Get Rich…Honestly!

coconutsI take it as given that we all agree the path to Financial Independence should not include shoplifting, fraud or mugging little old ladies.

But let’s take the concept of honesty a stage further.

I have been experimenting recently with Radical Honesty.  This means saying everything you think, without stopping to worry how people will respond.

I got this idea from a James Altucher podcast with AJ Jacobs.  Jacobs experimented with living radical honesty for a month and wrote an Esquire article titled I think You’re Fat which I highly recommend – its very funny and thought provoking.  Jacobs estimated he reduced the daily lies he told by about 40% but quickly realised that you can never achieve 100% honesty without social ostracism.

Back at work, I often used to be sat in a meeting, people would be prattling on and someone would ask me what I thought.  I always resisted the temptation to give a 100% honest answer. This was probably for the best.  If I had been radically honest I might have said something like:

Well, to be honest I don’t really want to be here. I’m bored and thinking about what would happen if I stapled Joe’s tie to the desk…or threw a chair through the window…or what Sophie from marketing would look like wearing only coconut oil and a smile.

This type of honesty is career limiting and is not recommended when you are still in the wealth gathering phase in the Prison Camp.

I don’t think true honesty is ever possible in an employer: employee relationship where the employee needs the job.  In the Prison Camp we learn to laugh at the boss’ jokes.  How can an employee ever be fully honest in a relationship where they can only service their mortgage if they keep their job?  I think of pure honesty as being like pure freedom – its a luxury good that you can only really afford when you are financially independent.

There is a place for lying. Lies are needed to spare other people’s feelings.  Little white lies are at the heart of all etiquette and polite communication.  The more polite you are, the more likely you are to tell well-meaning lies.  I can tell you from experience that above average honesty can often be taken as above average rudeness.

I break down honesty into 2 parts: Truth and Openness. Truth is simple. A statement is either true or false in the same way that you are either pregnant or you’re not.

Openness is harder to measure objectively.  Its how much of our inner thoughts we reveal to the world through our words and actions.  Its about volunteering more information and removing the filter between what you think and what you say.

Openness to others implies vulnerability.  By revealing more of our innermost thoughts than before, we are taking emotional “risks” and relying to some extent upon the basic kindness of (most) other people.  When you are open about your flaws and failings, you are acknowledging your vulnerability.  Being able to do this is actually a sign of strength.

I have always been a (relatively) truthful person but for years I was terrible at openness. In my defence, I started with the disadvantage of being a straight white British male, vintage 1970.  But this blog is all about overriding our evolutionary biases with a little bit of personal growth.  Its always possible to raise your game, particularly when it comes to openness.

This goes hand in hand with being less worried about what other people think about you.  There is a great phrase that goes something like: when we are 20 we worry about what people think of us, when we are 40 we stop worrying what people think of us and when we are 60 we realise those other people were never thinking much about us.  They were too busy worrying about themselves.

I hope you can see the links to financial independence here.  A huge part of the journey to FI is getting comfortable with following our own path and stopping worrying about what everyone else around us is doing or thinking.  Everyone focusses on the money part of the journey to FI and that is understandable. But having enough money is necessary but not sufficient. You are also have to be honest with yourself about what motivates you.

One of the books that helped me with my own lightbulb moment on the road to FI was The 7 Habits of Highly Effective Peopleby Stephen Covey.  Covey recommends we should live in accordance with our core beliefs to remove any dissonance between our inner thoughts and our daily actions.

Financial independence

This is not Bluewater

For example, as someone that believes in living more naturally, it felt better to buy my Christmas tree from my local forest rather than driving to a mall to buy some plastic shite from China.

Reading the 7 Habits helped me towards a more honest approach to every aspect of my life.  It was a relief to stop prioritising beliefs and actions pushed at me by other people: advertisers, clients, work colleagues, even well-meaning family or friends.  I saw that my priorities had become misdirected whilst in the Prison Camp and needed to change.

