Simple Money: A No-Nonsense Guide to Personal Finance - Tim Maurer (2016)

Part I. PLANNING FOR LIFE

Chapter 2. VALUES: Three Questions to Guide You

WHY do I need to read this chapter?

The whole notion of values is a touchy subject because it’s so hard to grasp. What exactly are values?

The term means different things to different people. To some, values are the pillars of existence, while others view them as a collection of subjective mores used by the former group to judge everyone else. But if we strip this concept of its rhetorical baggage, I believe we do find something of great, uh, value.

Our values are simply the stuff in life that we want to be about. That which we want to define us. The guideposts we choose to live by.

They are the priorities that we hope will mark our time on this earth. They are the elements of life that motivate us; that when satisfied, bring us genuine contentment. Enough.

They are neither universal nor constant. Our values may, indeed, change as we change, but they are also not fleeting.

Values are critical in financial planning as anchors for our goals and boundaries for the actions we take to achieve them. But most of all, they make the hardest decisions in life much easier by helping us prioritize what truly is the most important.

Understanding what you value most will help simplify even the most complex financial decisions.

Virtue and Vice

Perhaps the most famous articulation of one’s values belongs to founding father Benjamin Franklin. At the age of twenty, Franklin created a system to help shape his character. Indeed, Franklin described the purpose of his system, based on a list of his “Thirteen Virtues,” and his attempted application of it in his autobiography.

He lists a single word followed by a clarifying sentence. Here is a sample:

1. Temperance: Eat not to dullness; drink not to elevation… .

4. Resolution: Resolve to perform what you ought; perform without fail what you resolve… .

7. Sincerity: Use no hurtful deceit; think innocently and justly, and, if you speak, speak accordingly… .

11. Tranquility: Be not disturbed at trifles, or at accidents common or unavoidable.1

While Franklin’s virtues have been used as the foundation of many values-oriented habit generation systems—most notably international leadership authority Stephen Covey’s—I believe we benefit more from seeing how Franklin failed than how he succeeded. In conceiving the Thirteen Virtues, Old Ben dedicated himself to, in his own words, “the bold and arduous project of arriving at moral perfection. I wish’d to live without committing any fault at any time; I would conquer all that either natural inclination, custom, or company might lead me into.”2

The result? “I was surpris’d to find myself so much fuller of faults than I had imagined,” Franklin confesses.3

Has this been far from your experience, when attempting to conform to any personal or financial ideal? It certainly has been mine, and I believe it is the top reason that so few resolutions are indeed performed “without fail.” How frustrating it is to see our efforts toward self-improvement more expedient at revealing our vices than our virtues.

Therefore, any effort to establish a set of ideals—virtues or values—to which we align ourselves and our money must be accompanied by an allowance for imperfection, which is both universal and constant. Then, like Franklin, instead of abandoning our resolve to eliminate our faults, we might at least “enjoy the satisfaction of seeing them diminish.”

“I can’t get no …”

Yes, satisfaction is what we’re after, because satisfaction leads to contentment and toward the elusive Enough. So let’s conduct a quick experiment in satisfaction. The objective is to gauge your level of satisfaction in several areas of life—not just the financial realm. This is beneficial for many reasons, but especially because money touches nearly every facet of life, like it or not.

Wheel of Life

The Wheel of Life instructions are, dare I say, simple. You rate your satisfaction in each area of life between 0 and 10. Zero is the worst, represented as the center of the wheel, and 10 is the best, at the end of each spoke. After you plot your satisfaction for each facet of life, then connect the dots to behold the size and shape of your wheel. Go ahead, give it a whirl!

The Wheel of Life has many applications, but the primary aim of this exercise in self-awareness is to “put money in the context of life,” according to Carol Anderson of Money Quotient.

It’s almost impossible to complete this exercise, as I regularly do, without generating some lightbulb moments. “Ooh, interesting …” “Ahh, disappointing …”

But the exercise goes beyond mere contemplation and begins to unveil some of those things that we value most. Of course, there may be some spokes on the wheel where you feel quite satisfied, perhaps because they’re important to you and your appreciation, therefore, shows in your performance.

Now consider those areas where you rated your satisfaction as subpar. Is it possible that you score yourself lowly in these areas because you actually value them a great deal? Perhaps these are important areas of life that are simply being overwhelmed by the tyranny of the urgent.

Franklin’s Failure

Franklin failed to attain perfection in his behavior management system in part because of his inherent imperfection, but also because of misplaced motivation, which is a topic we’ll explore in detail in the next chapter. He directly acknowledged as much: “My list of virtues contain’d at first but twelve; but a Quaker friend having kindly informed me that I was generally thought proud; … and I added Humility to my list,” later lamenting, “I cannot boast of much success in acquiring the reality of this virtue.”4

He couldn’t even avoid using the word “boast” in admitting his inability to conquer pride! And while I would agree with Franklin that humility is an admirable trait to work toward regardless, it’s quite possible that his virtuous success rate may have been higher if the values he listed were those he felt impelled—not compelled—to list.

