of the world’s supply and demand of something, is irrelevant to determining how much something is worth to you, in terms of how likely it is to make your life any better, and what is worth trading to make that happen. I’ve argued that using price as a proxy for value is idiotic, and, by virtue of the self-deceptive and self-destructive manner in which we do it, dangerously so. Not everyone agrees with this. Investment author Daniel Crosby argues that: ‘This tendency to conflate price with quality may lead us to overpay for clothing, cars or coffee, but is overall fairly harmless in terms of our retail purchases.’\[iii] This holds only for a view of the world so narrow that it becomes inhuman. Those retail purchases are both shapers and expressions of a life. To see them as harmless is akin to seeing the odd racist comment or slightly authoritarian law change as harmless. The biggest dangers are always the ones that creep up on us, because we can respond, but don’t until it’s too late. Before we know it, we’re taking a pineapple for a walk. Every time you act upon the belief that the price to the world is a fair proxy for the value to you, you wire yourself to see life through an unhelpful lens. Each action, each thought, is a vote for an unexamined life. To focus on value, by contrast, is to force an examination and evaluation of the underlying emotional rewards being sought. The problem is not the unworn clothes in the closet, but the unworn paths in your mind that shape your understanding of yourself, others, the world, and how they all fit and flow together. All these self-deceptive substitutes add up to a self-destructive life… constantly trying the same thing to ease the same worries, and solve the same problems, all the while not noticing that they are the same. To waste your money, time, and energy is to waste your life. Regardless of the size of those resources, you have only one life in which to use them. To default to owning everything, ‘just in case’, to cover all bases, is not to guarantee Goodness, it’s to dilute it. They’re taking up space for a limited number of self-expressive experiences, the average quality of which determine the quality of your life. The obsession with ownership votes for a world with a fixed, certain future. But however many votes you cast, this is not an election you can win… so ultimately you’re voting for dissatisfaction, and yet despite this every vote makes it more likely you’ll vote for it again next time. If that doesn’t count as madness, I’m not sure what does. We use price signals to dodge having to think, yet it is only through thinking that we can make reliably good life choices. Price is illusory value. The art of the con artist is to make the illusion appear real, by narrowing worldviews and leveraging vanity. But value is a holistic human experience. Price is an incidental snapshot. True value is in your veins, not your vanity. As Thich Nhat Hanh wrote in *The Art of Living*: > We don’t feel fulfilled in the here and now, and so we run after all kinds of things we think will make us happier. We sacrifice our life chasing after objects of craving or striving for success in our work or studies. We chase after our life’s dream and yet lose ourselves along the way. \[…] Living each moment as a way to realize our dreams, there is no difference between the end and the means.\[iv] Price is a signal, but of the market, not meaning. In subjective terms it isn’t signal, but noise. Good trades requiring reading the wine list from left to right. Of determining what you want before you determine how much you’re able to pay for it. If you make trades without knowing what you value, you’ll be in the position of a Tourette’s sufferer at an auction. Advisers, wanting to help, but not only living in Price World themselves, but acting as its guardians, often make seeing clearly harder still. They’ve read the books. They can recite the soundbites. They know the theory. But they struggle to see the subtler roots of their language that prevent them putting it into practice. Advisers, enthralled by the exotic, encourage the sort of behaviour we’ve all met at least once. The person that can’t escape telling you, or non-subtly hinting at how much something cost, even if that cost has zero bearing on the value of the experience, be it eating an Emu egg, sleeping somewhere unusual, or telling the time. If the value you attribute to something is affected by the price you paid for it, then a rich person struggles to feel as good about an experience as a poor person… their expectations are unhelpfully high, and they’ve a greater inclination to a fear of missing out on the other things that could have been subbed in for the same cost. They are more deeply stuck in having mode, unable to embrace the extra opportunity they have to become. The traditional finance answer to this is to appease it. The philosophical one is to seek to understand the story being told, challenge it, and, if it’s found wanting, change it. ‘The height of ability,’ wrote La Rochefoucauld, ‘consists in a thorough knowledge of the true value of things.’ Just as the ability to spend money comes with the responsibility to spend it wisely, so does the ability to live well come with the responsibility to focus on value amid a blizzard of price tags. ## **The only price worth paying** **Practical steps to wire yourself to focus on value, not price tags** This, like all step-by-step instructions sections, is being saved for the published version of this book. {% content-ref url="/pages/-MBTOMA2YErlemoxDnkV" %} [↓ Coming Soon ↓](/the-book/2/2.2/coming-soon) {% endcontent-ref %} {% hint style="info" %} #### I hope you found this useful. If you did, [sign up](https://www.moneyblind.net/free-wisdom) to get regular insights in your inbox. If you didn't, [sign up](https://www.moneyblind.net/free-wisdom) to get extra content as redress. {% endhint %} {% hint style="info" %} #### Have something to say? Go [here](/contents/contact). Witty comments welcomed. Insightful ones win prizes. Reading guaranteed. Replying not. {% endhint %} \-- \[1] [Part 2, Section 2.1.2](https://book.moneyblind.net/the-book/2/2.2/2.2.1/2.2.1.2#are-you-reading-the-wine-list-the-wrong-way-around), ‘Are you reading the wine list the wrong way around?’ \-- \[i] John Vervaeke, Christopher Mastropietro, and Filip Miscevi, *Zombies in Western Culture: A Twenty-First Century Crisis* \[ii] Rory Sutherland, *Alchemy* \[iii] Daniel Crosby, *The Laws of Wealth* \[iv] Thich Nhat Hanh, *The Art of Living* # ↓ Coming Soon ↓ Pages after this one have either not been written or not been uploaded. [Sign up](https://www.moneyblind.net/free-wisdom) to know when new pages are put online. # 2.2.4: All purchases are investments A Good Life relies on good trades. Good trades rely on seeing relevant costs and benefits clearly. Seeing clearly relies on a sound framework applied to the money-entwined practice of daily living. # 2.3: How You Do Anything Is How You Do Everything # Storytime: What do Blackheath people do? # 2.3.1: Beware the Arrival Fallacy # 2.3.2: Beyond needs and wants # 2.3.3: Denunciation is still attachment # 2.3.4: Take control # 2.4: All Success Is Subjective # Storytime: Hollywood Hero Learn to differentiate matters of importance from matters of circumstance – and common dreams of money and fame are all circumstances ‘We like to make people feel at home here,’ I say to Mark, as he slumps into and then shifts about in his chair. His eyes flick from phone, to window, to whiteboard, with no concern for subtlety, like a crap spy scoping out his surroundings, or a fugitive getting ready to run. Of all the clients to whom I’ve offered any sort of helping financial hand in the last few years, Mark is the one I’ve most longed to meet. From his glamorous career both on and behind the screen, to his objectively interesting close companions, to the inside story of what his wealth did to the inside of his head, he’s a fascinating fellow. Being averse to both meetings in general, and meetings in offices in particular, and now spending most of his life in America, I’ve had to be patient. Mark’s eyes scan back to his phone, then to my boss, then finally to me. He’s slowly settling from the top down. The head is now still, but the fingers continue to fidget, and I swear I can feel the floor vibrating from a thumping foot. ‘I can only assume that talking to me and’ – with a gesture towards my boss – ‘him, across a boardroom table in London is much the same as sipping cocktails under and with the stars in the Hollywood Hills…’ I don’t know Mark that well yet. The second I start to speak, I feel uncomfortably conspicuous. Creepy gossip columnist was not the look I was going for. Mark responds with an almost imperceptible eye-roll that says either he isn’t sure if I’m joking, or he knows I am, but thinks it’s a damn terrible joke. ‘Seriously,’ I stutter on, ‘you’ve been in Hollywood a few years now. The family’s settled into your dream mansion. And if meetings with moviestars are a decent metric, it sounds like “breaking America” is gaining traction, while the money’s still rolling in from your UK projects…’ Mark cuts me off. ‘It’s all circumstances,’ he says, with a sort of friendly disdain, before lurching more enthusiastically into words it feels like he’s repeated often enough to qualify as a mantra. ‘All the stuff – the house, the money, the moviestars – it’s all circumstances. Life – mine, Anna’s, the children’s – they’re really no better or worse with or without them. There’s more, er, surface-level excitement perhaps, but there’s also more time spent faffing around with, y’know, architects, builders, accountants, security people… investment people,’ he says, with a smirk. ‘As for the stars,’ he continues, ‘you can get a meeting with anyone… once. That *can* be pretty cool. But the novelty soon wears off. And if you don’t have something useful to offer them, there’s no second meeting, nor any more firsts with anyone they know. If LA teaches you anything, it’s that you can have all the money in the world, but unless you’ve got something to do with it, it’s often just a cue for wasting time.’ I know Mark is friends with a few celebrity stoics, but I’m still surprised to hear how well it’s rubbed off on him, especially given some of his life choices (and indeed how championing stoic virtues tends to be an indication of their absence). There’s a lot of mental and physical effort (not to mention money) gone in to proving his ‘just circumstances’ theory. ‘That’s great to hear. Superb, really. I’d love to record that and play it on repeat to goodness knows how many of our other clients, let alone find a way to implant such thoughts into those that sacrifice everything chasing those circumstances… I have to ask, though: how do you square such thinking with your continuing keenness to see your net worth hit the £20m mark? Especially as that mark changes with the dollar:pound exchange rate, the shifting subjective and sporadic valuation of your houses… and the knowledge you’ll blast way past it in any case when the cash from the latest show comes in.’ ‘Hah. Fair point. I guess I can’t. It’s pretty daft, I suppose. It’s something to do, I guess… and it’s definitely better than nothing. And it’s obviously a lot better than it was. You know about–‘ ‘I do,’ I say, seeing no need to dwell on past impostor-syndrome troubles, especially as I’m told he’s previously made it pretty clear that’s his therapist’s job, not my boss’s, or mine. ‘I guess there’s still a bit of that floating about… still feeling the need to wear the badges, even though I know deep down they don’t mean shit. I’m reading Alain de Botton’s *Status Anxiety* at the moment. He makes the point that however well one may grasp the nonsense at a given point, because everything – us, the world – is shifting all the time, it’s incredibly easy to fall back to the default of letting society determine our significance, consciously or otherwise, even when we know it's crap.’ I stave off the urge to both share some of my favourite quotes from that book, and recommend a thousand others in the process by asking a follow-up: ‘Is it perhaps easier to be more perspectival about the whole charade when you own all the stuff? Because you know experientially it’s [always about the narrative, not the numbers](https://book.moneyblind.net/the-book/intro#the-narrative-path-v-the-numbers-path)? Or does it make it harder because there’s so much more opportunity to add to those lingering clouds of impostor syndrome?’ ‘Neither. It’s just circumstances.’ # 2.4.1: No human is an island # 2.4.2: What are you worth? # 2.4.3: Write your own success story # 2.4.4: Be your own hero # 2.5: Inspired by Love and Guided by Knowledge # 3: How to Invest Like a Non-idiot # 3.1: All Investments are Gambles # 3.2: Your Life in Your Money and Your Money in Your Life # 3.3: The Investment Universe in a Grain of Sand # 3.4: There Is No Best Investment # 3.5: No Investment is an Island # 4: How to Get Help That's Actually Helpful # 4.1: Help! # 4.2: (Almost) All Financial Advisers are Crooks or Idiots # 4.3: Know your Enemy, and Your Friends # 4.4: Should You Hire Help or Go It Alone? # 4.5: The Future of Financial Advice # 5: How to Buy a Better Life # 5.1: Be a Financial Philosopher # 5.2: The At-Least-I-Know-I'm-Doing-Something-Right Investing Checklist # What this book is about Summary, synopsis, and bribery ## **In a sentence** It's a book about how to use the power of money for good in your life, be it spending, saving, investing, owning, thinking, or being with it**.** ## **In a bit more than a sentence** Money Blind is all the lessons I – a long-time student of philosophy and former financial psychologist to the always rich and sometimes famous – have learned about what works, and what doesn’t, when it comes to living one’s unique version of a good, flourishing, flowing, life. What leads some to fulfil their potential, while others get sucked into a Hellish abyss? What role does money play along the way? Why do we so easily succumb to our brain’s wiring, and society’s set-up to (to paraphrase Fitzgerald) *phantom chases after our own dreams shadows*? Why do platitudinal memes about there being more to life than money vastly outnumber humans that act as if they believe them? And why are those in the best position to help us do something about this so strongly incentivised to get us to shield our eyes from the monsters and double-down on the dumbness? From my privileged position of being inside the heads of the few that have what the many think they want, and drawing on the work of the wisest folk from the last few thousand years of eastern and western philosophy, clinical and behavioural psychology, neuroscience, economics, and classic literature, I know there’s a better way to think about it. And there’s no need to splash out on an expensive guide dog when you have the confidence to safely take your hands off your eyes. ## What’s in it for you? * Having a better relationship with money. * Getting your financial life sorted, sustainably, and with effortless effort. * Ensuring money is a source of comfort and confidence, not anxiety. * Freeing up time spent thinking about, and managing, money – how to manage your money (even if it's millions) in minutes per year. * Spending in a way that makes life better, not just more expensive. * Access to an insider's-eye-view deconstruction of those using money to live well and those in danger of doing the total opposite. * Reaping the rewards of investing without needing to learn anything complicated. * Telling is-good advice from looks-good advice. * Understanding why even those that say the right things still do the wrong ones and how they encourage you to blindly follow suit. * Divining the relevant investment knowledge for you, without being deceived by the veil of complexity designed to keep you scared, confused, and in the dark. * Knowing how to see if you're being ripped off by investment managers (spoiler alert: you probably are)... * ...and what to do about it (potentially giving you back more money each and every year than you spend, without needing to magic up additional investment returns). * Knowing how to begin investing like a non-idiot.Synopsis ## This sounds a bit weird. What other books is it like? Money Blind isn’t all that like anything else out there. If it were, I wouldn’t have bothered writing it. That’s not to say the philosophy, or the neuroscience, or any of the other underlying lessons are thrillingly novel. The quantity (and in many cases ancient nature) of the references point to that. But to the world’s detriment, the bridge between these disciplines and their practical application to how each of our lives is shaped (usually calamitously) by money has never been properly built. For the traditionally sales-focused world of financial advice had no idea either how to build it, or to deal with the consequences for their careers. For investment advice to be any good, it needs to begin in the brain, not the bank. It needs Socrates, not sales scripts. And wisdom, not wishful thinking. ## **Synopsis** ### **Part One** An overview of how we’re prone to not making the most of money in our lives (including how when we think it’s helping us it’s actually harming us). A framework for seeing more clearly, thinking more easily, avoiding distortions, and overcoming self-deceptions, that draws on neuroscience, philosophy, psychology, economics, a dash of spirituality, and practical financial-advisory experience. What other investment books get wrong. Why living a Good Life is interwoven with having a better relationship with money, and why that relies on a sound philosophical grounding, an appreciation of the four types of knowing, and an application of them in a practically wise way. Why the only way lasting changes can be made is to rewire your brain (and how to do that most effectively). ### **Part Two** How the way your brain is wired and society is set-up create are at the root of all money problems, and how those in the best position to help are incentivised to keep it that way. Why your money problems are not money problems, but mindset problems, and therefore why the solution to those problems is philosophy, not more money. How getting unstuck with financial matters, and ultimately living well and fulfilling our potential lies in taking control of your cash, rather than letting it take control of you, and aligning the story our money tells about us with the story our soul most wants to be heard. Why this has nothing to do with numbers. ### **Part Three** How the investment world works. How to see past the distorting veil the industry casts over itself in order to sell you shit and keep you scared enough to trust them to sell you more. How to tell if an investment is the right one for you. ### **Part Four** How to get help that’s actually helpful. Why (almost) all investment advisers are crooks or idiots, and how this has been allowed to endure so easily. The sort of advice you really want, and how to find it (or do it yourself if you can’t). What the future of financial advice (should) look like. ### **Part Five** Becoming a financial philosopher (and why you’d want to, and why it’s not as hard as it sounds). # What this book isn't about The non-contents If these ideas already existed in a sufficiently well-organised form, this book wouldn’t. If traditional, non-philosophical, investment books reliably changed our relationships with money from our brains outward, rather than hoping to do it from numbers-based tactics inward, there would be no need for this book. But [such books all suffer](/the-book/1/1.2/1.2.3) from the same self-deception that is the cause of the crummy relationships with money they’re trying to improve. Money Blind is about beating self-deception. The trickiest thing about self-deception is that we also deceive ourselves into thinking we’re not deceived by anything. At least not in too dangerous or expensive a way. Yet when it comes to money, and our just-about-incessant interactions with it, not to mention all the really catastrophically crappy things it inspires people to do, this is very far from being true. What this book isn’t about is almost as important as [what it is](http://moneyblind.net/synopsis). In addition to the ‘What this isn’t about’ sections of the respective intro pages for each Part and Chapter, this is what Money Blind isn’t about: **1. Money Blind is about investment advice, but it isn’t about the illusion of reassurance** Most people seek investment advice for reassurance. And most receive it. But what they receive is usually only an illusion. It’s the reassurance of an industry that’s dressed itself up to be impossibly complicated, but you needn’t worry, because it is here to deal with that. **2. Money Blind is about mindset more than money, but it isn’t about equivocal woo-woo** Some investment books rightly acknowledge that money doesn’t solve money problems. But then dash immediately into an impractical land where willing yourself to have an ‘aura of abundance’ or redefining what being ‘rich’ or having ‘wealth’ really means is the answer… mysteriously overlooking that obsessing about ‘abundance’, ‘rich’, and ‘wealth’, or ‘having’ anything, be it stuff or status, is exactly what made things messy in the first place. Exhortations to love yourself or pigeonhole yourself into one of X number of different money types come from the same shelf as get-rich-quick schemes. If simply knowing it’s how you feel inside that matters were the answer, we’d all have got unstuck centuries ago. **3. Money Blind is about money, but it isn’t about numbers** We get stuck with money because we get stuck in the ‘having’ mode, when we want to be in the ‘being’ (or rather the ‘becoming’) mode. Because it is only in our participatory relationship with it that money takes on any meaning. Financial success is very rarely anything to do with numbers. There is an underlying emotional reward behind every use of money, every thought of money. Pretending there isn’t blocks us from working out what it is we really want to achieve and subsequently whether what we did to achieve it worked or not. Focusing on the numbers simply doesn’t work. I don’t care how strongly you think it will for you. It won’t. Everybody thinks they’re the exception. And everybody is wrong. **4. Money Blind is about changing behaviours, but it isn’t about specifying what those behaviours should be** If someone tells you how to spend your money, write them off as an insecure fool and move along. It doesn’t work that way. You can even tell someone that spending money on experiences will make them happier than spending it on stuff, and they’ll find a way to turn an experience into a material good. This book is about preparing your mental ground for insight, and wisdom. Becoming wiser with money means that when you slow down and think things through, you’ll make better money decisions by yourself. As a side-effect. Learning to think things through is harder than believing that the solution is for sale, but it has the great advantage of actually working. **5. Money Blind is about short-term work and long-term ease; it’s not about ephemeral easy answers and a lifetime of rumination and worrying about money** Some of the best financial advisers I’ve met have still been suckered in by the instantaneous palliative promises of get-rich-quick schemes. More than once. They’re that tempting. But they lead to a lifelong mental slog. Slogging is shit. We want real rewards from effortless effort. \* In summary, Money Blind is about understanding, in a profound and participatory way, that if you can’t see because you have your hands over your eyes, it’s better to remove your hands and adjust to the light than to pay for an expensive guide dog. # This book's logical flow A cascade of insights: the arguments in order Coming soon. # If... Then... If you're looking for a particular argument, then go to the relevant page Coming soon... In the meantime, start from the [Introduction](/the-book/intro), the [first page](/the-book/1/1.1/1.1.1), or check out the [stories](/contents/storytime). # Stories Links to the anecdotes for when you're bored of the arguments Each chapter contains a story. If you wished they were all in one place, here you go. If you suspect you're the real-life star of one of them, you probably are, unless you're asking for your libel lawyers, in which case you're definitely not. ### [The most valuable knowledge in the world](/the-book/1/s1) > In which a young millionaire realises that understanding financial-planning basics could easily be worth more than everything else they ever spend added together ### [It. Never. Works.](/the-book/2/2.1/s2) > In which the world's most typical riches-chasing fearer of rear-view mirrors starts to question if he'd be better off being slower to act like the Good Life is for sale, and quicker to question if this ever proves true ### [Doubling down](/the-book/2/2.2/s3) > In which a couple realise that parenting is about presence, not presents and that even ostensibly value-driven decisions can be misleading if they are not thought through ### [What do Blackheath people do?](/the-book/2/2.3/s4) Coming soon ### [Hollywood Hero](/the-book/2/2.4/s5) > In which a man living his (and many others' dreams) channels his celebrity-stoic friends to realise (sort of) that balance-sheet dreams are a catch, not a thing to be caught, and you can have all the money in the world, but unless you’ve got something to do with it, it’s often just a cue for wasting time. Many more to follow\... # Contact and comments Hello! Want to say hello back? Or something else? ## Comments You can’t comment here. For secret reasons. However, I’m very open to engaging in thoughtful discussion about any of the topics I write about. Feel free to share a link, comment alongside it, and let me know. I’ll also be sharing other stuff on [LinkedIn](https://www.linkedin.com/in/paulojdavies/detail/recent-activity/posts/). Or [e-mail me](mailto:belgarvm+comment@gmail.com?subject=Hello). Reading guaranteed. Replying not. Insightful comments will make it onto the site in some way, and maybe one day the book’s acknowledgements page. Spot a typo and be entered into a prize draw.\* \* timing and indeed existence of any prizes is to be confirmed and cannot be guaranteed. ## Love, hate, and largely indifferent mail All are welcome. If I’ve helped improve your life in some way and you want to thank me, buy the book. If you really want to thank me, buy it for everyone you know. If instead I’ve failed to do anything of the sort, but you think hating me will improve your life instead, go ahead: better to project it at me than someone who may give a crap. All I ask is that you at least try to be witty. E-mail links: [Love](mailto:belgarvm+love@gmail.com?subject=Love) *♦* [Hate](mailto:belgarvm%2Bhate@gmail.com?subject=Something%20witty) *♦* [Indifference](mailto:belgarvm+indifference@gmail.com?subject=Indifference) ## Want to help me edit this thing? No, you do not. But people keep asking anyway. So I’ve written up [guidance](/contents/madness). # Editing guidance Punishment for gluttons ## So you’d like to help edit this thing? That is astonishingly lovely. You are a delight of a human being. I thank the gods for your existence and wish that you encounter the perfect balance of joyful highs and growth-accelerating abysmal lows on your life’s path. But I wouldn’t bother if I were you. Because you probably don’t really want to. Seriously, editing a friend’s work is a huge ask, for basically no reward, especially if the author is someone like me who for whom genuine appreciation of thoughtful suggestions is of zero relevance to acceptance of the change (see point 7). It’s also really difficult. I’ve worked with sublime professional editors, so I’ve seen how it can be amazing… but I’ve also worked with terrible ones. And the terrible ones, however well-meaning, greatly outnumber the good. Still, I know that some people actively like this sort of shit, so press on if you want… I just want to make sure it’s an informed consent, that you feel absolutely no obligation to do so, and that you feel comfortable to quit at any time. ## The guidelines **(for those that really do want to do this)** 1. **Be friendly!** – By which I mean if you feel like sugar-coating something, then please save us both the time and stop. I fucking hate sugar. One of the best ways to demonstrate friendship is by being a bastard. Who better to deliver potentially uncomfortable truths? Who can be more trusted to do something they probably won’t personally enjoy for the good of someone else, who won’t enjoy it either, but will appreciate it (in the long-run)? I know people hate to be honest in feedback situations, for all sorts of really crummy reasons; I can but hope you’re better than that. If you think something’s shit and you *don’t* tell me, it’s not the least reliable sign that you hate either me, or yourself. Don’t be a hater. Be a friend. And remember, the science is clear: shit sandwiches don’t work *and* they waste time.
2. **You are a listener, not the speaker** – Good editing ensures the message received gets as close as possible to the one being sent. Bad editing sends the same message in a different tone, so it’s received better by people who are like the editor, but worse by people who aren’t. Bad editing can also distort the message entirely into the one the editor would’ve sent if they were writing it. Please comment where you think a message is ambiguous. Please do not comment where you’d merely phrase it differently because you speak differently. Judging by the latter accounting for 95% of editing I’ve ever experienced (including professionals) this is really hard; but it has to be avoided because otherwise you just get caught in a time-wasting back-and-forth of changing the tone, not the clarity.
3. **If you think Hemingway is a better writer than Proust, please step away now** – The word writer is too vague to have any useful meaning, but that doesn’t stop 99% of modern writing advice thinking prose style is somehow sinful. This isn’t a business book. Yes, I could probably be better understood if I went down the business-book path. But I have some semblance of a soul, so I refuse to do this in the name of art, common decency, and life in general. Top-class reporter-writers like Hemingway have their place of course, it’s just not here.
