Read an Excerpt
Chapter 1: Stoicism
What kept me from economic security for much of my life was a stubborn belief that I was exceptional. The market reinforced this. I was starting companies, being profiled in magazines, and raising tens of millions for my start-ups. I was (obviously) on the verge of tens, if not hundreds, of millions as I was (obviously) exceptional. Getting close a couple times only reinforced the belief.
Convinced of my imminent jump to light speed, I ignored the idea of living below my means or saving and investing. The IPO or acquisition would be any day now. I could have easily saved $10,000 to $100,000 per year in my twenties and thirties, but why sacrifice when so much more is right around the corner? Right? Wrong. The dot bomb of 2000, a divorce, and the Great Financial Recession meant that every time the ball looked to be headed for the fence, it would veer foul. And then, at 42, my first son was born.
Angels singing? A Hallmark Channel moment? On the contrary. I was so nauseous I couldn't stand upright. It wasn't the blood and screaming that rendered me useless, but the wave of shame that washed over me. I had fucked up. I could have easily had a few million dollars in the bank, and I didn't. I had failed. Until minutes earlier, I could handle that, because I'd only failed myself. What I couldn't handle was the realization that I had failed my son.
My failure was constructed from poor choices, but it wasn't from a lack of knowledge. I had an MBA, I'd raised many millions of dollars in capital, made payroll every week, and delivered profits every quarter. I understood money. I just wasn't any good at it. I was not alone in this. A study of UK consumers found that while both financial illiteracy and a lack of self-control contributed to people getting over their head in debt, the data showed "a stronger role for lack of self-control than for financial illiteracy in explaining consumer over-indebtedness."
Economic security doesn't derive from an intellectual exercise; it's the result of a pattern of behavior. How can we avoid the pattern of behavior that leads to over-indebtedness and develop that which leads to wealth? Put another way, how can we align our behavior with our intentions? On the surface, this looks like self-control. But self-control suggests willpower, holding to a plan with white-knuckled grip. That's exhausting, fighting your own impulses constantly. There has to be something deeper that enables some people to align their behavior with their intentions consistently over the years.
The distilled answer: character. In the face of modern capitalism's temptations, human frailty, setbacks, and bad luck, our intended behaviors require durability, and that only comes when those behaviors are rooted in our true character. If durable changes of behavior could arise from intention alone, we would keep our New Year's resolutions and never forget a thank-you note. What we do is an expression of who we are. Contrary to the popular saying, it is not the thought that counts.
This chapter explores the development of our character in three parts. First, I explore the essential mechanics and principles of character building. Second, I describe how I apply those principles in my own life, and then I suggest how you might think about building your own strong character. Lastly, I widen the lens to consider character in the community. Humans are a social species, and we can only achieve our full potential in cooperation (and sometimes competition) with others.
Character and Behavior
Humans have sought to build character throughout history. The good news: we know how it's done. The bad: it's difficult. But it's neither mysterious nor complicated. Character and behavior exist in a self-reinforcing cycle. Just as our actions reflect our character, our character is ultimately the product of our actions. That cycle can be a virtuous circle or a destructive spiral-your choice. This is true for more than mere economic success. Living with purpose and consistency is what it means to live an authentic life, leaving it all on the field even if you come up short. The pursuit of wealth, like its cousin, the pursuit of happiness, is a whole-person project.
Humanity has learned the process many times, including through the teachings of Stoicism. Stoicism is a school of philosophy founded in classical Greece that flowered in the Roman Empire and has been reinvigorated by modern interpreters. Stoics regard the development of one's character as the highest virtue, and they have written at length on its pursuit. I call this chapter "Stoicism" because the language of the Stoic philosophers and their modern interpreters resonates with me, and their teachings influence the way I approach my professional and personal life. That said, this section is not an exegesis of Stoic philosophy or limited to its teachings. Marcus Aurelius didn't suggest we "make rich friends," as I do in this section. But I like to think he'd be nodding through most of this chapter.
