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Why Socrates and Plato Are the Only Financial Gurus You Need

This article was written by in Family and Life, Personal Finance. 3 comments.

The self-help industry continues to produce hundreds of new books every year, explaining how people can live their lives, improve their identities, and build wealth towards financial independence. There’s nothing wrong with this approach, in particular. You never know when you’ll find an author, a blogger, or a friend who will put words in the right order, and the result is a connection that can change your life.

I know this from experience. Over the last decade, readers have contacted me privately to thank them for the information and the stories I’ve provided here, whether it’s a warning about a company you might not want to work with, or sharing my past mistakes in an effort to prevent others from making those same mistakes. When I realized I needed to make changes in my life, it wasn’t a guru, author, or blogger, or friend who opened my eyes. It was my own bad situation — the loss of a job, car, girlfriend, and apartment in a short time span. I had to make changes and then I found the Motley Fool’s “Living Below Your Means” message board.

The messages there, with thoughts from real people, not experts selling books or trying to attract pageviews, helped me come to terms with some changes I needed to make.

I already knew about the self-help industry. My first major job after college was with a company whose executive director lived and breathed life gurus and expensive brainwashing seminars. I never wanted any part of that.

The gurus of today owe a lot to philosophers of the past, Socrates and Plato in particular.

In fact, Socrates might have been considered a guru in his day. At least through the eyes of his student Plato, Socrates was a teacher. He placed a high importance of knowledge over ignorance, and knowledge even over winning an argument. This philosophy would prevent him from succeeding well within the media environment in the United States today, but his teachings have stood the test of time.

Because much of we know about Socrates comes from the writings of his protege Plato, it’s hard to know how much of of what we know about the philosophies of Socrates is filtered through Plato’s own philosophies. Keep that in mind as I continue to look through some specific examples of how Socrates and Plato have paved the way for modern thoughts about life and money.

The examined life.

In Apology, Socrates discusses self-knowledge. Self-knowledge, self-awareness, the examined life — these are all different ways of saying that in order to become a functional human being, you have to know who you are right now and accept who you are today before you can move forward.

This is a good way to sum up the initial purpose of Consumerism Commentary, and how I approached my finances in the two years or so leading up to starting this website, from about the year 2001. One of the first steps to improving your finances is taking an inventory of what you own and owe — your assets and liabilities. That gives you knowledge of your financial self, at least in one snapshot of time.

But beyond the dollars and cents, you also have to know who you are. Identify the habits you have and why you have them. Identify your core beliefs about money and wealth, especially if they are holding you back. Take some time to think about your values and what kind of life is important to you. Think about your history and whether you might have been subject to any biases as you were forming your values.

Only with a full understanding, after examining your life as it is today, will you be able to make the best decisions about where to go, how to behave, and who to be.

Learn from others’ writings.

Again, this represents my core approach to Consumerism Commesntary. It’s such a difficult lesson, though. The best teacher is often experience. Someone could tell you a hundred times not to stick a pair of scissors in an electrical socket. You could know that it’s probably a bad idea. But, you still do it anyway, and the result is you’re thrown across the room. Yes, that is a mistake I made when I was a child. Perhaps it explains much about me. Or perhaps it just shows that sometimes you often can’t comprehend consequences until you face them yourself.

People in the developed world know that being in debt is bad. They know that spending more than one has in income will cause major problems in life after a while. They understand that negative net worth is bad, and they understand the basic arithmetic that quantifies that result. But this knowledge generally doesn’t prevent people from finding themselves in uncontrollable debt due to overspending. The reasons people spend money often outweigh the potential for negative outcomes in the future.

So this is why writers try to warn others about the dangers of debt. They tell their own stories in the hopes that they will connect with someone and prevent them from learning the “hard way.” Socrates wants people to learn from others, just like bloggers do.

Socrates on contentment.

Happiness was an important part of the philosophy of Socrates. And over the last few years, one idea of his started to become popular again, especially as a series of different academic studies set out to prove similar theories. There is a relationship between money and happiness. One survey pinned a happiness plateau on a certain annual salary, and claimed that increases in income above that identified salary did not have a strong effect on happiness. Another survey showed that your happiness with your financial situation has more correlation with how you perceive your situation when compared to your friends and colleagues.

The increase in popularity for a frugal lifestyle, including downsizing living arrangements, adopting the minimalist culture, and spending money on experiences rather than objects, has been partially amplified by the latest major recession and, in many cases, borne out of a need (a lack of financial resources).

Socrates — or perhaps Plato — is likely smiling in his grave. Socrates is quoted: “He is richest who is content with the least, for content is the wealth of nature.” How many writers and bloggers, including myself, have said something similar? If you can be content with less, you will not maintain a constant desire for more.

Socrates also found fault with both wealth and poverty, through Plato’s illumination of his teaching in the latter’s Republic. Both destroy someone’s ability to produce good. As one becomes wealthy and doesn’t need to work for money, he can become lazy in his endeavors and work and other contributions to the world suffer due to a lack of financial motivation; poverty, on the other hand, deprives one from the resources necessary in order to do the best work.

“Wealth, I said, and poverty; the one is the parent of luxury and indolence, and the other of meanness and viciousness, and both of discontent.”

Morality is more important than wealth.

The desire for wealth pulls people away from moral imperatives. I’ve seen this personally. With money on the line, people will often lie, cheat, steal, and extort if they’re in a position to do so. We encourage entrepreneurs and CEOs to be greedy, not just because Wall Street and large institutional investors require it of them, but because today’s society places such a large importance on financial success. The heroes in the media are not those doing the most good (though it is often argued that providing jobs for many is doing good for the world), but a small percentage of athletes, a small percentage of performing artists, and politicians.

You can see that just by looking at your social media feed. How many of your friends mourn the passing of celebrities, or consider it a great tragedy when a “beloved” actor or athlete passes? An unknown solider, a child born in poverty, the many thousands of young women sold into sex slavery — very few mourn these tragedies. But a famous actor dies and it’s the saddest thing in 65.5 million years.

We see greed as a positive attribute, and claim that success is impossible without a strong desire for not just success but its specific symbols, primarily money in the bank.

Most importantly for Socrates, morality leads to happiness. Wealth, and the desire for wealth, leads away from morality. So where does that leave us who want to strive for financial independence? Do we need to put our financial desires aside to be happy? Or can we still aim for financial independence without desiring anything beyond what we need to pursue the moral lives we would like to live without the burden of financial distress?


Published or updated November 17, 2014. If you enjoyed this article receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 3 comments… read them below or add one }

avatar 1 Anonymous

Luke this is definitely a great read. I would have to throw King Solomon and Napoleon Hill on this list as well, as they where some of the greatest financial minds that ever lived.

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avatar 2 Luke Landes

Donny,

Thanks for the comment! King Solomon did have some interesting things to say about wealth, but his intentions and feelings are not entirely clear just by reading his various quotes, and as a result people debate endlessly over biblical passages. And he is praised for being the wealthiest man of his time, but that’s not hard when you rule over an empire thanks to your birthright, and the taxes you collect and tributes you receive from subjects actually belong to you. Imagine if all the taxes we paid in the U.S. were added to Obama’s personal net worth! But King Solomon and Napoleon Hill are worth checking out, that’s for sure. Thanks!

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avatar 3 Anonymous

Great read! Most of the new “gurus” and “experts” in finance (and everything else really) aren’t people I really listen to for advice very often. Plus, there are only so many “new” ideas to be had. Most of the self-help people now are just re-hashing advice from the past anyhow.

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