Zen Personal Finance: My Philosphy, and What It Means to Invest It Wisely

zen garden

zen garden (Photo credit: Wikipedia)

What is “zen personal finance”? Is it a new-age thing? Is it a type of meditation? Is it a new way of looking at our personal finances?

It might be none of those things, or it might be all of those things and more!

Now that I’ve been out on my own for a while, I’ve had some more time to think and reflect on what I want out of life, and on what personal finance means to me. This post reflects my own personal thoughts and approach, and reflects some of the lessons that I’ve learned over time. This post isn’t a pitch for zen habits, although I’ve learned a great deal from there and would definitely give that site a read. :)

What does it mean to “invest it wisely”?

When I first started this blog, I was originally interested in learning more about the technical and investment side of finance; the sort of stuff that a CFA might be interested in. I had done well in finance in school, I enjoyed having some of these discussions with my good friend Mich @ Beating The Index, and I was a little bored with my job as a software developer at the time.

Over time, I tried to whet my appetite for learning more about the intricacies of investing in options and futures, or analyzing the balance sheets of a company, but I wasn’t able to do it. There was always a question in the back of my mind, and it was asking me “What does this do for me?” Technical knowledge on its own wasn’t going to put me on the road toward financial independence, or increase my happiness in life.

It turns out that there were some serious questions that I needed to address, long before I worried about the small details. How was I going to reduce my debt and increase my savings? How was I going to advance in my career and move toward financial independence? How was I going to move toward self-actualization?

I now believe that the most important investments we make in our lives are those that we make in ourselves. Before we can move toward self-actualization, we need to be fulfilling our life purpose. We need to be happy in our station in life. Moving toward financial independence isn’t just about money: it also means being secure in one’s own beliefs and being in an internal state of peace. We can take important steps, such as ensuring that we reduce our investment costs by investing in index funds, and lowering our debt load by not buying more house than we can afford, but these are all ancillary to the true goal: mental satisfaction and contentment with oneself and the world.

We are all born with a given amount of mental and physical capacity, and everything that we achieve in this world is achieved through the focal point of our mind and body. Our minds can become a trap, imprisoning ourselves inside of an inpenetrable fortress; our minds can also be the greatest enabler of our highest aspirations and dreams. Our minds are the ultimate resource, and we must learn to invest this resource wisely.

Why do we sometimes feel jealousy, envy, and greed?

Figure 17 from Charles Darwin's The Expression of the Emotions in Man and Animals.

Source: http://bit.ly/MUSmk4

Some of the main sources of the unease we feel can be traced to the primal emotions of jealousy, envy, and greed. Underpinning these emotions is often a base feeling of fear: fear that we’re not keeping up with our colleagues, fear that we won’t have enough saved for retirement, and fear that we won’t live life as fully as we want to.

I believe that it’s perfectly normal and healthy to feel some amount of jealousy, envy, and greed.  We are social animals, and we evolved in an environment where these emotions could have increased our chances of survival. In today’s world, these emotions don’t necessarily make as much sense. I grew up in a fatherless home with a mother who remarried, had another child, and pushed me out of her life. I spent much of my life being angry at the world.  For the longest time in my life, I was held back greatly by my own personal feelings of envy for others and the lives they lived, and fear that I couldn’t achieve the same. Why did they have good homes? Why did they have normal parents? Why were they wealthier? How come they didn’t have money problems? The world had wronged me, and it wasn’t fair!

I now believe that as humans, we can overcome any adversity. One of the main reasons that I was so unhappy was because of all of the unease I was creating for myself! A little bit of envy was good to motivate myself to change things, but letting myself be overcome by these emotions was becoming destructive. There is beauty in the world, but we must choose to see it. If we don’t see it, then we can’t achieve self-actualization; our minds will always be hungry and starving for more. How can we achieve anything in our lives if we can’t see past our own noses?

