"I do nothing but going about persuading you all, old and young alike, not to take thought for your persons or your properties, but and chiefly to care about the greatest improvement of the soul. I tell you that virtue is not given by money, but that from virtue comes money and every other good of of man, public as well as private. This is my teaching, and if this is the doctrine that corrupts the youth, I am a mischievous person." ~ Socrates
Five years ago today I stopped "workin' for the man" and started my own investment advisory firm. I've learned many lessons along the way, none of which I would have predicted. Here are five of those lessons:
1. Plans Are Useless, Planning is Essential: This lesson, with words borrowed from Dwight Eisenhower, speaks to the nature of life itself. Life is constantly evolving; unforeseen obstacles and opportunities will continue to arise. Plans may account for the unforeseen but it is impossible to predict the timing or intensity of unforeseen events. I'm a CFP and an MBA. You'd think I'm as good of a planner one might find (I even received an 'A' in my graduate entrepreneurial business course for my business plan). My business plan did not foresee The Great Recession of 2008 and it did not foresee my creation of The Financial Philosopher. However, with that said, the planning process, whether it is financial or otherwise, often brings to the surface information, thoughts or feelings that may not have been recognized if not for engaging in planning. Create the plan for the purpose of engaging in the planning process but file away the plan and form a new one within a year to 18 months.
2. Wisdom is More Powerful Than Knowledge: As Sir Francis Bacon profoundly stated, "Knowledge is power." However the only knowledge that is truly empowering is self-knowledge. Certainly, knowledge of external things (i.e. money, material and social matters) can aid in acquiring external wealth but the lack of self-knowledge has the potential to destroy the self along with the acquired external wealth. For example, throughout the credit crisis and ensuing recession, I've witnessed clever but criminal behavior (i.e. Bernie Madoff) destroy financial wealth and the lives of many people--all because of knowledge in the absence of wisdom. In my personal and professional life, I've minimized the pursuit of external knowledge (I stopped my subscription to all magazines and newspapers and I no longer use financial planning software) and noticed my judgment has become much more clear, confident and prudent.
3. True Wealth is Not Measured by Financial Means: From the beginning of this five-year journey, I set out to follow the wise advice of my then 4-year old son: "I'd rather have my Daddy than money." Think about all you wish to accomplish with money: Do any of these accomplishments align with your highest priorities? You may find that your financial pursuits, no matter how good your intentions, are eroding at your most valuable possessions. What is more important than your health, personal relationships and connection with the present moment?
4. Happiness is Found Easier When Not Looking For It: Happiness, by its own definition, is not something that can be created or manufactured--it "happens." By virtue of finding contentment with all that you have now enables happiness to happen because you have effectively reduced the perceived benchmark for happiness to the present moment. In different words, if you already have enough, all that you acquire from this moment is more, which brings higher levels of satisfaction. It is not wrong to desire more; this is your nature. However, it is unhealthy to desire more in absence of contentment.
5. The Fear of Death Does Not Come From a Love of Life: The combination of reading philosophy and losing people and animals I love (along with passing my own 40-year mark) has provoked a profound reflection on life. If one is to begin with the end in mind, the true end is not some destination reached in a financial plan, a career path or some other end. All ends in life are subordinate to the end of life; the plans we make—financial, career, and personal relationships—may be given meaning and purpose by holding close the thought of mortality: Death gives meaning to life—your life—and it enables the perspective that will allow you to form your own philosophy—your life philosophy—the meaning and purpose of your life and all that you do. To embrace death is to embrace life and all that it contains.