My favourite TV programme of all time was the US series House where Hugh Laurie plays a genius doctor with a poor bedside manner.  One of House’s catchphrases is “Everybody Lies”.  He takes patient histories but doesn’t naively assume that the patients are being truthful.

House puts results above everything else.  To get these results, he frequently plays games, manipulates and tells lies but is ultimately redeemed by a strong underlying integrity and set of ethics. House is a flawed character but is always ruthlessly honest with himself and ultimately with the people he cares about.  Similarly, The Escape Artist may tell the occasional little white lie (oops…there goes another one) but I am always ruthlessly honest with myself, particularly about money.

Most people lie to themselves about money. They tell themselves they can afford that wide screen TV (when they actually mean they can borrow to buy it). They tell themselves that they are “worth it“.  But if you think about it, saying you are worth as much as a small plastic bottle of shampoo is setting the bar kind of low.

People that run up debts are not being honest with themselves.  If you have to borrow to buy something* that means you can’t afford it.  Debt allows us to lie to ourselves and, by implication, to others about what we can afford.

Most people driving around in a Maserati or Mercedes bought on finance are misrepresenting their net worth to others. Imagine if there was a law saying that cars bought on finance had to have a notice painted on them – a bit like a health warning on a box of cigarettes.  This might say something like “This car is not owned by the driver. The bank is just renting it to them. He / she is living above his / her means but wants you to think they are wealthy so they appear more attractive / successful“.  The car finance market would dry up overnight.

In surveys up to 90% of people consider themselves better than average drivers, friends, investors or lovers. This can not be true. Unlike people, numbers and logic do not lie.

Almost the entire active fund management industry is based on a form of dishonesty – the idea that it is possible for most people to outperform the market.  Simple logic dictates this can not be the case. If active fund managers were honest, their advertisements would say something like:

We know that your returns after our fees will on average lag those available from a low cost index tracker.  We are going to make only token efforts to beat the index and will not try so hard that we ever risk doing something different from the herd and hence losing our cushy jobs.  Lets face it, most years we are going to fail miserably whilst continuing to collect a salary that is about 10x greater than that of our average muppet client.

The idea that we can avoid mistakes in investing is intellectually dishonest.  Yet when did you last see a fund manager fessing up to mistakes and giving equal prominence in their investor newsletters to the “problem children” stocks in their portfolios as to the “stars”? If people were honest about investing they would acknowledge that the emotional side of investing are as important as the intellectual aspects.   Applying the insights of behavioural finance requires honesty and self-awareness.  Once you have recognised this, most good investing boils down to avoiding doing stupid things driven by emotion.

We can all move along the spectrum towards fuller honesty. For me, part of this is being open about how and why I got to FI.  Everything on this website is as honest as I can make it at this point in my life.

This includes being open about my underlying motivations for financial independence. Being honest, fear was the main driver in my achievement of FI.  I was blessed or cursed with an irrational fear of poverty which is, I think, part inherited and part down to my childhood.  Because of my irrational fear of ending up poor and eating mouldy catfood out of the tin, I always found saving and frugality natural, almost therapeutic.  I have now mostly ditched the fear but I still get twinges.

I now enjoy people’s reactions when I say stuff that is unusually honest and open.  I’ve found that most people react positively to this and respond in kind. You then both gain better quality interactions from that point onwards.  A minority (the more emotionally repressed) get a bit uncomfortable when confronted with openness.

The City is full of outwardly successful people who are deeply fucked up, having devoted their entire life to money and lost sight of everything else.  Its funny to watch these people look awkward when I use the phrase “my Journey” (and I’m not talking about the 6.28am into London Waterloo) or being “in the moment”.  I haven’t read any Zen Buddist texts yet, but I reckon a few choice quotes would allow me to tease these people even more effectively.

