Why is most traditional financial advice so useless?
Well firstly, % fees enable financial advisers to screw the customers.
And secondly, all that stuff about with-profits funds, life assurance, endowments, annuities and risk tolerance questionnaires blah blah blah is mostly a distraction from what really matters: earning more, spending less and investing effectively.
The problem with most financial advice, the personal finance sections of the newspapers, most investing books and websites is that they ignore the inestimable advantages of hardening the fuck up.
As an introduction to this important concept in personal finance, take a quick look at this public service broadcast from Mr Money Mustache’s Australian cousin, Chopper:
Its funny for me to write this article because the author, before his transformation into The Escape Artist, was actually a bit of a softie. In real life, I’ve never been mistaken for Mike Tyson nor been thrown out of the SAS for stealing everyone’s dinner money and generally being too hard.
No, for most of his career, The Escape Artist looked like what he was: a white, mild mannered accountant who could have done with a tan and with doing some more weights.
But, to be fair, my City job did toughen me up mentally. It did this in much the same way that being the only 9 stone weakling in prison will toughen you up. If you are the small guy with soft hands in Wormwood Scrubs, you go one of 2 ways. 1) You either get good at lifting weights, fighting and / or persuading people or 2)….well, lets not go there shall we? I take it you’ve seen The Shawshank Redemption…
There’s that old saying that what doesn’t kill you makes you stronger….and The Escape Artist’s finance job did not kill him. As I got more experienced, I was often able to predict where the next attack would come from and take evasive action. This is a bit like having a superpower.
I also found that endurance exercise such as cycling and running allowed me to deal with my job better. My mind was able to empty and decompress whilst I ran or cycled long distances. The physical challenge provided mental rest and recuperation. As well as teaching me valuable lessons about patience, perseverance and discipline.
Its obvious that cycling (to work, to the shop, to the pub, to the gym) is cheaper than driving. That frugality benefit (the saving in petrol, in car maintenance costs) is tangible and capable of being quantified in £ / $ / €.
Less obvious are the Jedi benefits. The better you exercise, the more powerfully The Force flows through you. I can’t quantify this but I’m sure that by cycling or running to work, I got there in a physiological state where I was ready to do battle. And by running or cycling home, I would burn off the frustrations of the day (as well as some calories).
Unfortunately few of us are getting enough exercise. We evolved as animals built for walking, running, hunting, climbing trees, dancing, mating and other physical activities. Our genes were forged in an environment where activity was mandatory – you were active or you starved or were eaten. In the blink of an evolutionary eye, we got cars, drive through burger chains and remote controls for the TV. This was a disaster for us as suddenly we were no longer forced by the environment to harden the fuck up.
So now we are like spoilt toddlers indulged by politicians. Next time you hear some politician or voter complaining on The News about how living standards are falling and life is tougher than ever, ask yourself whether that’s really true? Some perspective can help. Is life is tougher now than it was on The Somme in 1917 or in Stalingrad in 1944?
The Escape Artist remembers how tough life was growing up in the 1970s and 1980s. The Escape Artist would cycle several miles in the dark to go to cub scouts. If we wanted to change channel on the TV we had to get up and walk over to it ourself! Can you imagine??? And, with no internet, if you wanted pornography you actually had to walk to the newsagent…or use your imagination! Shocking, I know.
Let’s be honest, as we got richer as a society, we got lazier and we got addicted to luxury and convenience. And we haven’t yet learned to replace involuntary exercise with voluntary exercise.
In The De Vany Diet, the author compares us to astronauts whose bodies waste away in a zero-gravity environment. Without the physical effort needed to defy gravity and stand upright, the muscles are not worked and start to power down. Astronauts must exercise or die. Even when they do work out, they return to earth having lost muscle and other tissue.
The same applies to “couch astronauts” here on Planet Earth. It just takes longer for them to decay because gravity is still providing some resistance for them and they have to get up now and again for more Doritos.
When it comes to exercise, never confuse what is normal with what is sensible. Its normal to be sedentary but its not sensible. So its probably not helpful to compare yourself to most of the people around you. Use it or lose it.
As life got softer and easier in the twenty first century, we heard about things like Post Traumatic Stress Disorder (PTSD) that in previous generations were either ignored or covered up. I have no doubt that PTSD is real and can ruin lives. And its a good thing that we are more aware of and compassionate around mental illness. But its less well known that there is also something called Post-Traumatic Growth*.
What does that look like? Meet Rhonda Cornum, who provides an inspiring example of Post Traumatic Growth*. In 1991, during the first Gulf war Rhonda (a military surgeon) was flying low over the Iraqi desert on a search and rescue mission looking for Allied pilots when her Black Hawk helicopter was hit by enemy fire.
The tail was blown off, the chopper crashed and 5 of the 8 crew were killed. Rhonda, both arms and one leg broken, was taken prisoner. She was assaulted and brutally treated until her release 8 days later.
She returned to the United States a war hero and described the after effects of her traumatic experience like this:
1 She became a better doctor “I felt much better prepared to be a military physician than previously. The concerns of my patients were no longer academic”
2 She became a better leader “I feel much less anxiety or fear when faced with new challenges”
3 She appreciated her family more: “I became a better, more attentive parent and spouse. I made the effort to remember birthdays, to visit grandparents and so on. No doubt, coming that close to losing them made me appreciate them more”
4 She changed her perceptions “An out-of-body experience changed my perceptions; I was now open to at least the possibility of a spiritual life versus a physical life”
5 She changed her priorities “I became much more rigorous about dropping my C list priorities…I now always go to my daughters soccer games”
Now The Escape Artist is not suggesting that you have to crash your helicopter in order to toughen up and be happy. In fact, you don’t actually need a helicopter at all! But I am suggesting that we all need some challenge in life and some obstacles to overcome.
To get rich, you don’t have to compete with anyone else. But you do have to accept that challenge and overcoming obstacles are part of the process of getting rich. Accepting this truth is part of your Inner Game. Here’s an extract from The Inner Game of Tennis:
Why does the surfer wait for the big wave? Because they value the challenge it presents. They value the obstacle the wave puts between them and their goal of riding the wave to the beach.
Why? Because it is those very obstacles, the size and churning power of the wave that draw from the surfer their greatest effort. It is only against the big waves that they are required to use all their skill, all their courage and concentration to overcome; only then can they realise the true limits of their capacities.
In other words, the more challenging the obstacle, the greater the opportunity for the surfer to discover and extend their true potential. The potential may always have been within them, but until it is manifested in action, it remains a secret hidden from himself. The obstacles are a necessary ingredient to this process of self-discovery.
Note that the surfer is not out to prove themself; they are not out to show themself or the world how great they are, but are simply exploring their unused talents. They directly and intimately experience their own resources and thereby increase their self-knowledge.
From this, the basic meaning of winning becomes clearer. Winning is overcoming obstacles to reach a goal, but the value in winning is only as great as the value of the goal reached.
Reaching the goal itself may not be as valuable as the experience that can come in making a supreme effort to overcome the obstacles involved. The process can be more rewarding than the victory itself.
But what if you don’t live in Hawaii? Does this still apply? And are you still able to learn this stuff?
Yes! This is why I introduced my youngest son to Karate. Yes, Karate is a form of physical exercise. But there’s so much more to it than that. Karate, like other martial arts, is based on self-discipline, practice, patience, respect, courtesy and hard work.
Ultimately being a good parent is about preparing your child for a world that is full of obstacles and challenges and is often unfair.
As your baby goes from helpless infant to young adult, there are 2 main things you need to do. Firstly, you need to provide them with a secure base of unconditional love. And secondly you have to show them a path to becoming independent, resourceful and resilient.
Or, to put it another way, to help them harden the fuck up.
*Taken from the book Flourish by Martin Seligman
p.s. Got a question for The Escape Artist? On May 2nd I’m being interviewed online by the readers of Reddit in an “Ask Me Anything” session: