Stoicism and Your Finances

Stoicism and Your Finances

Over the past few years, I’ve become a huge proponent of Stoicism.  I’ve read many books on the topic, highly suggest Meditations and Daily Stoic fyi, and am constantly doing my best to incorporate it into my own life.  As I’ve done so, I have also realized that it has many parallels with financial planning. 

One of the tenets of Stoicism is not just controlling the controllable but living in the moment.  Where this can be very pertinent advice is recognizing a few key things about the present. 

The Past

All too often, we let past experiences dictate our current decisions.  Now, it is not to say we shouldn’t learn from the past, but we should weigh it appropriately.  All too often, someone sits down in my office and is too gun-shy about investing appropriately due to the fact of a bad experience in the past.  I’ll hear statements like, “I lost so much during Covid, I can’t go through that again.”  Or better yet, I’ll have people have others’ past experience affect their current decisions with comments such as, “My father during the 08 crisis lost a million dollars and I never want that to happen to me.”

I certainly respect these notions, but to let the past still determine your current mindset is a no-no when it comes to Stoicism.  Think about how many times we would be better off in our lives if we forgot all bad experiences when making current decisions.  In an odd way, the past is nothing more than a memory and nothing further.  We can’t change it, and in reality, why should it have this oversized impact on our current life?  You are living in the now, remember thus focus on what the best decisions are for you to make now, not the past.

The Future

As of the writing of this blog, the markets are hovering around all-time highs.  That said, why can’t we enjoy it?  Again, back to the Stoic beliefs of living in the moment.  All too often, I’ll hear people say things about the future like, “I’m nervous about tariffs” or “the markets can’t keep going up.”  Why is it so difficult to enjoy the fact that you are probably the wealthiest you’ve ever been at this very moment?  Again, we have no control or true idea what the future holds in store for any of us, let alone the markets that have a billion different factors to them. 

If we understand that we not only can’t control the future, but also have no real idea what it has in store for us, or the markets, why do we expend so much energy worrying about it?  Why let the future unknown have any impact on our current decisions or, more importantly, state of mind?

The Present

This all leads us to the present and the here and now.  Is all this to say we shouldn’t learn from the past or ignore the future?  OF COURSE NOT.  However, it is to note that we should weigh and frame these things accordingly.  It also means that the greatest decisions should be made on what is best today.  What can you control vs what can’t you control?  Would you be better off if you still paid mind to the past and the future, however, if you didn’t let your emotions of those two dictate your current decision-making?  You know my opinion, but I’ll let you ponder these things yourself and come to your own conclusion.

I’ll leave you with this final thought on Stoicism.  We control our thoughts and decisions.  We have the agency to not let those sometimes-poisonous thoughts creep in and poison our current decisions.  Oh, and heck if all else fails, remember that is what we are here to do, give sound advice and rip the emotion or past/future noise out of the equation.

Sorry if this blog got too philosophical, or maybe I’m not sorry, and let you decide for yourselves.

As always, stay wealthy, healthy, and happy.