Over the years, I’ve come to understand that financial success isn’t a cause, it’s an effect. What I mean by that is that there are certain fundamental things you can cultivate in your life that, once cultivated, will cause financial success to occur almost effortlessly.
The problem with that approach is that modern society encourages what amounts to the opposite of those core values. It encourages people to spend to keep up with the Joneses, to artificially and temporarily improve self image, to give into every little temptation without considering the drawbacks, to toss self-control to the side of the road. The reason for that is that encouraging those values makes it much easier for companies to sell products to consumers.
Part of that is why I find so much value in reading and thinking about philosophy, science, and the classics. In those domains, different values reign supreme. The focus is on the value of things like self-reliance and internal reflection. Thinking about those things deeply over time has caused some changes in my core values and virtues, and I believe it is those changes that has made financial change in my life relatively easy.
At the core of that are the cardinal virtues. As summarized by Wikipedia:
The cardinal virtues comprise a quartet set of virtues recognized in the writings of Classical Antiquity and, along with the theological virtues, also in Christian tradition. They consist of the following qualities:
Prudence: also described as wisdom, the ability to judge between actions with regard to appropriate actions at a given time
Justice: also considered as fairness, the most extensive and most important virtue; the Greek word also having the meaning righteousness
Temperance: also known as restraint, the practice of self-control, abstention, discretion, and moderation tempering the appetite; especially sexually, hence the meaning chastity
Courage: also termed fortitude, forbearance, strength, endurance, and the ability to confront fear, uncertainty, and intimidation
These virtues derive initially from Plato’s scheme, discussed in Republic Book IV, 426-435. Cicero expanded on them, and Saint Ambrose, Augustine of Hippo, and Thomas Aquinas adapted them.
You’re probably already seeing how focusing on these virtues would lead to personal and professional success in modern life. Let’s give each virtue a bit of individual attention and figure out what it means today, how it can help with your financial and personal and professional standing, and how you can grow that virtue in your own life.
Prudence refers to the ability to govern oneself through reason. As described above, it’s the ability to judge between actions with regard to appropriate actions at a given time.
My perspective on prudences is, in practical terms, being able to judge which of the choices before you offers the best net benefit for your life, both short-term and long-term.
Whenever I make a judgment call between buying two different products or buying nothing at all, I’m using prudence. Whenever I’m deciding how to use an empty hour of my time, I’m using prudence.
To many, this may seem like a natural thing, but what often happens is that people make comparative choices based on faulty reasons. Part of prudence is actually understanding what the true benefits and drawbacks are for the options in front of you. In order to truly cultivate prudence, you need to have a strong understanding of what the value of various things are in your life over a longer period than just your immediate desires.
That’s why prudence sometimes gets a bad reputation in the context of the modern world. For many, prudence often means caution because it often tells people that there isn’t enough value in a particular course of action to be worth the risk or the drawbacks. To people without any sense of prudence or people who are inflating the momentary value of something, prudence can look like an overabundance of caution.
To them, I say so what. You have to make your own choices about what you value and about how to maximize that value.
Let’s look at cultivating prudence in your day-to-day life.
Four Strategies for Cultivating Prudence
Stop worrying about what other people think, especially people you don’t know or barely know. We often drastically overvalue what others think of us. We fall prey to the spotlight effect and believe that others are thinking of us when they’re not. Even when they do think of us, those thoughts are often so shaded by that person’s own experiences that there’s very little we can do shape it without building a long term relationship with that person.
So don’t worry about it much at all, particularly with regards to people in passing. Be polite and don’t intentionally attract negative attention to yourself, but don’t waste a second of your time and money trying to make people be impressed by you. The only kind of “impressed” that matters over the long term are matters of character anyway.
Think about the benefits and drawbacks of recent choices you’ve made when you’re outside of the situation, and don’t be afraid to criticize yourself or conclude that you made the wrong decision. For example, let’s say you were in a bookstore and impulsively decided to buy a book. That may or may not have been a good choice, but it’s pretty hard to really decide that when you’re standing in a bookstore, which is an environment cultivated to persuade you to buy that book.
Instead, think about that decision later on, when you’re out of the bookstore and the “happy glow” of the purchase has faded. Did it really make sense to buy that book? Why or why not? Did the drawbacks – the spent money, for example, or the fact that you could get the book at the library – outweigh the benefits?
