"Man has the power to act as his own distroyer -- and that is the way he has acted through most of his history." ~ Ayn Rand
What is the greatest deception in the history of finance? Is there such a thing as "financial freedom?" I wrote a post over at The Big Picture that makes an honest attempt at answering these questions (or at least to provoke the answers within your own mind).
If you have an extra moment, please join in the discussion at The Big Picture that follows the post in the "Comments" section. The blog author (Barry Ritholtz)'s readers often have interesting insights into everything from psychology to investing to economics to philosophy (just like you)!
If you are new here, to The Financial Philosopher, you might try some of the following links to posts related to "The Greatest Deception..."
"It is no measure of health to be well-adjusted to a sick society." ~ Jiddu Krishnamurti
Consider this common scenario: You are alone with your thoughts as they take you away from the present moment; perhaps you are looking out of a window in your office, your car or your home imagining, "If only things were different. If only I had X amount more money, things could be so much better."
As your thoughts travel, they take you further away with them and you might even arrive at something more like fantasy: "If I inherited a large sum of money or won the lottery I could wipe out all of my problems -- my debt, my job, my boss, my dead-end existence -- I could build my dream house, buy a car with no maintenance problems, and become a hero by sharing money with friends, family, and charities in desperate need. Life would be so easy and wonderful..." A sudden noise awakens you from your fantasy and you re-enter reality with an increased feeling of discontent.
Does this sound familiar in any way? Most of us would be dishonest if we said these thoughts, or thoughts like them, have never entered our minds. These thoughts are certainly normal, but is normal healthy? The short answer is No.
Thanksgiving is a time of reflection -- a time of counting our blessings and being thankful for what we have -- not of what we have not. This is the essence of contentment but it is unfortunately not a normal behavior; it is most commonly reserved for one day of the year; however, thankfulness and contentment is something that is best practiced every day of our lives -- not just on Thanksgiving day. This is not normal -- this is healthy.
In the spirit of remaining healthy -- of forming and maintaining habits of contentment -- perhaps you can combine the traditions of Thanksgiving with New Year's Day and form resolutions (and habits) to maintain your contentment and well-being throughout the year and throughout your life. Here are some suggestions:
Give Thanks Every Day: Whether you pray, meditate, think to yourself, or share thoughts with friends or family, recall daily all of the things you are thankful for -- things that you already have and/or things that money cannot buy -- a roof over your head, clothes, food, life, health, friends, family.
Be Amazed by Things Typically Taken for Granted: Breathing, sight, sound, touch, a good meal, a good glass of wine, good music, a good conversation, being loved, having someone to love.
Know That Things Can Always Be Worse: As bad as things appear, they can always be much worse, especially if you find yourself stressed over small things, such as a traffic jam. For example, the traffic jam may have been caused by a tragic accident. Be thankful that you or a loved one were not involved in the accident, turn on some pleasant music and count your blessings.
If the Event is Outside of Your Control, The Perception of it is Within Your Control: You cannot control other people, the weather, the stock market or geo-political challenges. Worrying about them only harms yourself.
Be Mindful: Stress builds quietly in the absence of mindfulness. Being mindful is the combination of all of the previous suggestions, in addition to an acquired awareness of your own behavioral tendencies. You are human and you are a unique personality. Learn this, study this, and know this. Your brain, left unchecked by the mind, will slowly form destructive habits.
In summary: Know yourself, love yourself, and be thankful every day. If you are not content with what you have today, you will not be content with what you have tomorrow...
"The supreme paradox of all thought is the attempt to discover something that thought cannot think." ~ Soren Kierkegaard
Understanding yourself as a human is at the root of self-knowledge. All kinds of success -- not just financial -- derive from it. Perhaps the greatest and most distinctive trait of being human is the capacity to reason, to be rational. Or could it be that what makes us unique in the animal kingdom is the capacity to stretch beyond reason -- to knowingly and purposely act irrationally.
My favorite investing and economy blog, The Big Picture, recently shared a wonderful speech, The Uniqueness of Humans, where Stanford primatologist and anthropologist, Robert Sapolsky, shares his observations of (and insights gathered from) his study of baboons. [I'll provide another direct link to the video of this entertaining and educational speech at the end of this post.]
Essentially, Sapolsky shares that humans have the same fundamental genetic makeup of all animal species. Animals, especially baboons and chimpanzees, exhibit many of the same behaviors, such as aggression, theory of mind, empathy and cultural transmission, as human's do. Humans, however, present these behaviors in unprecedented ways, such as passive-aggression and non-reproductive sexual behavior.
What struck me the most about the speech is how Sapolsky ended it, which was framed by this abstract phrase:
The less it is possible that something can be, the more it must be.
In other words, humans are not only capable of holding contradictory notions in their head, but even more striking, the fact that something is contradictory or seemingly impossible is the very reason it becomes a moral imperative to act on it.
Sapolsky used an explicit example of this behavior that is unique to humans by describing a Nun who ministers to prisoners on death row -- some of the most frightening, deplorable human beings on the planet. When asked why she ministers to these men, she simply replies, "the less forgivable the act, the more it must be forgiven. The less lovable a person is, the more you must find the means to love them." The Nun's behavior is irrational but as Sapolsky worded it, "magnificent," and the basis for a "moral imperative" to act.
...humans have the capacity to simultaneously believe in two contradictory things." ~ Soren Kierkegaard
On a side note, I thought it interesting that Sapolsky humbly admitted that his own brilliant mind could not rationalize the Nun's behavior, especially because, in his own words, he is a "strident atheist." I found this to be a contradiction of contradictions: This "magnificent" irrationality, which is a defining human ability -- the capacity to leap beyond the finite bounds of rational thought -- is absent in his own life.
Furthermore, in his speech, Sapolsky used a quote from Soren Kierkegaard, who is famous for his "leap of faith" idea, which essentially says that the rational mind cannot believe in God; therefore, one must go beyond rationality to believe -- to have faith. It is futile, therefore, to try and think of something that thought can not think. One must simply have faith. Kierkegaard, by the way, believed in God and was a Christian (although not in the conventional sense at the time)... He also believed that one individual's life can impact the entire world -- another concept that Sapolsky seemed to admire but is not quite able to believe.
If not for this magnificently irrational capacity, however, Kierkegaard, and many other important figures, may not have ever succeeded (or may not have even tried) in their most important contributions to mankind. Some of these remarkable individuals that instantly come to my mind include Rene Descartes, Walt Disney, Thomas Edison, Martin Luther King, Jesus Christ, Harriet Tubman, Viktor Frankl, Gandhi and the list goes on...
Regardless of one's religious faith, or more specifically, regardless of the level of one's intellectual brilliance, we all limit our potential as individuals if we stop at the bounds of our own rationality. Certainly there are implications and applications of this in the financial world, specifically with investing! For more reading on subjects similar to this one, follow the links to my "related" posts below the video link...
Check out the video, if you have 30 minutes, and let me know what you think!
The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.
