What is essential, what is enough?

This is the question that drives the final episode of our YouTube Series, Fi-Losophy. Our discussion centers on how the philosophy of Stoicism can help you create some balance and perspective to your financial life.  At the core, this question asks us to balance between our needs, and then wrestle with the ever expanding list of wants. 

What is your essential?

Often, the idea of Stoicism conjures up a life devoid of color and focuses on austerity as a principle. As we discussed throughout the series, this is not what stoicism advocates. Instead, Stoicism very clearly encourages individuals to consider their life within a community and how to engage and live in a moral and beneficial manner to all. However, one of the clear mandates is to recognize where one has control versus where one does not. When you can release worrying about that which is out of your control, you can focus on the habits and choices within your control. Your essential then becomes what you choose to do in the community in which you live and the beneficial efforts you can bring to bear. A book that is not stoic in its nature, but has been helpful to highlight our view of money is “The Psychology of Money” by Morgan Housel.

“The Psychology of Money” explores the complex relationship between money and human behavior. Housel, a well known financial writer, delves into the psychological aspects of personal finance and investment decisions, offering valuable insights and lessons. The book challenges conventional wisdom about money and highlights the importance of understanding our own biases and emotions when it comes to financial matters. Housel emphasizes that financial success is not solely determined by intelligence or knowledge of the markets, but rather by our ability to manage our emotions and make rational decisions. Through a series of engaging stories and real-life examples, Housel explores various psychological phenomena that influence our financial choices, such as the power of compounding, the impact of luck, and the allure of instant gratification. He also discusses the role of risk and uncertainty in investing, and how our perception of these factors can shape our financial outcomes. One of the key takeaways from the book is the concept of “getting rich slowly.” Housel argues that patience, discipline, and a long-term perspective are crucial for building wealth over time. He emphasizes the importance of avoiding unnecessary risks and focusing on sustainable financial habits.

What is your enough?

Once you are able to reach your “essential,” defining your enough becomes the real challenge. There are countless financial coaches, podcasts, courses and gurus teaching you how to create a budget, manage your finances and get on track to build wealth. It’s clear why these people have a role to play, because generally we all have a hard time making this decision ourselves. It helps to have a guide, a framework, or a step by step process to follow. The social encouragement to join a community of like minded individuals who are on the same journey is also rewarding and creates a sense of shared accountability and accomplishment. In 2024, OnTrajectory is launching a series of these short groups to get your finances on track. (If you’re interested, fill out this form to join one of our two groups starting in January.) Defining your enough should leave room for you to be a benefit to all those around you and, to the best of your ability, allow you to lessen the stress you feel because of your finances. In our modern society, you may always wrestle with the desire for more, but the ability to recognize that you can be content with enough will bring an incredible amount of peace. 

We asked Penny, our AI Financial Guide, “How can a person feel peace with their finances?” The answer is a refrain consistent with planners, coaches and advisors the world over.

“Feeling peace with your finances is a combination of having a solid financial plan and adopting a healthy mindset towards money. Here are some steps to help you achieve financial peace: 

  1. Set clear financial goals: Define your short-term and long-term financial goals. This will give you a sense of direction and purpose, allowing you to focus your efforts and make informed financial decisions. 
  2. Create a budget: Develop a budget that aligns with your goals and priorities. Track your income and expenses, and allocate your money wisely. This will help you stay on top of your finances and avoid unnecessary stress. 
  3. Build an emergency fund: Set aside some money for unexpected expenses or emergencies. Having a safety net will give you peace of mind, knowing that you are financially prepared for unforeseen circumstances. 
  4. Pay off debt: Develop a plan to pay off any outstanding debts. High-interest debts can be a significant source of financial stress. Prioritize paying them off to reduce your financial burden and improve your overall financial well-being. 
  5. Save and invest: Establish a regular savings habit and consider investing for the future. Saving and investing can help you achieve your financial goals and provide a sense of security.
  6. Practice mindful spending: Be mindful of your spending habits and avoid impulsive purchases.”
The point of including an AI driven answer is to remember that the steps are well known and easily found, but harder to implement. Let’s make 2024 the year that you take the steps to feel financially free, where you finally answer the question of “what is essential, what is enough.”