The four noble truths

There’s a concept in Buddhism known as the “Four Noble Truths“; I believe that we can learn a lot from these truths by applying the concepts to our own lives. I’ve written my paraphrase of the truths below; however, to learn more, I recommend going straight to the source.

  1. The noble truth of uneasiness: Life is filled with uneasiness from the moment we’re born. Many things in life cause uneasiness, and we don’t always get what we want.
  2. The noble truth of the source of uneasiness: We have desires, beginning with the sensual desires and pleasures, and moving up to self-actualization and contentment. We all want some degree of freedom, security, fortune, power, and success. There’s always something to go after.
  3. The noble truth of the cessation of uneasiness: It is the fading away, giving up and relinquishing of our uneasiness, and of achieving freedom from it.
  4. The noble truth of the way leading to the cessation of uneasiness: As humans, we are always acting toward reducing and eliminating the uneasiness with our lives. Some ways of acting will be more successful than others. The Noble Eightfold Path is about acting with the right view, right intention, right speech, right action, right livelihood, right effort, right mindfulness and right concentration.

I really believe that it comes down to that: how can we act to reduce the uneasiness in our lives? Isn’t that what financial freedom, paying down debt, and saving money is all about? The money is just a means to an end.

We can all take small, incremental actions, such as reducing the fees we pay on our investments, and eliminating high-interest debt such as a rolling credit-card balance. However, we must change the way in which we operate internally so that we can move toward reducing the unease that we feel, and move closer to that state of pure contentment. If we are always creating unease for ourselves by entering into debt to buy a bigger home than we can afford, or if we are feeling unease because someone is “luckier” than we are, richer, more attractive, and what have you, we are going to make ourselves miserable. We are doing it to ourselves.

With every action that we take, we can ask ourselves: “Does this maximize my long-term happiness and satisfaction?” Since other people are usually more willing to be nice to you if you’re nice to them, first, this is a path that leads to greater social cooperation and harmony. Since we’re focusing on the impact on our overall lives, we avoid falling into the trap of living only for the present, or worse, living only for the future when we might give up all that we can enjoy in the present, and we might even be too old to enjoy our savings.

Through the power of our minds and by following the right path, we really can overcome adversity and move closer toward happiness and peace.

Follow your own path

I haven’t always been successful at practicing what I believe in, and I won’t pretend that I’m any wiser than anyone else or even that my way is better than anyone else’s. In fact, I see this as a continuous learning experience: I have learned a great deal from you, my dear readers, and I have enjoyed the journey so far.

Everyone has to find their own path, but I hope we can take the journey together. Your goals and dreams belong to you, and nobody can ever take them away from you.

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    • says

      Thanks, Kathleen! I’ve seen happy people in the poorest countries, so things are surely never so bad. All about perspective. 😉

  1. says

    Those four noble truths are excellent!

    We have all failed in always trying to practice what we preach, we are human, but if you see life and your experiences, as an opportunity to learn, understand and evolve then you’re not that far away from self-actualization.

    I really enjoyed this part of the post, and your journey on Invest It Wisely:

    “I now believe that the most important investments we make in our lives are those that we make in ourselves.” “Moving toward financial independence isn’t just about money: it also means being secure in one’s own beliefs and being in an internal state of peace.”

    There are many things we can do to find that inner peace, and the cool thing is, your blog, for you, is transparent evidence of that.

    Excellent stuff Kevin!

    All my best to your very successful future,

    • says

      I guess the hard part is knowing when you’re making a mistake, so you can learn from it and adjust!

      Thanks for the good wishes, and for being such a great blogging buddy. :)

  2. says

    Great post Kevin. I am a big believer in personal growth, as it is the foundation of knowing our true self, our aspirations, and our ultimate happiness. If we build our lives with the goal of achieving lasting happiness, we will naturally adept to better personal finance habits because money will have different perspective in our lives.

    • says

      Hi Shilpan,

      I love your approach toward happiness, with a great outlook to life and business. Your writing inspires me every day! :)

  3. says

    Going on your theme. I think we compound uneasiness with our usual financial impulses. We tend to make decisions today, to relieve the uneasiness of today, without regard to the fact that it migt mean greater, long-term uneasiness down the road. I like how you mentioned that decisions are more like a strategy and overall, they need to reduce your uneasiness.