* except a house, combine harvester, computerised lathe or other big ticket productive asset that can hold / create value

18 comments

  1. Great article. Conspicuous and/or invidious consumption certainly seems to account for a lot of behaviour in modern society. And you’re quite right to point out that the workplace is not a terribly sympathetic environment in which to practice radical personal honesty, although I’m certainly giving it a shot. My current pet hate is the culture of “undisclosed busyness” whereby my colleagues across the business adopt this rhetoric by default as if to make themselves seem indispensable (but never disclose what or why). Parts of the business are way below target but I still never encounter anyone with capacity. Fear, I guess. Anyway, I’ve started to say things like. “No, I’m not too busy – worked quite effectively last week and finished at a reasonable time…” or some variation on that theme. I don’t think they know how to take it.

    1. I like your style and your comment re workplace busyness….that phenomenum deserves its own separate article. In a rational world, a promotion should soon beckon for you given your willingness to take on more work and new challenges. Although justice is not always done in all cases in the Prison Camp, common sense usually prevails in the end…I wish you all the best!

  2. Hah… loved the follow up post and thanks for tipping me off about it in the comments.

    Reminds me of those “What if advertisements were really honest” viral things that went around years ago with pictures of obese and ill people advertising McDonald’s etc…

    I wonder how many lies I tell a day, I would like to believe it is less than the average person as I hold being as honest as possible as a core value, but I reckon it would be quite shocking to count it up and check at the end of an average week. I feel an experiment coming on here 🙂

    As you point out not all lies are created equally, there are plenty of small white lies flying about so as to avoid hurting peoples feelings, but what annoys me is those that are completely two faced and are almost overly nice to people and then slate them behind their backs (full disclosure, I obviously have done this before on the odd occasion in my life! Who hasn’t, right? Right?!). I think in general, if you are going to tell the small white lies to someones face, you should shut the hell up about them when they are not present as well. Maybe there are some exceptions to this rule I can think about though… hah 🙂
    Likewise there are situations where you have information that you need to withold, this could be proffesionally or you are in a conundrum whereby a friend has entrusted you to personal information, it would be far more wrong to go blabbing around a friends secrets in the name of honesty, than keeping schtum, obviously!

    Great article as usual and one that has made me think about my own levels of honesty and openness. I am basically at the point of not giving a hoot about my role in my current prison camp so now is definitely the time to practice a bit of RPH in the workplace to see how it goes down. I’ll let you know when the results are in 😉

    1. TFS – I and (I bet) a lot of others would love to hear about your own Radical Personal Honesty experiment so why not try it for a month and then write about how it goes on your blog?

      Please let us know how you get on. Be brave….but please don’t get yourself fired (at least not until you are ready!)

      1. Good idea TEA. I am having important discussions at the moment with employers right now in fact, and I have been more honest with them. I will definitely be blogging about it soon when I know the outcome, so watch this space. Hopefully it won’t end up with me being fired 🙂

  3. Now that we are being open and honest…. what do we do about the ‘energy vampires’?

    I have found there is a small minority of people who repeatedly talk about how down trodden they are. When are offered open and honest guidance and support, they ignore it. Worse still, the advice has merely identified someone who has shown interest in their problems – a good source of energy for them to suck dry – they will be back with the exact same moans next time.

    The problem is, energy vampires are teflon coated. Even the most brutal honesty doesn’t bother them, it just confirms they still have their prey.

    Is there an 11 on the honesty dial I have yet to discover?

    1. I think you may be referring to what MMM calls The Complainypants. Complainypants break down into 2 categories:

      1) Those who are basically good people but who’ve been beaten down by life in the Prison Camp. I think we should try to help lift those people up….perhaps by writing a blog that tries to mix a dash of empathy with some common sense. We are better able to do this when we are in good shape ourselves….see The Pyramid and the Oxygen Mask.

      2) A hard core of evil vampires for whom the only answer is keeping as much distance as possible between them and us. And keep a gun with Teflon penetrating silver bullets handy if those motherfuckers get too close.

      1. This reminds me of a training course I attended. If you get dragged down by ‘complainypants’ work colleagues that always moan at you – just smile, listen politely then say ‘Fantastic’ and walk off. Let it wash over you and get on with something more interesting instead.