People often say “don’t give it a second thought,” but prudence is really built on the back of doing just the opposite of that. Give your actions a second thought or even a third one. I often practice this while driving somewhere as it gives my mind something to think about and improves my reasoning when it comes to making choices in the heat of the moment.
Give a lot of consideration to the long term benefits and drawbacks to your choices, as most people tend to think mostly of the short term. Humans are naturally short term creatures and thus, when we’re evaluating something, we tend to overemphasize the short term benefits and drawbacks and minimize the long term benefits and drawbacks. One thing we often do is push the drawbacks far down the road as an excuse to reduce their weight on the current decision; for example, we’ll put an expensive purchase on the credit card so we can minimize the negative short-term impact of the purchase.
In order to really give decisions a fair shake, you have to break that habit of minimizing the long term. One tool I find really useful for this is to figure out your true hourly wage and use that as a comparison tool. “If I buy this, I’ll basically have to work thirty more hours to make up for it… is it really worth thirty hours of work?”
Establish goals for yourself, so that you have a stronger sense of many of the benefits and drawbacks that may come from the choices you make. This is another tool I use to bring the long term into my decision making process. I maintain some real tangible goals for my life, both short term and long term, and I often evaluate decision based on how they’ll impact that goal.
For example, let’s say you have a long term goal of simply maintaining your weight and current fitness level. You’re at a restaurant and have some choices on the menu – a really tasty and unhealthy and expensive dish and a somewhat less tasty but much more healthy and less expensive dish. Which do you choose? If your goal is truly important to you, having that goal adds a lot of weight to the side of the less expensive dish. Without that goal, it becomes much more of a toss-up.
Justice is simply the administration of fairness, which might seem like a strange concept to talk about on a personal finance site. Fairness? How does that connect to anything in finances?
I think it’s easier to see this when you flip it on its head. The opposite of justice is injustice and unfairness. Unfairness comes from situations where someone involved in the situation is not being impartial and are incorporating other values largely unrelated to the situation.
People often like to say that “life isn’t fair,” and that’s absolutely true. It isn’t fair. At the same time, people want to be treated fairly. That’s the attraction to justice. People want justice for themselves and often want it for others.
That’s why, over time, people that seem fair to others tend to build a strong social network. They’re respected in the community by everyone. You probably know a few people with a strong sense of justice who typically are fair to everyone around them – and the truth is that you probably think highly of those people. To use an example, Fred Rogers is probably as close to a universally loved person as there can be and a big part of that is that he embodies a gentle form of justice. When you think of the idea of “fairness,” it applies so strongly to Fred Rogers that you’re probably nodding your head as you think of it.
Having a strong internal sense of justice and living by that internal sense in every waking moment is going to build a positive reputation for you, one that permeates throughout all of your personal and professional relationships. It will help you in times of personal need, help you to build your career, and help you to have an amazing social circle to boot.
Let’s look at cultivating justice in your day-to-day life.
Four Strategies for Cultivating Justice
Expose yourself to lots of different life situations. Everyone has different lives. We’re exposed to different things on a daily basis and those situations often go a long way toward shaping how we judge things. We build up biases over time, both good and bad.
The catch is that the less exposed we are to how someone else lives and the issues that someone else has to deal with, the easier it is to build up a false sense of justice. We’re already experts on the rights and wrongs of our own life, but how do we know that those rights and wrongs apply to someone else’s life?
For example, I live next to a single mother. I know her life is challenging and I also know she’s doing an amazing job of raising two young women. Having said that, I sometimes personally feel that too much responsibility in their household is shouldered by the older of the two daughters. That judgment is entirely based on my own experiences growing up and as a parent as well as my fairly limited observations of what’s happening over there. But is that judgment fair? When I actually look closer, what I truly see is that both of the young women in the house are very responsible people and they’re growing into magnificent adults. They’re just following a path to get there that’s different than what I expected.
While you’re doing this, look for situations where you have an instinctively negative reaction or an overly strong positive reaction. Those are biases and it’s almost always beneficial for you to dig through those biases and figure out why you have them and whether they really make sense.
Ask yourself why you react to situations in the way that you do. Let’s look again at the situation of the mother and two daughters who live next to us. My initial poor judgment of their situation was based on a very small number of observations, ones that didn’t match what made sense to me about children of a particular age and their parents. However, when I look closer, what I see is that the child actually has a different personal character than what I expected. She’s grown up and adopted a higher level of maturity than I would have expected for her age.
When I first looked at their family, I expected them to match the childhood and parental experiences that I had, and when it didn’t match, I immediately assumed there was something bad about it. That kind of assumption is rarely true. Just because something is different doesn’t mean it is bad. My bias here was that I was thinking of a family situation in a somewhat negative way simply because it didn’t match my own. That’s obviously unfair to that family.
You can go through a similar process for any of the negative or overly strong positive reactions that you notice within yourself. Why did you have that reaction? Look closer and ask yourself if it really makes sense.
When you figure out biases that you have, learn more about them and figure out whether those biases actually make sense. Rather than simply persisting in my sense that the family next door is doing something wrong, not only did I look a little closer, I did some reading on the realities of single parent households. What I learned is that the dynamic in such homes is often different than two parent households, but not necessarily bad. As a matter of necessity, the older child is handed more responsibility at an earlier age in many single parent households, and a good single parent can often cultivate that situation into raising some outstanding children.
My initial observation of the oldest child handling a great deal of responsibility felt negative, but as I learned more, it turned out to be neutral at worst and most likely positive.
Think about the biases you thought about above. Look closer at them. Do some investigation from outside your normal areas. Watch and learn without judging.
Actively work on eliminating your negative and unhelpful biases. If you find that you’re being unfair toward something in your own judgment – whether overly positively or negatively – try to actively work against that bias, particularly within your own mind. Choose to do things that you would do if you didn’t hold that bias at all, or even slightly held the opposite view.
Quite often, you’ll find that bias melting away.
Restraint. The practice of self-control. Abstention. Discretion. Moderation tempering the appetite.
Those things probably don’t sound like fun. They cultivate images in your mind of things like a strict diet or a religious discipline.
When I see them, however, what I see is a tool that I can use to find a better way to live.
I’ll give you an example: a money free weekend. The idea is simple: you just avoid spending any money outside of absolute emergencies from the time you get off work on Friday to the time you return on Monday. Ideally, you also minimize the amount of already-bought resources that you use, like gas in your car.
It’s a challenge, to be sure. It absolutely requires temperance to make it work.
However, along the way, you start to learn things about yourself. You discover many new things to do that you may not have tried before. You discover that you really can live without other things that were otherwise just part of your routine. You also discover that you have internal strength. You can do this.
Temperance doesn’t just mean making a hard choice right now. It also means making that hard choice easier going forward because you usually realize that the hard choice wasn’t as hard as you thought.
Let’s look at cultivating temperance in your day-to-day life.
Four Strategies for Cultivating Temperance
Try some “thirty day challenges” on for size. A “thirty day challenge” is almost exactly what you might expect. It simply means that, for one month, you’re taking on some sort of personal challenge or change in your life.
For example, you might choose to eat vegetarian for thirty days. You might choose to spend no money at all on hobbies for thirty days. You might choose to stop going to the coffee shop for thirty days.
The purpose of such challenges isn’t to permanently eliminate a behavior from your life, but to cultivate a stronger sense of moderation of that behavior. You’ll go to appreciate it more and you’ll also grow to understand that spreading it out increases your enjoyment rather than reduces it.
(You can also use thirty day challenges to build new positive routines, like an exercise routine, of course.)
Put an overall budget on your weakest spending area. Look for the areas in your life where you tend to make the most reckless spending choices, then put a budget cap on spending in that area. For me, that would easily be hobby and entertainment spending.
Simply say that, for the next few months, I’m only going to spend, say, $50 or $100 on going out on the town. You can spend that $50 or $100 however you like during that month, but once it’s gone, it’s gone.
Perhaps you’ll go out less often. Maybe you’ll find less expensive things to do when you do go out. What you’ll find, though, is that it’s not as hard as you think and that you’re getting more value out of each choice, which is really the goal of temperance.
Intentionally try new things that feature some attribute you’d love to cultivate in yourself. We all have positive traits that we’d like to cultivate in ourselves, but there’s always a reason not to do it. It’s hard. I don’t have the time.