How, then, should we discern our uniquely personal picture of values and ensure it remains untainted by those bent on compelling us into conformity? While some may be inclined to commit themselves, as Franklin did, to authoring a linear list of thirteen ideals followed by a tactical plan for accomplishing them through goals, others may be inclined to list only three, or none.

Or better yet, forget lists and collections altogether. I’m convinced that the most vociferous proponents of lists and goal setting are the analytically oriented who are predisposed to these methods. It may be more helpful, and no less effective, for you to communicate your values through a collage of pictures, a song, or a story.

Kinder’s Three Questions

Consider George Kinder’s method. Kinder is a Harvard-trained economist turned philosopher turned accountant turned spiritual-teacher whose work on the intersection of money and life is very well respected, even in the financial industry.

Kinder, elsewhere and in his book The Seven Stages of Money Maturity, introduced the world to a new way to explore our values, especially as related to our finances. It involves simply reflecting on three questions that dig into our deepest motivations. Please respond to each in order, ideally in writing, and then we’ll reflect together.

Kinder’s Three Questions

Question One: Imagine that you are financially secure, that you have enough money to take care of your needs, now and in the future. The question is,

How would you live your life?

What would you do with the money?

Would you change anything?

Let yourself go. Don’t hold back your dreams. Describe a life that is complete, that is richly yours.

Question Two: This time, you visit your doctor, who tells you that you have five to ten years left to live. The good part is that you won’t ever feel sick. The bad news is that you will have no notice of the moment of your death.

What will you do in the time you have remaining to live?

Will you change your life, and how will you do it?

Question Three: This time, your doctor shocks you with the news that you have only one day left to live. Notice what feelings arise as you confront your very real mortality. Ask yourself,

What dreams will be left unfulfilled?

What do I wish I had finished or who do I wish I had been?

What do I wish I had done?

What did I miss?

Now, let’s consider the implications of each of these questions and how they’re designed to draw valuable information from us.

In Question One, Kinder first strips life of its financial stressors. But notice, this isn’t the same as asking, “So, if you won the lottery, what would you do with the money?” He’s asking what we would do with life if money was no issue. He tries to bring us to a hypothetical state of contentment when he says, “You are financially secure … you have enough … now and in the future.” No surprise, eh, that we’re back to the subject of Enough?

Then, before asking what we’d do with our money, Kinder invites us to explore how we would live our life. He gives us a moment to consider how we’d handle the money, but then we wade into much deeper waters—“Would you change anything?”

I find that the answers to Question One are often a rephrasing of what our most important goals are, a topic addressed in depth in the next chapter. But now, in Question Two, Kinder takes off the gloves.

Perhaps you tuned out as soon as you got into this question. Most people don’t want to think about being put in this position. Maybe this struck too close to home because you or a loved one has endured the I’ve-got-some-bad-news discussion and its aftermath. If so, I encourage you to consider that these questions are far more about life than death.

The first time I read Question Two, I approached it too literally. Most people, I retorted internally, can’t just decide (or afford) to live life as though they knew they were going to die within the next ten years! But then I realized that the point of this query is simply to evoke a better answer to the question, What are your most deeply held values? Many of us will start talking about family, relationships, and bucket-list items. Another purpose of Question Two is to prepare us for the third question.

If you really engage Question Three, you’ll get beyond superficial answers and start to unveil what really drives and motivates you. Unlike the second question, where there might be some overlap between your answers and those of other people, the third question begins to elicit longings that are unique to you.

Your Life’s Priorities

As you consider your answers to Kinder’s questions and revisit your Wheel of Life, what comes through as that which you most value—your life’s priorities?

Please consider that if you have too many, then nothing is a priority. I challenge you to keep the number of priorities small—no more than seven, maybe fewer.

If lists don’t suit you, try writing a statement, sentence, or paragraph to express what is most important to you. And if you, like me, are a visual person, I encourage you to create a collage of pictures or drawings representing your primary motivators. Keep it in your home or office as a vibrant reminder. (See a great example from author and early Twitter hire, Claire Díaz-Ortiz, on her website.5)

However you arrange your priorities, it is vital that they are prioritized. None of us can attain everything we desire in money and life in an instant. Both our financial and human capital are finite. We can’t have it all, all at once.

Although prioritization might be the simplest tool in this book, it is actually the most powerful and perpetually useful, because most of the decisions we make in financial planning ultimately come down to effective prioritization. And it’s satisfaction in the areas in life we deem most important that lead us to Enough.

Priorities take the guesswork out of difficult decisions and give us confidence in setting the goals we’ll work toward, the subject of our next chapter.

1. Understanding our priorities, or values, helps to guide our planning and make life’s most complex decisions simpler.

2. Ben Franklin’s “Thirteen Virtues” exercise for patterning his life after what he valued most teaches us a great deal. But we learn more from how (and why) Franklin failed than how he succeeded.

3. Your completion of the Wheel of Life and your answers to George Kinder’s Three Questions are incredibly effective tools in determining the aim of this chapter—spelling out your true priorities in life.