Around the same time the first Stoic philosophers were contemplating virtue in Greece, the disciples of Siddhartha Gautama were elaborating on his teachings, the emphasis on right intention, right action, and right mindfulness that form the heart of Buddhism. Centuries later, Jesus preached the importance of rightfulness and resistance from temptation, warning us: "The flesh is willing, but the spirit is weak." In nineteenth-century America, Thoreau wrote that the purpose of philosophy is not merely "to have subtle thoughts," but rather "to solve some of the problems of life, not only theoretically, but practically." I suspect every culture and philosophy has some variation of what I cover here. Borrow from these traditions that which serves you.
Hung(a)ry
After graduating from UCLA, I traveled around Europe. At the Vienna airport I changed $300 in American Express Travelers Cheques (don't ask . . . they made no sense then, either). Anyway, in exchange for three fake Benjamins, converted at 96¢ to the dollar into a foreign currency at an American Express travel office (see above: made no sense), I received several stacks of forints and was now the baller I was meant to be. A short train ride was all that stood between me and the consumer orgy waiting for me in Budapest.
In a store window I saw a beautiful leather travel bag, so I went inside. There I found people shopping for . . . spools of thread and needles. Before I even had the chance to ask about the bag, the woman behind the desk pointed at it and said, "Not for sale." Soon I was back at the travel office with my only slightly smaller stack of forints, getting a lesson in currency exchange and the bid-ask spread.
Thirty-five years of capitalism later, whether you are in Budapest, Hungary, or Budapest, Georgia (yes, this place exists), and you want toothpaste for sensitive teeth infused with olive oil or cereal that tastes like French toast, no problem. Those products exist and can be at your doorstep that afternoon. Say what you will about communism, but it sure made it easy to be frugal.
"The easiest way to make a dollar is to save a dollar" is good advice. Yet every day, hundreds of times a day, we are confronted with messages, arguments, and encouragement to spend. Capitalism harnesses the ingenuity and energy of an entire society toward a singular purpose-to persuade you to spend money. It's what makes the system function. The temptations range from an impulse purchase of gum at checkout to add-ons to your Amazon cart to an upgrade to economy-plus with priority boarding and free drinks. And, by the way, do you want to "protect" your trip (i.e., buy insurance) in case something happens . . . or check the "I do not want to protect my trip" box and feel irresponsible, negligent even? Don't worry, American Airlines (or their insurance partner) can make you feel less negligent for an additional $39.95.
Craving Is in Our DNA
Capitalism has a lot to work with. For 99% of our species's existence, most people didn't live past 35. And the number-one killer was starvation, a lack of "stuff." It's not YOLO ("You only live once") that's being whispered in your ear, but something much stronger: YNSN ("You need stuff now") . . . or you will die.
We are biologically programmed to seek sugar, fat, and salt, because for most of our species' existence these items were in short supply. Just the touch of these substances to our taste buds triggers a cascade of chemical reactions that read as pleasure in our consciousness. Our brains link memories of this pleasure to everything from the color of the packaging of chocolate to the intersection where our favorite burger joint resides. Our brain is trying to help when it does this, mapping us a route back to the ultimate reward, the best feeling: survival.
It gets worse. Once you've checked the "survival" box, another instinctive voice begins screaming at you: propagation. It's easy for me to tell young people to save, invest, etc. However, a twentysomething is tasked with finding a mate. And finding a mate involves signaling and spending. Panerai watches and Manolo Blahniks are nods to your evolutionary obligations, to find a mate stronger, faster, and smarter than you so your genes will mingle with theirs and live forever.
