You’re not thinking; you’re just being logical

Jan 15, 2020 | Blog, Financial Planning

As Niels Bohr (Danish physicist, philosopher and Nobel Laureate) apparently once told Einstein, ‘You are not thinking; you are merely being logical.’

With apologies to logic (and my overly stoic friends)

Sorry Seneca, Aurelius, and Aristotle, humanity’s greatest truths can’t be discovered by logic. If logic could answer each real question we seek, we’d answered them all 200 years ago. But I’m not just talking about the meaning of life, or where do we go when we die…

I’m also talking about what YOU should do in each financial situation.

Logic is never enough (in financial decisions)

Why do we get married when we know there’s a ~50% chance we’ll lose half our assets? If we know we can proactively avoid this, why do only 5% of marriages have prenuptial agreements? How many other financial agreements are you in where at any time the other party can leave and make a claim on half your net worth whenever they want for whatever reason they want, and you can do nothing about it?

Is that logical?

Why does our industry preach financial asset diversification as one of the only “free lunches” in investing while simultaneously letting their clients continue to earn income from one employer? One stock is concentration risk, but one employer where employment can be terminated at-will is not? We want diversification in our portfolios, but not in our skills…Even though the internet is removing and reshaping decades-long business models overnight?

Is that logical?

Why do we preach that our kids need to go to college when less than one in three use their degrees? Where in the United States student loans are the only personal debt that cannot be discharged in a bankruptcy? Did you know your Social Security checks can be garnished at 65 to ensure you still pay off the student debt accumulated decades ago?

Imagine an earnings call where a CEO of a publicly traded company announced shareholders would now be personally responsible for new debt for eternity on a research and development project with less than a 33% chance they’d need what they learned?

By the way, most information they could learn from was already available for free on the internet and library, but they felt the need to look good compared to other companies. You’d invest in that company, right?

Is that logical?

Why most people don’t ask for help, and I don’t blame them

My job isn’t to just tell you that you can’t do that; be that; go there; say that; stop that; buy that; sell it, and the list goes on…All in the name of “that’s not logical.”

Fill out a risk questionnaire—littered with bias, plug-and-chug your financial information it into an algorithm, consider the “taxable implications,” and slap you on the back with half-smile and a recommendation with a probability of success from a “black box.” Is that it?

That’s easy. That’s being logical. It’s step one.

My (real) job is to hear your whispers: subconscious thoughts you don’t notice brimming into our conversations. Not just what you say, but how you say it. Not your just your words, but your body language. What you don’t say. How you interact with your spouse. Unfortunately, true insight takes time. Patterns emerge. There’s usually a battle between two opposing values and/or a story on repeat.

So…Why are you still not doing what is financially logical? Well, why aren’t you?

I think you deserve better thinking.

You know intuitively, logic is not enough.


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