    • says

      Hi Wayne,

      This is a great point! Sometimes there’s an internal tug-of-war between the instant gratification between what we want to feel today, and the greater pleasure down the road that comes from withholding that gratification. Do we go into debt so we can buy that car today, even if it means we’ll have more payments down the road? Finding the optimum balance between the two is no easy task.

  4. says

    There’s one thing that helped completely overcome my envy I had when I was younger: Karma.

    When I saw people who had much more, I became incredibly happy for them because their good deeds in the past were rewarding them today.

    • says

      Hey Sam,

      I think there is definitely a karmic quality to our actions, and that’s one good way of looking at it. If someone worked hard and reaped the results of their hard work, then they definitely deserved their success.

      Some people do take the the idea of karma too far and believe that luck is assigned by some mysterious force, to the point where they believe that those with bad luck must also be bad people, and those with good luck good people. I personally try not to rely on luck and try to not concern myself with the luck of others, beyond to be happy for one’s good fortune or sympathetic for one’s bad fortune.

  5. greg says

    “or worse, living only for the future when we might give up all that we can enjoy in the present, and we might even be too old to enjoy our savings.”

    While I know almost all people agree with this phrase, I personally do not. The reason is that I do not save and invest to spend; I save and invest to obtain freedom: freedom from having to do what someone else tells me to scrape by, freedom from the reality that I do have to worry about bills if expenses are higher than income, etc.

    It seems like the phrase above can, in some lights, be considered contradictory to others in this post that insinuate that there “is more to life than money”. I do not value the money, I value the freedom that the rules of society dictate wealth gives me. Therefore I do not enjoy spending, I enjoy investing, freedom, and above all, the promise of being able to work hard on great things without being slapped down by a manager who has to meet impossible deadlines.

    • says

      Hi Greg,

      I loved this comment, especially the last part about working for a manager who needs to meet impossible deadlines. I know where that road ends up. 😉

      I really believe that there’s a balance to be achieved; On one hand it’s possible to take carpe diem too literally and not save up enough money to achieve one’s goals and dreams, and on the other hand it’s possible to invest too much energy in saving and not use one’s opportunities to their maximum advantage. When I say “not enough” or “too much”, it’s entirely a personal judgement that everyone has to make for themselves, so they can best achieve the goals that they want to achieve. The thought process is important, because I know that I personally wasn’t thinking about these things when I was younger.

      Money is definitely not the root of all evil, and I hope that I’m not coming across as an anti-wealth bohemian. I don’t believe in memes such as “tax & spread the wealth”, instead, I believe that everyone should focus on their own inner values and best bring these to the light. Money is simply the means to our ends, such as the freedom to work on projects that we really care about.

      I love your emphasis on freedom; I’m currently working on my own freedom from those managers, and hope that it can be sustainable for the long-term!

  6. says

    Nice post Kevin.

    In life (and in investing), people have a tendency to get way too caught up in the details and miss the big picture. That’s why so many people are stuck in jobs and careers they hate. If a path doesn’t lead to happiness, why take it? I’m glad you have figured this out and are pursuing life in your own way.

    • says

      Hi Bret,

      Thanks for the comment — I believe it really does come down to that. Hard work toward the values you believe in, and aiming toward the right balance.

  7. says

    “Underpinning these emotions is often a base feeling of fear”

    Nailed it.

    I am not so sure about the keeping up with colleague, but for me — I think “what happens if I lose my job.. What happens if… (etc)”

    Money provides a safety blanket. I understand that things can happen that result in money being lost or money not being valuable… but it’s one way to feel more secure about your life.

    • says

      Hi Drew,

      Completely agreed. Getting over that fear was a little tough for me, and it’s always there in the background at least to a certain extent, as I’ve not yet achieved full financial independence.


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