This post is going to be a little different today and it’s inspired by a recent book that I have read (actually a book that I listened to in audio format and am now reading a physical copy). The book is titled, A Guide to the Good Life, written by William Irvine. My job as a financial advisor is all about helping people achieve their financial goals but this book reminds me that we might be missing something.
Whenever I meet with a new client, a large part of the financial planning process is identifying their goals. The biggest of which is almost always retirement. Then there are the ancillary goals such as travel, purchasing a second home, education, among other things. These are all fine goals, all of which are obtainable with proper planning but even if you do all these things and you check everything off your bucket list there is still chance that you might mislive. What I mean by this is when you look back over your life will you be satisfied? You need to ask yourself, “What do I really want out of life?” A nice house, fancy car, a secure retirement, are all just the things you want in life. By asking what you want out of life I am looking for your grand goal in living. Of the things in life you pursue what do you find most valuable.
Most people will have a difficult time actually naming this. People are very good at identifying what they want every day or even over the next few years but they never take the time to determine what is their grand goal in living. But without this type of goal you are lacking an overarching life philosophy. Why does this matter? Because without it there is a good chance you might mislive as I stated earlier. Despite all your efforts, all your accomplishments, everything you do and achieve throughout your life there is a chance, when it is all said and done, you will look back and realize that you wasted your one chance at living. Rather than pursuing your one goal throughout your life, you were distracted by all the various diversions life has to offer.
Now, suppose you can identify your one main goal in living and explain why your goal is worth pursuing. Then you only need to outline a strategy to obtain it; the steps you need to take to give you the best chance of living the life you want. The example William Irvine uses in his opening chapter, appropriately, relates to your wealth. If you want to avoid wasting your wealth you only need to look online and find a financial advisor whom will help make sure you have the best chance of achieving all your financial goals without running out of money. How then, do you find the advice necessary to avoid wasting, not your wealth, but your life. This is where a philosophy of life comes in.
The Philosophy that Irvine’s book is about is Stoicism. What first comes to mind when you hear the word stoic is probably an unemotional, cold, extremely logical person, like Spock from StarTrek. This is a modern misconception, and Spock is a caricature of this misconception. The Stoic’s did not seek to remove all emotion from their life but instead sought to control how they react to their emotions and reduce the effect that negative emotions have on them.
In the book, Irving, offers advice on how people should live. As he says, he acts as a conduit for Stoic philosophers from thousands of years ago. It is a practical guide rather than an academic study with exercises and lessons that are applicable to your daily living. First providing a brief history of Stoicism before diving into “Stoic Psychological Techniques.” Most of these techniques are about focusing only on what you can control. If you have no control over a situation or its outcome, then you shouldn’t let it bother you. You should be indifferent to it. I found this concept particularly helpful when it comes to investing and the stock market. In fact, it correlates well with my overall investment philosophy. Which is that the markets are efficient and no one can effectively time the market or pick stocks and outperform the market for any meaningful length of time. There is a lot of data to back this up. So instead, as an investor, you should only focus on what you can control. This includes, taxes, costs, the appropriate asset allocation for your specific plan, and your behavior. This means when the market is down you don’t panic; you stick to your long term plan. Likewise, then the market is doing well you don’t get greedy.
The books goes on to give practical advice on dealing with people, grief, seeking fame, old age, and ultimately what it takes to live a good life.
As a financial advisor, I found this book eye-opening. My basic job description is to help people accomplish their goals. These goals are almost always materialistic and connected with wealth, which is not saying they are bad goals to pursue. Not at all, most of those goals can provide much enjoyment in life, as well as security and care for your loved ones. But in pursuing these goals we shouldn’t lose sight of the bigger picture; what really matters and what you really want out of life. I very much doubt you will look back and say that you lived a full life because you were able to purchase the boat that you always wanted. Consider the bigger picture, what should you be doing now not only to ensure you achieve all your financial goals but also what you should be doing with your life on a daily basis to ensure you achieve a good life.
Additional Resources: Check out this video review of the book by Philosopher's Notes: