#40: The dance of becoming wiser with money

20th June, 2021

Welcome to the Idiot Money newsletter. The newsletter that dances like nobody’s watching.

This week: becoming wiser with money by understanding that while most investment answers are simple, a craving for simplistic answers is idiotic.

There is no conveniently straight road to better financial decisions. Because life isn’t a race, it’s a dance.

Say yes to everything!

Say no to everything!

Say yes to everything when you’re young and exploring, then say no to everything when you’re exploiting your exploration!


Get on the property ladder!

Climb the career ladder!

Check your ladder’s against the right wall!


Great, life-changing advice, right?

A race for rats

Amid the fun of high margins for low morals, face-to-face financial advice frequently faces a fascinating conundrum. How much do you risk pissing someone off for their own good?

Financial advisers are in the perfect position to leverage knowledge of what works (and what doesn’t) when it comes to financial decision-making. Before, during, and after such decisions, the financial adviser has a unique all-access pass into the heads of those making them.

Yet staying in this privileged position can require shirking its major benefits.

It’s one thing to suggest to someone that they’ve made – or been sold on – some dumb investment choices that can be fixed with a few sign-here tabs. It’s quite another to prompt them to consider if decades of career – and indeed life – choices, were as smart as they could’ve been (and continue to be)… even if that someone has spent the last two hours whining about the (non-financial) consequences of those choices. Mental mirrors can be uncomfortable to look at. Rear-view ones that force us to reflect upon what we’ve done with our lives are all the more so.

The winner of the rat race, is, of course, still a rat. People pay advisers tens of thousands a year to brag about the winning bit, not be reminded of the rat bit. Or even to be asked what it is they’ve actually won.

Yet by far the most valuable transformative experiences I’ve seen advisers enable have been by encouraging an examination of what ‘winning’ actually means, and even if ‘winning’ is remotely appropriate language to apply to living well.

Actually helpful advice, that inspires examination rather than offering appeasement, takes time. Because those most in need of it don’t believe it applies to them, and get most enraged when you suggest it.

As I wrote in Idiot Money #2:

We believe in financial orthotics. But that's an inhuman crock of shit. We need to build strength in bare financial feet, not pay for padding to temporarily numb the pain. The self-deception of confusing 'quality of life'​ with 'access to comfort'​ is the world's slowest and silliest suicide note.

The problem with the rat-race game is that no one truly believes they’re playing it, just as nobody believes they’re rich, or extravagant.

Stats, however scary, do not penetrate subtle stories.

As we saw in Idiot Money #23, there’s a crucial difference between being frightened and being haunted. Frightening people is a sales tool. Haunting them is a therapeutic one. Fears can vanish in the blink of a bank transfer (especially those invented by the transferee). But ghostbusting is ultimately a DIY job.

People don’t seek advice to be guided to the work they have to do. They seek it to be told the work is all taken care of. Which is why fortune-cookie crap about yeses and noes and ladders remains so popular.

Yet when it comes to life choices, decisions made for you are about as rewarding as cheating – the real value comes from becoming a better decision-maker.

Making better decisions

Making better use of your money is a subset of making better decisions.

As detailed in this bit of the book, the two ways to improve decision-making are improving your filtering (how effectively you choose what to bother thinking about at all) and your processing speed (how efficiently you think about what’s left over).

Misunderstandings and fallacies are therefore the two ways it goes awry.

Misunderstandings are about problem formulation: a mistake in coming up with the question – asking a bad one, or asking the right one in a bad way.

Fallacies are about solution reasoning: a mistake in getting to the answer – using flawed logic, or an inefficient method.

To combat misunderstandings, we need to cultivate ‘active open-mindedness’: an ability to quickly integrate new information into our beliefs, and a willingness to change our beliefs when that new information suggests we should. To combat fallacies, we need to cultivate wisdom.

When saying ‘yes’ to everything works, it does so because it’s a shortcut to open-mindedness. However, this open-mindedness is commonly not active, but blind.

‘No’ isn’t magic either. It’s just a filtering constraint. Constraints are the key to getting shit done. However, the problem with getting shit done is that sometimes what you get done is, well, shit.

‘Correct’ is defined by context

Like other fortune-cookie trivialities like ‘goals-based investing’ or ‘buy experiences’, the ‘say yes/no’ sort of advice isn’t necessarily wrong, but it is limited.

You could tell people to say yes when it was better to say yes, and no when it was better to say no.

That would, by definition, be better.

But it would also basically boil down to ‘be wiser’.

If telling someone to be wiser worked, it’d be great advice, but it doesn’t, and isn’t. Wisdom, like attention, is something you train as a side-effect.

You become wiser as a side-effect of a way of living. A way of living defined by the exact sort of consciousness fortune-cookie trivialities work against.

Suggesting to someone that they’re not as wise as they could be is haunting, not frightening. It’s a much harder solution to sell.

To complexify is human

Tying this together, we can see that much as many believe otherwise, there’s nothing special about the mechanics of financial decision making. Your brain doesn’t care if what’s in front of you is a bag of cash or a plate of cookies.

The only thing that’s special about money is that it gets everywhere, so if you’ve mental blocks associated with the mere mention of it, they’re that much more important to do something about.

A lot of financial advice consists in helping people win a game while also making it look and feel like they’re not actually playing it. It’s quite a skill.

It’s simpler to always say ‘yes’ or ‘no’ than it is to admit that the point of life is to continually increase your capability to master increasing levels of complexity.

It’s simpler to argue over definitions of ‘rich’ or ‘wealthy’ or how to grow either than it is to live in a way that makes any definition irrelevant and unimportant. The ‘goal’ is to become better at turning your money into a Good Life, not to win the ‘define wealthy in five words or fewer’ competition.

It’s the job of this newsletter neither to pander to such comforting crap, nor decry those that peddle it, but to inspire you to turn unhelpful illusions into something more illuminating. That shines a light not on a path, but on a process of becoming competent enough to deal with increasing complexity.


Any idiot can climb a ladder. Non-idiots check it’s against the right wall. Wiser folk still, right wall or not, wonder if perhaps climbing the same simple steps for all eternity is really the best metaphor for living in the first place.

Life isn’t a race, it’s a dance.

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