  4. Hi TEA

    Love your idea of the sign on the side of a car to point out that the driver is trying to make them appear to be someone that they aren’t. Of course the really sad thing is that they actually believe that the flash car does make them appear more attractive, when in reality it makes some people think they have an impressive wallet, and will bullshit them to get them to open it on their behalf.

    I also relate to Sean’s term of “undisclosed busyness”, the company I work for is chock full of people who think that it would fall apart without them, I know the business will not even notice me when I am gone, and nor should it unless it is a one man band.

    Best Wishes

    p.s I drive a fully owned 9 year old car, and intend to keep it so long as it continues to efficiently perform its function of getting me and Mrs FIUK from A to B and back again.

    1. FIUK – yes, lets call that car of yours 9 years young…and if it ain’t broke…

  5. I have come to realize that index investing is the best way for the average investor to go. I think people get excited when they see people getting rich by picking the right individual stocks, but what they don’t realize is that that takes a lot of time and education to be able to outperform the market. That’s why most people can’t do it.

    1. Yep, completely agree…effective stockpicking takes an amount of time, experience and emotional equanimity that most people don’t have.

  6. Being honest, fear was the main driver in my achievement of FI

    Yep didn’t want to leave you swinging in the wind by yourself with that one. Found myself out of a job on two occasions, both times within a few months of getting a mortgage and having a child. Despite having a prudent years worth of emergency cash, rationality goes straight out the door under those conditions to be replaced by a bitter sense of failure, depression and anxiety. Unfortunately it’s a bit of a vicious cycle as your emotional well being becomes evermore messily entwined with being in work, even though work is the last place you are going to find it.
    I’ll never underestimate the power of fear, or stop despising those that ‘spice up’ the workplace with it, even though it gave me the impetus to get out and away. The bastard is, with hindsight I didn’t need to be FI to be free of it, so I’ll not be handing out advice 🙂

    1. Now THAT is what I am talking about, Nathan. Sounds like you have an interesting story….it’s a shame you say you wont be handing out any advice, cos I reckon readers would love to hear a bit more about how you turned things around…I know I would…

  7. Interesting stuff. I’m definitely not trying the full-blown version of this from the Esquire article until I hit FI! (If ever.) I suspect I’ll find myself paying a bit more attention to myself and noticing when I’m lying for the next few days though.

    I’m torn as to how to handle the little social lies. I mean, sure, when my friend’s telling me a tedious story about something at great length, I could tell him to STFU. But I want someone to let me tell them *my* tedious stories at great length, so it’s a quid pro quo. And yeah, maybe it’s a shame if we’re both just being polite and/or manipulative, but on the other hand, where else are we going to satisfy our need to tell these tedious stories to someone? I suppose I view friendship, in part, as a mutual therapy kind of deal, where you pay in time and attention instead of currency.

    And there is usually some interest in the story, it just gets diluted somewhat by being told at great length. Taken to extremes, radical honesty could make any kind of meaningful conversation impossible, as if you got bored for even five seconds, you’d pull the trigger on the whole thing. A kind of stereotypical TV channel surfer who never persisted with any social interaction which offered even a moment’s lack of satisfaction. I appreciate this isn’t what you’re advocating, but the stuff in the Esquire article did make me think of this.

    What is the most direct, “unpleasant” truth you’ve told in this experiment, and how did it go down?

    1. Steve….thanks for a thoughtful comment. On your last point, I’ve had to tell myself a few hard truths and one of those was that I needed to be more patient and have more time for other people. I’ve also confronted issues with people I’m close to (and who may read this blog!) but it would be wrong to say more and break confidences….an example of the practical and ethical limits to openness!

      1. Of course, I did think after I wrote that that it might be a bit of a personal question, thanks for not taking offence.

  8. I really enjoyed the part about how people financing fancy cars might as well have a sign on the car noting that they’re just renting it from the bank! If we’re honest about trying to get rich in a way that doesn’t compromise our integrity, then we have to be honest when looking in the mirror first.

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