Ignore those things for a while. Intentionally try some things to cultivate that attribute that you want. That might mean giving up some other things for a while. It might mean seriously challenging yourself.
In doing so, though, you’ll find that giving up smaller things for something important to you is often incredibly worth it once you get going.
Say “no” sometimes, even to friends. One of the trickiest parts of temperance is the simple act of saying “no” to others. A person might have decided to cut back in some area of life, but when a friend or even a random person invites you, it’s hard to say “no.”
Practice it. Figure out how to say “no.” It’s hard, of course, but most things in life worth doing are hard. Beyond just saying “no,” find ways to redirect that request into something else. If a friend wants you to go out, redirect that into something else if you’re trying to practice temperance regarding nights out on the town, for example.
Courage is perhaps the most important of the four cardinal virtues when it comes to personal finance and professional growth.
It takes courage to take on a big challenge. It takes courage to keep following through, even when it’s hard. It takes courage to stand up for something when the social order in your life is against it. It takes courage to create change in your life. It takes courage to not do things in the way that society encourages us to do them.
It takes courage to be financially responsible, in other words. It takes courage to be frugal. Society works against those things. The social circles of many people do, too. Often, our own conflicting desires work against it, too.
Let’s look at cultivating courage in your day-to-day life beyond the obvious mantra of “just do it.”
Four Strategies for Cultivating Courage
Don’t instinctively say “no” to something difficult; consider it rather than reflexively avoiding it. We often just react with an immediate “no” to things outside of our comfort zone. When we feel that way, one of the most courageous things we can do is stop for a minute before responding in the negative and really think about that choice.
Rather than letting the negatives just blow away the positives immediately, stop and focus on the positives of taking on this challenge.
I’m reminded of my mother, who had wanted to visit Niagara Falls for many years. She has an intense fear of heights, however, and crossing the walking bridge to get to the Maid of the Mist boat tour of the Falls filled her with an intense fear and at first she instinctively said, “Nope, not doing this.” However, she followed that up with courage. She stopped for a few minutes, thought about the positives and negatives, and then bit her lip and crossed that bridge. The tour turned out to be the highlight of her entire trip.
Talk to yourself with positive words, not negative and fearful ones. When you tell yourself “no” and “I can’t do this” and “I’m going to fail,” you’re reacting with pure emotion and creating completely imaginary reasons to back away from a challenge. Negative words create a false “con” when you’re listing the pros and cons of a choice and can push you away from something worthwhile.
Instead, think of a personal challenge with positive words. Think of the benefits of actually doing it. Tell yourself that you can do this. Tell yourself that you’re going to succeed. Tell yourself that even if you fail, it doesn’t really matter much at all and that trying matters much more than that (which is almost always true).
Negative words add a “con” to any sort of pros and cons list; positive words add a “pro.” Neither one is real, so try adding “pros” to the equation rather than “cons.”
Take small steps at first and see the positive results. If you’re new to climbing a mountain, don’t head to Everest. Instead, climb some tall hills first, then perhaps a small mountain. Work your way to the big challenges.
The same thing is true for almost every challenge you might face in your life. Focus on small steps rather than big ones. Sure, it might be the first step in a long journey to achieving the big goal, but make that your focus, not the giant goal.
I often like to take my biggest goals – the ones that seem impossible – and break them down into smaller and smaller and smaller pieces until that first step doesn’t seem that scary, at which point I can muster the courage to take that step. The courage for each step after that is easier to muster.
Identify and kill procrastination. Procrastination simply means that you’re taking a challenge and choosing to wait until later to deal with it. In other words, it’s a rather uncourageous way to deal with a challenge in front of you.
Whenever you find yourself putting off something that you could do right now, stop and ask yourself why you’re delaying. Are you really doing something else worthwhile instead? If you’re not, why are you delaying this task? Why not do it right now?
If you spend time cultivating the four cardinal virtues in your life, you’re going to suddenly find it much easier to achieve financial success. It suddenly won’t seem nearly as hard or nearly as scary to cut back on your spending or to start investing. You’re going to find that you have new goals and new approaches to almost everything in life. The benefits go far beyond finances.
For many, sincerely adopting these virtues can be a challenging change – but it’s a really worthwhile change. It makes every obstacle in life so much easier if prudence, justice, temperance, and courage comes straight from the heart.