4. **Examples of acceptable feedback** 1. This particular bit is really fucking brilliant because of x, y, z. 2. This content does not match the point the precis says it is making. 3. The content matches the precis, but you’ve tried to explain more than just this one point and lost some clarity over the main point because of it. 4. This content makes no sense to me. Are you saying \? 5. This content feels like it would be better off in \. 6. Judging by the precis, this section doesn’t feel important enough to be included. 7. You’ve assumed knowledge here you cannot assume (i.e. \). 8. An example would really help here. \[special note on examples: I don’t want to fill this with examples for the sake of it, but I am also acutely aware that I’m blinkered by my own assumption of what everyone else has already internalised just because they’ve possibly read some of the same books as I have.]
5. **Types of unacceptable feedback** 1. I would change this point a bit so it sounds more like the tone I personally use when writing or speaking. \[warning: if you think this at all, you will do so in a much more subtle way than this… it’s by miles the number one temptation of editors, but it’s ultimately unhelpful.] 2. This is too long. \[special note on length: Length is not a reason to change something. Shit short things are better than shit long things, but they’re still shit. Simple is great, but simplistic is not. I want elegant, not simplistic. I am not writing this book for commercial success. I am writing it to be right, not to sell right now. Because a lot of these ideas are new (or at least old ideas applied to new situations) they inevitably take some explaining, to take people on the journey from not having a clue, to understanding. This often (but not always) takes longer than getting the gist in a diagram. Others are better at that. Do not review this book thinking it is that book. These are important, insightful, ideas (I hope). If they could be expressed simply enough for everyone to instantly understand them, they would be trivial ideas, not insightful ones. If you’re learning something new, by definition you have to put in some work to see what you did not see before.]
6. **Questions to answer** 1. If you *had* to remove a chunk, what would you remove? \[if something is more or less unanimous, I’ll remove it] 2. Which particular bits (if any) do you think should be kept at all costs? \[a single vote is likely to make it stay; history suggests the answers to 1) and 2) will be annoyingly almost identical]
7. **My love and appreciation of your feedback is not to be judged by whether I incorporate it** – I welcome all outside views, because by definition sharing your vision improves my own. You will see things I simply cannot. But you will also see lots of things I too have seen, considered, and dismissed. This doesn’t mean they’re bad ideas. And it definitely doesn’t mean I think you’re an idiot. Some of my best ideas *about* this book were not right *for* this book. To get the first type, I need a lot of the second. To be a one in a million requires a million to be the one of, to paraphrase Nietzsche.
8. **Special note for Americans** – I’d love to engage with you on the ideas, to try to see the world of money relationships as you do, because frankly I’ve tried pretty hard and I still don’t understand you at all. But your editing views have too many hurdles to overcome to be of much use (e.g. the issues of tone and predilection for business-like writing noted above, especially when coupled to the divergent worldview). Maybe one day I’ll translate this into American, but I doubt it. # Endnotes An alphabetical list of all the references, to give a flavour of this book's influences. The most valuable books for personal finance rarely have anything directly to do with finance. ## Part One Alain de Botton, Status Anxiety Allusion to William Shakespeare, Hamlet, Act 2 Scene 2 An allusion to both George Lakoff’s Metaphors We Live By and Joseph Campbell’s Myths to Live By Anthony de Mello, The Way to Love Anthony Gottlieb, The Dream of Reason Aristotle, Nicomachean Ethics Barry Schwartz, TED Radio Hour Bertrand Russell, History of Western Philosophy Bertrand Russell, What I Believe Bruce Lee, Striking Thoughts Calgacus' ‘Speech to his Troops’ in Tacitus, Agricola Carl Jung, Modern Man in Search of a Soul Carl Jung, Two Essays on Analytical Psychology Charles de Montesquieu, quoted in A Dictionary of Thoughts (1891; edited