We Americans are crazy for freedom, and that’s not bad! Land of the free, home of the brave. It’s central to our identity, as some high-schooler is currently writing somewhere in an Honors U.S. History class essay. However, we have quite a problem: a cripplingly limited understanding of what freedom really means. Though it can be difficult, we must find freedom and happiness in knowledge and structure.
Many of the great philosophers of the Western Canon—René Descartes, Immanuel Kant, David Hume—held versions of the belief that a pure type of freedom is found in knowledge and structure. Basically, with (or within) intelligently reasoned rules and values, one can find freedom. It sounds contradictory, but bear with us.
Descartes actually considered total indecision regarding one’s options to be the lowest, basest form of freedom. He wrote that necessarily having to do one thing, and one thing only, was the best form of liberty.
How? Descartes emphasized reason above all, like more than a few other philosophers did. He wrote that reason rids us of falsely free feeling indecision, and the knowledge we obtain narrows down our options. Free will allows us to choose the option we’ve reasoned to be the best. Reason and free will together actually provide us with fewer choices, not more.
Reason also allows us to escape the oppressive nature of our natural impulses: to fight, to kill, to have intercourse with an attractive stranger at an inopportune moment. Reason and free will liberate humans from their overbearing, harmful natural instincts. (Try Kant for that argument. Or Descartes.) We then arrive at and choose the options that are most beneficial to us by directing our actions with our minds, not our impulses. Basically, it’s mind over body (Plato’s Republic argues that point too).
We’re making it through the philosophy: hang in there, the money-talk is close. If the best freedom really comes from knowledge, with which we can rise above irrational instincts and reason our way into better states of being, happiness really must come from structure. Knowledge narrows our options and softens our impulses. Structure allows us to act on our decisions.
If you don’t feel like living the ‘ignorance is bliss’ life, you’re likely hoping to find some happiness through the use of reason. Structure is just the real-life, practical manifestation of the knowledge you’ve obtained. The pursuit of worthy goals. In the confidence of our rational thought and deliberation, we can find some direction, then some satisfaction, hopefully soon some peace, and dare I say happiness?
What does this have to do with being an investor?
Everything! Let’s assume you’ve read your way through the Wonder, Learn, and Invest! sections of this site, and know all about how we recommend socking away, say, 15% of your paycheck each month. And you know, of course, that we like thinking long-term, getting rich slowly, and choosing not to spend obscene amounts of money on silly things, like drinks at a bar several times a week.
Our financial strategies are generally thought to be smart, certainly well-reasoned, and leave us with very few choices. With the knowledge we present here, one can hardly feel that it’s a choice: to invest or not? Passive or active? The answers are obvious! So though we are free to choose anything, we really have just a few good options after all of our reasoning, philosophizing, and strategizing.
To manifest our reason in real-life structures, we’ve taken bad options (stock picking, market timing) and lifestyles (consuming before saving) off of the table. We’ve set up our automatic monthly investments to Wealthfront, Vanguard, wherever. We know our budgets: paying for rent and groceries is easy because we’ve taken a little bit of time to decide how much we can appropriately spend. We’ve provided our brains with more knowledge and our lives with more structure. We are freer for it.
Want another example of freedom in the well-reasoned structures we create for ourselves? Try mental or emotional freedom. The removal of financial worries from the social, consumerist parts of your life will make those activities and days far more enjoyable.
You can go out for a beer, a movie, new soles for your favorite shoes, a round of laser tag with your old buddies, whatever! Knowing that you have made the right decision with your money on the front end liberates you to spend money on whatever else you find rewarding. Escaping the stress surrounding your bank account balance after a day of guilty-pleasure consumerism is a wonderful feeling.
And as you build wealth, the list of things you can do (or purchase) grows longer and longer, though we’d hope your consumerist pursuits aren’t driven by price tags and status symbols. But that’s a topic for another article.
It’s a mistake to hold on to the belief that structuring your financial life at a young age has the effect of restraining you and imprisoning your money. You are actually freer for the structure. Your hard earned wages are more useful when your dollars behave like little green soldiers out in the world, being fruitful and multiplying for you. You made a decision you can feel proud of, maximized your wealth-building potential and started down the road to financial freedom. You can spend the rest of your paycheck with confidence.
Freedom and happiness in knowledge and structure. The idea is centuries old, but as important as ever. It would have been understated, if not subtly poetic, had we not written these final few sentences.
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