Five things that Ancient philosophy taught me about money...

What's the relation between philosophy and money?  

 “I don’t know if i wanna read all this article, can you quickly tell me what this is all about?”

Sure no problem.

In this article i will tell you about five philosophical lessons that can be used when dealing with markets and money in general. The first one is a discussion when i show you my opinion that is not possible be happy with no money. The second one i tell you about a distinction of the skills to acquire money versus the skills to use it wisely. The third part of the article i will make a quick discussion about which things you need to buy and which things you don’t. Than, in the fourth part i tell you about why i believe you need be as rational as possible to be successful when dealing with money and investing. For the last part of this article, i tell you how i deal with chaos and indetermination of the markets and how you can change your focus to the things that really matter, the things that are in your control.
If you decided to read, have a good reading. If don’t, i hope my next article is worth your time. Have a nice day =)   
 (Remember that english is not my main language, so if i mispelled something, sorry.)

YOU CAN’T BE HAPPY WITHOUT SOME MONEY.

This is a very controversial point, here is what i think.

One thing that Aristotle wrote about ethics that i find very interesting is that the happiness (eudaimonia) is only achieved by a person that have 3 things: 1) have a material life (properties/money), 2) have a social life (political life) and 3) have time to think about life itself (philosophical development). For him, to achieve happiness you NEED this three things, to Aristotle, there is no happy life without the material aspect of being.

In fact, in his main book on Ethics he writes a lot about the material life. He talks about economics (the knowledge about how to use/administrate your money in the best possible way) and about how to maximize the money making process (khréma atos).

It is a common misjudgment that all the philosophers did not cared about money at all. Some of them cared about money, and Aristotle is just one of them. When i first read Nicomachean Ethics i was like “This is bullshit”, but today i think he was right. Just think about it.

Think about the life that you live now. Probably you have a house with Internet and a computer, maybe you have a car, eventually you go eat at the restaurant with your family and so on. Could you be happy without all those material things? Answer to yourself.

For some people the answer is yes, but for me the answer is no. 

I think it is possible to survive with no money, but surviving if not the same as living a plentifull happy life.  Sure there are philosophers that believe happiness is a pure interior state of the soul, with no relations to the material life (medieval philosophers), but i disagree. I believe the interior of your body (soul) is important to achieve happiness however i also believe that the exterior of your body have a direct influence on your soul, in a way that is harder to be happy if the exterior of your soul is miserable.  Keep in mind that i am not saying that you need to be very rich, or even rich to be happy. All i am saying is that you need, in my opinion, at least some money to live a good life. How much? This answer is not easy to answer, it lead us to the next topic.

 ONE THING IS MAKE MONEY, ANOTHER THING IS USING IT.

Remember in the last topic when i talked about Aristotle Ethics book? In that book he makes a distinction about making money and using money. For him, the wise use of money is a superior thing compared to the money making process.  

He believes that the money making process is considered in his philosophy just a step to have money to spent. On the other hand, having money to spend, and how to spend money in the wisest way possible is an end on itself, so it is superior.

But why this is important?

During my lifetime i saw a lot of persons with high money making skills, but with low money administration success. I am talking about people that makes a lot of money but no matter how much money they have, they are always poor.You can be a successful lawyer, doctor, artist, engineer and so on, but if you don't master the money administration process, chances are that you will be always a poor person.

On the other hand, if you have low money making job (you don't make a lot of money per year) and a high money administration skills you will probably be also poor, for a very long time of your life. Maybe in the long run (20 years) you will have a substantial amount of money, but the process of getting rich will be super slow if you are not good in the money making skill. 

 As you can see, both things are important. 

One is kinda superior to the other but both complement each other. 

If you want to have a good financial life (which is important to be happy, i already told you that) you need to know how to make money and how to administrate the money that you made. Lucky for us, nowadays there are a lot of ways to get money and also a lot of ways put our money in good use.

In Ancient time you had a very limited amount of opportunities to make money (basically or farmer or a warrior) and few opportunities to invest (farm or urban construction). Now our times are easier, but this do not mean that our success will come without the effort.

 
THERE ARE THINGS THAT YOU NEED, AND THINGS YOU DON'T.

One famous event of the Socrates life was when he was walking to the local market looking all the products there, without buying anything. Someone then asked him “ Socrates, why did you came here to the market if you are not willing to buy?” Socrates replied “What a lot of things i don't need”.
 

Behind that Socratic statement there is a very important life lesson.
In your life you will find a lot of things to potentially buy, a lot of things to drop your money in. However, not all this things you really need, somethings are just a waste of money. 

When you buy things that you don't need you are throwing your money away, and the consequence of that is that you will have less money on the long run.