At 23, after my first year at Morgan Stanley, I received a $30,000 bonus. I had, until this point, never had more than $1,000 in my checking account. Finally, a base to build from. A base? Yeah, right. I went out and bought a BMW 320i (hello, ladies). It was navy blue, and I hung swim goggles from the rearview. Why? Because once a week I was (wait for it) swimming. Neither of these actions had anything to do with transportation or exercise but signaled that I was strong and had resources . . . and that you should have sex with me. So . . . yeah . . . easier said than done. Also, there's some logic that a certain level of signaling can be justified: looking good, putting yourself in social situations where there are mating opportunities (e.g., Coachella, clubs, Cancun).
Modern humans are doubly disadvantaged. We live in a world of excess but are built for an environment of scarcity. And we have built our economy on exploiting this disconnect. You are not going to think your way out of this dilemma.
You Are What You Do
Advice on careers, budgeting, and investing is not in short supply. Bookshelves, the Web, and social and family gatherings are bursting with it. None of it matters if it doesn't translate into action. The gap between your intentions and your actions is a decent forward-looking indicator of your future success, emotionally and financially. When we describe people we admire, we call them "courageous," "entrepreneurial," or "innovative." These are all different shades of action, specifically people who are prone to action that foots to their values, words, and plans. As Carl Jung put it, "You are what you do, not what you say you will do."
Unfortunately, we are bombarded with messages that there are shortcuts to closing the gap between intentions and actions. In preparation for writing the classic guide to self-improvement The 7 Habits of Highly Effective People, Stephen Covey did not merely study successful people, he reviewed the literature on how to become successful. From the post-WWII period forward, he discerned a shift from what he termed the "character ethic" to a "personality ethic." Older works encouraged readers to build character: foster principles and values in themselves, to build success on the basis of virtues like temperance, industriousness, and patience. The more recent advice, on the other hand, focused on how to change merely your personality: how you present yourself to others. As the title of the grandfather of these self-improvement books puts it, How to Win Friends and Influence People.
Covey was working in the 1980s, but any time spent on the internet will confirm that this trend has only accelerated. Social media is littered with "life hacks" (something called mushroom coffee?), dating tips on the best "openers," and other "weird tricks." Every aspect of our lives has a fad diet to better it. What keeps personality ethic advice flowing is that it might give you a momentary boost but it doesn't work over any significant time span or against serious opposition. (A survey of 121 studies found that a variety of popular diets, no matter what theory they promoted or which celebrity promoted them, showed no effect on weight after a year.)
Just as adherents to fad diets inevitably slide back to their pre-diet weight, success tactics are just that-tactics, rooted entirely in a specific behavior-and won't last. If I tell you the secret to success is waking up at 5:30 a.m., taking a cold shower, and running 5 miles, that's not bad advice. Likely you will be more focused and productive on days when you follow it. And maybe you'll follow it for a few days, even, if you are highly disciplined, a few weeks. But novelty wears off, and the morning's dark and cold persists. I've spent a lot of my professional life around wealthy people, and some do get up at 5:30, take a cold shower, etc. But that's not why they're successful. Those are habits that are the product of living an industrious, disciplined life. Character and behavior are inextricable.
Ancient Defenses Against Modern Temptations
The Stoics identified the four virtues: courage, wisdom, justice, and temperance. I believe these are the keys to resisting temptations-and to much more.
Courage is our persistence, what modern thinkers often term "grit." We have courage when we do not let fear guide our actions: fear of poverty, fear of embarrassment, fear of failure. Instead, we are industrious, positive, and confident. Marketers are masters of exploiting our fears and insecurities. Courage is cheaper than Chanel, and it works better.
Wisdom, as described by Epictetus, is the ability "to identify and separate matters so that I can say clearly to myself which are external and not under my control, and which have to do with the choices I actually control." Or as Annie Proulx put it in Brokeback Mountain: "If you can't fix it, you gotta stand it."
Justice is a commitment to the common good, a recognition that we are interdependent. The Stoic emperor Marcus Aurelius believed that justice was "the source of all other virtues." When we act with justice we are honest, and we take the full consequences of our actions into account. We can't build good habits alone, and the latter part of this chapter takes on the ways in which our character is in part a function of community.
