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Money and Stoicism: Philosophy Series


money and stoicism
❝Choose not to be harmed - and you won't feel harmed. Don't feel harmed - and you haven't been.❞ -Marcus Aurelius

I'm listening to a podcast about happiness where the host is interviewing an expert on Stoicism. As I listened to the interview, I'm struck by how different the guest describes Stoicism compared to what I thought it was. Every time I've heard somebody talk about somebody being stoic, it was with regard to a completely emotionless person. It's almost a burn to be called a stoic. This is the first time I've heard about the difference between a stoic with a lowercase s and a Stoic with a capital s. A Stoic with a capital S refers to somebody who follows the philosophy of Stoicism.


I learned that Stoicism is an ancient philosophy of life that has made a comeback in recent years. In Stoicism, the idea is to recognize that the grand goal in living life is to be tranquil. Tranquility is defined as a state of calm and contentment. This is quite different from a life with a goal of becoming and remaining happy, whatever happy means. On the road to tranquility are strategies that can be employed to avoid negative emotions, often via reframing. How we think about and interpret the situations we are in has a dramatic impact on how we feel about those situations.


Stoicism has a lot to teach us about our financial lives.


Dichotomy of Control


One of the main teachings in Stoicism is that some things are in our control and some things are not. They call this the dichotomy of control. Distinguishing between things that we can control and things that we can't control helps us to focus our time, energy, and attention on things that we actually can control. This gives us permission to let go of things that are outside of our control.


The longer you think about this dichotomy of control, the more clear it becomes that many of the things most of us pursue are outside of our control. If you decide you will be happy only if you get promoted, for example, then you are hanging your happiness on things that are outside of your control - you can't control who else applied for that job or the mindset of the hiring managers.


There are many examples of things that we don't have control over. Stoic philosophy tells us that it is not worth spending time worrying or otherwise contemplating things that are outside of our control. If things are not up to us, then worrying about them won't do any good. That's time that you can spend on things that are in your control, that will add value to your life.


Ultimately, one thing that is in your complete control is your opinion and interpretation of outside events.

dichotomy of control and money

Positive and Negative Emotion


Many people use the word stoic to talk about somebody who shows no emotion. This is your stereotypical cow in the rain just letting bad things happened without a care in the world. There's a tendency to think that Stoicism is about suppressing all emotion. It follows, then, that your life would be boring and meaningless because suppressing emotions can keep us from enjoying life.


However, that is a misguided view. The Stoics are often cheerful and optimistic about life. They enjoy life to the fullest and are far from passive people who walk around getting abused. Instead, Stoicism, and its drive for tranquility, is about getting rid of negative emotions and pursuing and accepting positive emotions.

cultivate positive emotions around money



The Three Dimension Meaning in Life Scale assesses three dimensions of meaning in life: coherence, purpose, and significance. Coherence is the feeling that your life makes sense. Purpose is having direction in life. Significance is the belief that your life has value.




Gratitude


The capital T truth about life is bad things will happen, however we define "bad." Stoicism has an intense focus on gratitude. No matter how bad something is, it could have always been worse. Stoicism guides us towards remembering that things can be worse and that we can be grateful that's a bad thing that happened to us wasn't any worse.


Early one morning, I was out on a jog before the sun came up, and I ran across some railroad tracks. Mostly because I couldn't see, but partly because I wasn't paying attention, my foot struck a railroad spike that was sticking out the wrong way. I fell to the ground hard. It happened so suddenly I was unable to get my hands out in time to break my fault. I landed on my arm, injuring it pretty severely. I ended up with cuts and scrapes all over my face and arm. There was blood dripping down my clothes. I was in rough shape.


This was a situation where I could have easily broken my arm. But I didn't. If I had broken my arm, I wonder to myself, how much would I have paid to get back to this situation I'm in right now, with simply some cuts and scrapes?


And what if I had broken my arm? As I pick myself up off the ground, I noticed other railroad spikes sticking out. It is definitely in the realm of possibility that one of these spikes could have impaled my eye as I fell. That could have killed me, or at the very least, cause me to lose an eye. If that happened, how much would I have paid to get back exactly to the point where I'd just broken my arm, an arm that will heal.


In your worst days, there are at least a billion people that would happily trade places with you exactly how you are. If you are reading this, you have a pretty good life. You just have to notice it and be grateful for it.

gratitude and money

Not Taking Life for Granted


It's very easy for us to take life for granted. The Stoics recommend what I call an extreme version of gratitude when they encourage us to not take our lives for granted. They recommend something called negative visualization. With negative visualization, you regularly pause and reflect on what life would be like if you lost something that you value. The idea is that everything we have is only ours temporarily. Taking our lives for granted involves not being grateful for what we have. Negative visualization is the process of reflecting on the loss of things that we may lose. Everything we have is on loan. Everything is temporary. Recognizing this regularly helps us appreciate our lives more. Reflecting on the fact that we will lose people and things that are important to us helps lose the sting if and when those things actually happen. Negative visualization is the antidote to taking your life for granted because it prevents you from sleepwalking through life.


Similarly, the last time meditation is an exercise where we pause throughout our day and realize that whatever we are doing may be the last time we do that. It's rooted in the idea that we've already done things for the last time, and we probably didn't know they were the last time while we were doing them. This even helps reframe experiences that we may not enjoy while we're doing them, like going on a walk with our dog in the middle of a snowstorm or getting up in the middle of the night to care for our screaming baby. Recognizing that there will be a last time that happens helps you appreciate your life more.


It should be noted that the Stoics make a distinction between contemplating something bad happening and worrying or ruminating on things. Contemplating these things is done to prevent taking our lives for granted and can be done as an intellectual exercise without impacting our emotions.

cultivate gratitude and don't take life for granted

Cognitive-Behavioral Therapy


Because Stoicism is about getting clear on what's in our control and recognizing that our interpretation of events is entirely in our control, many believe cognitive-behavioral therapy has its roots in Stoicism.


Cognitive-behavioral therapy helps people overcome catastrophic thinking and other unhelpful negative interpretations of outside events. It helps people put things into perspective and respond rather than react. It increases resiliency and problem-solving.


This is a great form of therapy, and it's very helpful. It's also almost the exact same thing that Stoics teach.

money, stoicism, and CBT

Stoicism can be applied to money by helping us reinterpret events that are happening to us. It helps us get clear about things that are in our control, such as how much we save or how much news we watch, and outside of our control, such as what the market does. Stoicism guides us to appreciate and embrace positive emotions such as awe, joy, and contentment. It prevents us from taking our lives for granted through various forms of gratitude.


Sometimes financial problems will happen, and those financial problems need solutions. Stoicism helps us tackle these problems without feeling bad about them.


You only have one life. Live intentionally.


Related Money Health® Reading
References and Influences

Irvine, William: A Guide to the Good Life

Irvine, William: The Stoic Challenge

Pigliucci, Massimo: How to Be a Stoic

Pigliucci, Massimo, Skye Cleary, & Daniel Kaufman: How to Live a Good Life


Note: Above is a list of references that I intentionally looked at while writing this post. It is not meant to be a definitive list of everything that influenced by thinking and writing. It's very likely that I left something out. If you notice something that you think I left out, please let me know; I will be happy to update the list.

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About the Author

Derek Hagen, CFA, CFP, FBS, CFT-I, CIPM is a speaker, writer, and coach specializing in financial psychology, meaning and valued living, resilience, and mindfulness.

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