#71: Getting into Financial Flow

24th January, 2022

Welcome to the Idiot Money newsletter. This week, becoming wiser with money by understanding what effective financial management is ultimately all about, including:

• what it is that in the end everybody’s trying to do with their money… and remembering this when it matters most;

• the three major mistakes that screw this up; and

• forgetting the most basic question to ask of anything… let alone your life choices: does it work?

The point of having resources – of which money is the most obvious and the easiest to control – is to turn them into living well: living in a way that makes you feel alive, rather than just not dead yet.

If you’re anything like me, what leaves you feeling most alive is dancing on the threshold between your ability and an opportunity to do something cool, in a way that turns current ability into bigger future ability. Being in what we’ve come to know as flow. That all-play, no-thought, meditative-yet-hyper-aware state where you can maybe just about claim to be fulfilling your potential as a unique, ass-kicking human in some way. And bonus points if this expression of self also makes the world that bit more wonderful as a side-effect.

The man whose name has become synonymous with flow, or at least would have, if anyone could pronounce it, is Mihaly Csikszentmihalyi (Me-high Cheek-sent-me-high if, like me, you still forget despite having said it a thousand times).

As he wrote in Flow: ‘Enjoyment appears at the boundary between boredom and anxiety, when the challenges are just balanced with the person's capacity to act.’

He continued:

Contrary to what we usually believe, moments like these, the best moments in our lives, are not the passive, receptive, relaxing times […] The best moments usually occur when a person’s body or mind is stretched to its limits in a voluntary effort to accomplish something difficult and worthwhile. Optimal experience is thus something that we make happen. […] For each person there are thousands of opportunities, challenges to expand ourselves.

He reminds us that:

Such experiences are not necessarily pleasant at the time they occur.

And that:

Gaining control of life is never easy, and sometimes it can be definitely painful. But in the long run optimal experiences add up to a sense of mastery – or perhaps better, a sense of participation in determining the content of life – that comes as close to what is usually meant by happiness as anything else we can conceivably imagine.

You don’t need a modern-day researcher to tell you that flow is cool.

We’ve known it for centuries and ignored it for just as long.

Csikszentmihalyi just gave us extra graphs to ignore just as we did thousands of years of accumulated philosophical wisdom and the messages our bodies desperately scream into the voids between our ears when we’re living how we know we should… and shouldn’t.

We like to fulfil even a pica of our potential a lot more than we like to just trundle through the motions of the day without being struck by disaster. So when it comes to how we use our money, why do we choose the latter?

Why do we choose to sacrifice the chance to fulfil potential on the altar of avoiding impoverishment?

Why do we choose to shirk the responsibilities of being both richer than just about everyone that’s ever lived, and having more opportunity to easily do worthwhile things with those riches?

Why do we desperately hoard resources in the name of ‘security’, despite the inescapable facts that if your ‘security’ comes from hoarding, one, it’s impossible to arrive at, because hoarding is driven by a blind, insatiate, insecure, craving for ‘more’, and two, it can never be secure anyway, because stuff can disappear in a way that character cannot?

If we made wiser decisions with money, both our lives and the world would be better off. We don’t want to do dumb shit with money. So why do we?

We don’t do it because we don’t know enough about money, or investing, or even ourselves, in the way we typically think about ‘knowing’ about something. Which of course makes the endless seeking out of the next article full of tips and tricks perhaps a little pointless.

We do it because we’re self-deceived.

The problem with self-deception, of course, is that – by definition – no one thinks it applies to them. So they keep looking in the wrong place for solutions to it.

As we saw in Idiot Money #56:

If you misunderstand the problem, your solution is bound to fail, and you won’t know why. So you’ll keep trying the same dumb thing over and over again, wasting your money, your time, your energy, and therefore your life, in the process… none the wiser why you never became what you could have become.

Which explains why, despite a consumption-based solution to an existential unease never having worked before, people will keep on trying it again, and again, and again…

We ‘know’ money, and investing, and ourselves, and the world, and how they all fit together – and could all fit together in a more beautiful flowing way – with only half a brain. (A topic we’ll shortly be spending a lot of time exploring, with the help of possibly the finest non-fiction book I’ve ever read, Iain McGilchrist’s magisterial The Master and His Emissary.)

Becoming wiser with money is primarily about being less idiotic with it. We may not be idiots, but when it comes to money, we do almost incessantly idiotic things.

Self-deception is the worst. Admitting that you’ve been deceived by someone else is tough enough (hi Brexit!). Admitting that you’ve been deceived by yourself is nigh-on impossible.

First you’re trying to spot the deception with the same eyes that are deceiving you. Second, there’s at least a hint of an admittance that you are not completely and utterly perfect in every way. Bugger that.

The way we cede control to these self-deceptions is subtle; that’s how self-deception works. 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.

However, making better decisions with money, spending more time in flow, living a freakishly flourishing, potential-fulfilling life, requires that we dissolve this self-deception. It doesn’t matter how sane the stuff we layer on top is (e.g. investing in the ‘right’ fund, or ‘denying’ ourselves worthless junk). Layering sane stuff on top is pointless if the mind on which we’re layering the sanity is still deceived. It’s better to learn that your body genuinely prefers broccoli to biscuits than to wage a never-ending war against the hyperpalatable voodoo of the confectionary industry.

There are three main self-deceptions around money that hold us back:

• Believing money is something you have, rather than part of who you are. Substituting ‘having’ something for ‘being’ or ‘becoming’ something never works. Yet because we’re stuck in the mode of believing it does, even when we see it doesn’t work, our default answer is to try again.

• Believing other people’s money defaults can be valuably adopted as your own. Conscious choices are better choices. This isn’t about constant cognitive vigilance; it’s about slowing down and cultivating a state of effortless effort where conscious choices become comfortable, not something we flee from. ‘Although the flow experience appears to be effortless […] any lapse in concentration will erase it.’

• Believing the importance of money lies in numbers, rather than narrative. It’s (almost) never about the numbers. When making a money decision, if you’re focused on the numbers, e.g. as a judgment of value, or stating you can ‘afford’ something, chances are high you’re doing it wrong.

Defeating these takes work, because rewiring mental patterns always does, especially those that are being constantly reinforced by societal influences and the words we use to talk about money.

‘The Good Life,’ wrote Bertrand Russell, ‘is the one inspired by love and guided by knowledge.’ The way we live with money, we are inspired not by love (either of ourselves, or by extension others and the world) but by phantom chases after our dream’s shadows, and we’re less guided by knowledge and more led by whoever best exploits our blindness.