The Latin expression "carpe diem," which can be translated as "enjoy the
day," has been elevated to a main component of our culture. The most
popular interpretation goes as far as recommending people to "live for
the day." This advice comes often accompanied by sneering remarks about
those who save for the future.
With carpe diem as a motto, you won't go far
The sad story of artists and
athletes who make a fortune and end up bankrupt a few years later is
told by newspapers with monotonous frequency. The message seems to be
that there is no other way or, even worse, that human beings are unable
to learn from someone else's disgrace.
Nevertheless, an objective
assessment of the problem shows that the great majority of middle-class
citizens in any country never go bankrupt. This is not a coincidence,
but the proof that self-discipline and common sense are widespread in
society.
Short-term thinking inevitably brings about negative consequences
The horrid reports about financial irresponsibility that
one sees on television represent conspicuous exceptions to the prudent
mentality of millions of working men and women. This is not a new
phenomenon and, without much effort, we can find traces of similar
events in previous centuries.
The liquidity crisis that took
place in London in the year 1826, almost two hundred years ago, was very
similar to what we have experienced in the initial decade of the 21st
century. Thousands of investors lost their fortune, including many
famous personalities, such as the Scottish novelist Walter Scott.
You
might know Walter Scott from his historical novels, such as "Ivanhoe"
and "Rob Roy," which belonged to the the best-selling books of his time.
If Scott had adopted the discipline of living within his income, which
was considerable, he might have enjoyed longer and certainly healthier
years.
Unfortunately, he overextended himself by investing in
ruinous printing and publishing ventures, as well as by purchasing a
large extension of land and building a majestic residence. When the
businesses in which he had invested went bankrupt in 1826, he still had
to face massive personal debts, that he was unable to reimburse.
There are important lessons to be drawn from the study of people who think only short-term
During
the next years, he worked frantically, trying to write more books to
pay off his debts. His health deteriorated rapidly and, finally, he died
in 1832, physically and financially exhausted, when he was only 61
years old. Was it worth it that he had incurred huge personal debts in
order to build a mansion? These are some lessons to draw from such
stories:
1. Live below your means.
2. Save some money every month, even if it is a small sum.
3. Take insurance to cover critical risks, such as major surgery or invalidity.
4. Conduct your business or profession in a prudent manner.
5. Choose slow but safe growth over wild and risky expansion.
6. Diversify your investments amongst many different assets.
7. Stay away from profligate individuals or businesses. Their tales seldom have a happy end.
Embrace the virtues of prudence and foresight
The
virtues of prudence and foresight constitute the backbone of civilized
society. Despite the negative stories presented by the media, millions
of working men and women possess the habit of planning for the future.
In fact, their prudent conduct and the ensuing peace of mind are what
render them uniquely able to "enjoy the day."
For more information about rational living and personal development, I refer you to my book about how to be rational "The 10 Principles of Rational Living"
[Text: http://johnvespasian.blogspot.com]
[Image by Tony Fischer Photography under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]
Experienced managers tend to focus on a few key parameters that tell
them how their business is doing. Seasoned investors proceed in a
similar way. Since they know the kind of opportunities they are looking
for, they are able to discard unsuitable investment proposals after
checking a couple of critical figures.
You don't need all the numbers, you only need the crucial ones
No one can take correct
decisions without knowing which elements are important. Gathering huge
amounts of data will prove useless if complexity cannot be reduced to
manageable levels. What you need are simple graphics or tables that show
you how you are doing presently and what the trend for the future is.
When
it comes to running your own life, could you reduce information to a
small number of factors? Is it possible to simplify reality to such an
extent? Can a few numbers suffice to express your level of happiness?
Can we isolate the crucial components of our existence and make
projections for the next decade? Here are some examples:
1. The general condition of your health.
2. Income from your main business or activity.
3. Overall level personal freedom.
4. How many close friends you meet regularly.
5. The size of your bank account and other liquid assets.
6. Level of satisfaction with your home and living environment.
7. How you rate the non-monetary aspects of your principal occupation.
8. Happiness derived from your spouse and other family relationships.
9. Overall perspectives for personal growth.
A few parameters is all you need to get a clear picture of where you are
If
routine fills most of our days, we should not allow random events to
eat up the little free time we have available. Becoming conscious of the
status in each area of our life and pushing for improvement requires
substantial effort. Reducing situations to fundamental numbers can
contribute to remind us where we stand and where we want to go.
More
often than not, one or two figures should be enough to identify the
issues closest to our heart. Even when we deal with immaterial elements,
such as the non-monetary aspects of a business or profession, we should
force ourselves to come up with a number.
Let us establish, for
instance, where we are today on a scale from zero to ten and where we
want to be in a year from now. In a similar way, trainers encourage
overweight people to track their slimming progress by means of a simple
graphic.
The ability to make fast and correct decisions is crucial for achieving happiness
The sheer exercise of decomposing our life into its main
constituents can prove highly beneficial. Turning observations into
numerals may, for example, allow latent irritation to be verbalized. The
first time that someone takes the time to write all this down
frequently results in a couple of surprises.
In fact, if you can
figure out the way to do it, the only number that you need to watch is
your overall happiness index, where it stands today and how to extend
the years you have left in order to raise it to the highest level.
For more information about rational living and personal development, I refer you to my book about how to be rational "The 10 Principles of Rational Living"
[Text: http://johnvespasian.blogspot.com]
[Image by attawayjl under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]