So you need to know which material things you need to be happy in your life and which things you don’t need. This is a subjective thing, i can't help you with that, only you know what you need and what you don’t.

However i can share my point of view about that.

To myself, i think for me to be happy i need: some place to live (like a house), someway to going from point A to B (like a car), something to stress myself out (like a videogame), someway to get information (PC with Internet) and some ok food. 

I don't feel like a need travel to be happy, i also don't feel like i want change my clothes every 6 months and so on.

Like i said, it is a subjective thing. 

But you need to know yourself (Also, this is a Socratic life lesson) and by knowing yourself you can answer what you want to buy and what you don't want.

And knowing that, i stop spending money in things that i did not needed.

Unfortunately, knowing yourself is a very hard task, like really really hard. And because of that, the biggest majority of people will keep spending money in things that they don't need, forever, until they die. Most of the people, during their lifetime, will be slaves of the will to spend money. 

Are you one of them?

 BE RATIONAL WHEN DEALING WITH MONEY.

I know, i know, this is very common advice. 

Everybody that works with investments always tells you that.

You probably heard from them “you should diversify” and they tell you that for the following reason: If you diversify the places where you put your money in you will reduce the chances of losing all your money. If one place that you putted your money falls to the ground you will lose only a fraction of your money. Thats sounds smart but i think you should diversify for another reason.

My argument here about diversification is that you should diversify because you will have LESS EMOTIONAL CONTACT with the source where you putted your money in. With less emotional contact will be easier for you to remove your money from that place when needed, to cut your losses when that market goes down. 

I had a friend that invested enough money to buy a good car in a cryptocurrency called raiblocks (now called nano), he was so emotional involved with that coin (because of the hype) that he got blinded and lost a lot of money in it, when the price went down. 

Let's be clear about one thing, i am not here talking bad about the nano, may problem was my friend attitude with the coin.

This is just an example of how you can lose money if you don't use your reason to invest. 

Aristotle once said that the main characteristic that differentiates us from the others animals is the ability to be rational, there are others characteristics like the language, but the main one is the ability to think in a rational way. 

If the nature gives you this fenomenal gift, of being a rational animal, why not using that in your life? Why not using that in your financial life?

I am not saying that you should be rational all the time, also i am not saying that you don't need to be emotionally involved with investments, but i think you should manage your emotions because they can be bad for you, if they are the main factor that drives your decisions about money.

(There is some positive results from emotions, for example, if you are very emotional involved with some investment you will read a lot more about it, and end up knowing much more about it than the others, but there is a high risk for you also to get blinded by your passion and put all your money in a bad place.)

 THERE ARE THINGS YOU CAN CONTROL, AND THERE IS THE MARKET.

One main philosophical concept on Epictetus philosophy is the “In life sometimes you have control and sometimes you don't”. This at the first moment looks a very obvious statement, but you will be amazed of the amounts of people that live their lives ignoring this fact. This main concept about his philosophy is a very big thing with a lot of implications, but let’s focus ourselves on how this can be used in economics. 

When investing on something, you have the control of which thing you will buy (it is your decision to buy x or not buy x) but you don't have the control of the results of things that you bought in the market. Sometimes you buy a piece of a corporation in the stock market, and after that the price of that company falls down and you lose a lot of money, this happens everyday. 

The reason why that happens is fact that the market has so many variables that influence the price of it that is almost impossible to guess the correct price in the future. This is what i call the chaos factor of the market. And then i ask you…

Why you care so much about one thing that you can't control? 

No matter how much you care, it is impossible for you to change or determine the price in the future, it is out of your zone of control.

When dealing with money you only have the control of which things you will buy and also when is your time to leave that specific market, and i believe that you need to focus all your energies in improving this two characteristics. Why? Because that is the only things you can control in the market. You can’t control the ups and downs in the market, why waste your time getting worried with it?

Your time must be invested in improving this two that i already told you (which things to buy and when to leave),  but how you do that? You need to find a lot of knowledge by reading a lot and also use your rational ability to think about the things that you read.

There is no point of reading a lot and not think about the things that you read, that another waste of time.

If you search for knowledge and use your reason to think about it, your chances of success in the market will go up. However there is no guarantee that you will success, sometimes you will just be unlucky, like a said, chaos is a characteristic of the market. But people that use their reason on things that matter tend to be more successful than the people that dont.   
 

Final words

It is funny how philosophy is. The knowledge that i told in the article that you just read is like 2500 years old, but it is still, at least in my opinion, so much worth it. This was my first official post on Steemit (after the @introduceyourself) and i think i can do better. What did you think about the article? Can you live a good life without money? Is reason inferior to emotional when dealing with markets? My plan is to keep writing about philosophy in general way like this. Next week there will be another article like this. 

Thanks for reading and have a nice day.
Zero.