by Tryon Edwards) Chris Budd, quoted in Damien Hirst, interview with Idler Idler issue 71, Mar/Apr 2020 Dan Ariely, at a talk in London to promote Small Change: Money Mishaps and How To Avoid Them Daniel Dennett, Consciousness Explained Daniel Dennett, Intuition Pumps Daniel J. Siegel, Mindsight Daniel Kahneman, ‘Focusing Illusion’, Edge.org Daniel Kahneman, interview with Haaretz Daniel Kahneman, interview with Sam Harris Daniel Kahneman, Thinking, Fast and Slow Dante Aligheri, The Divine Comedy David Cain, Raptitude.com David Hume, A Treatise of Human Nature David Perlmutter and Alberto Villoldo, Power Up Your Brain: The Neuroscience of Enlightenment Derek Sivers on the Tim Ferriss podcast Douglas Adams, Last Chance to See Egon Friedell, A Cultural History of the Modern Age, vol. 3 Emory University of School of Medicine, ‘Expert Financial Advice Neurobiologically “Offloads” Financial Decision-Making under Risk’ Jan B. Engelmann,C. Monica Capra,Charles Noussair,Gregory S. Berns, March 24, 2009 Epictetus, Discourses Epictetus, quoted in Paul Tillich, The Courage to Be Epictetus, The Discourses Epicurus, Fragments Erich Fromm, To Have, Or to Be? Euripides, Electra Friedrich Nietzsche, Aphorisms on Love and Hate. The full quote is: ‘In individual moments we all know how the most elaborate arrangements of our life are made only so as to flee from the tasks we actually ought to be performing, how we would like to hide our head somewhere as though our hundred-eyed conscience could not find us out there, how we hasten to give our heart to the state, to money-making, to sociability, or science merely so as to no longer possess it ourselves, how we labour at our daily work more ardently and thoughtlessly than is necessary to sustain our life because to us it is even more necessary not to have leisure to stop and think.’ H.L. Mencken, A Mencken Chrestomathy Immanuel Kant, What is Enlightenment? (definition paraphrased) Iris Murdoch, The Sovereignty of the Good Jan B. Engelmann, Emory University news release Jean-Paul Sartre, Portrait of the Antisemite (abridged version of Réflexions sur la question Juive, quoted in Walter Kaufman, Existentialism) Jiddu Krishnamurti, Think on These Things John Maynard Keynes, Economic Consequences of the Peace John Vervaeke, Awakening from the Meaning Crisis, ep. 10 John Vervaeke, Awakening from the Meaning Crisis, ep. 27 John Vervaeke, Awakening from the Meaning Crisis, ep. 4 John Vervaeke, Christopher Mastropietro, and Filip Miscevi, Zombies in Western Culture: A Twenty-First Century Crisis John Vervaeke, Jon Elster, Nuts and Bolts for the Social Sciences Jordan B. Peterson, 12 Rules for Life: An Antidote to Chaos Julian Jaynes, The Origin of Consciousness in the Breakdown of the Bicameral Mind Ludwig Wittgenstein, Philosophical Investigations Ludwig Wittgenstein, The Blue and Brown Books Lynne Twist, The Soul of Money Marcel Proust, In Search of Lost Time, vol. 2 Matthieu Ricard, Happiness Michael Merzenich, quoted in Norman Doidge, The Brain That Changes Itself Mihaly Csikszentmihalyi, Flow Morgan Housel, Inseparable Pairs Nassim Nicholas Taleb, Facebook post 2nd July 2014 Nicolas Humphrey, answering the Edge.org annual question in 2017 (‘What Scientific Term or Concept Ought to be More Widely Known?’ ) Norman Doidge, The Brain That Changes Itself Norman Doidge, The Brain’s Way of Healing Paul Dolan, Happiness by Design Paul Tillich, The Courage to Be Pierre Hadot, What is Ancient Philosophy? Plato, The Republic Ralph Waldo Emerson, quoted in Ross Edgely, The World’s Fittest Book Richard Lovelace, To Althea, from Prison Rick Hanson, Buddha’s Brain Rory Sutherland, Alchemy See Harry Frankfurt, On Bullshit See Shirley H. Wang, The Wall Street Journal, for a summary: Seneca, Moral Letters Seneca, On the Shortness of Life Sophocles, Antigone Sophocles’ Teiresias in Oedipus the King Søren Kierkegaard, The Point of View, quoted in Walter Kaufman, Existentialism Søren Kierkegaard, Two Ages: The Age of Revolution and the Present Age. A Literary Review Sue Gerhardt, Why Love Matters Terminology borrowed from David Epstein’s Range Theragata 6.12 Thomas More, Utopia Voltaire, quoted in Will Durant, The Story of Philosophy Will Durant, Fallen Leaves Will Durant, The Story of Civilization, vol. 1 Will Storr, The Science of Storytelling William James, quoted in Christophe André, Mindfulness William James, The Principles of Psychology, vol. 1 William Shakespeare, Julius Caesar, Act 2 Scene 2