I heard Marc Rowan say on a podcast recently that “in the absence of policy, many things seem arbitrary.” He was speaking in the context of decision making as a fiduciary board member of a university, but I think the content of his statement is true in general.
When it comes to your money, the shape of your life–the organizing principles, the key values, the main things–will go most of the way in answering questions like:
- What will you cut when cash flow gets tight?
- What will you spend more on when you have surplus?
- Is it important for your kids that they do these things, or is it important for you to be seen as the parent of the kids doing these things?
- When you give your money away, who do you give it to and how do you say no to those you don’t give to?
- When you take risks, what purpose do the risks serve?
- What does rest look like and how will you prioritize it?
Without a clear idea of the shape of your life, these questions go from heavy-but-liftable to “what does the color yellow smell like?” That is, despite your best efforts to answer the question, it will likely be bereft of any sort of meaning. It will be arbitrary.
If you look at the Christian scriptures, you will find in both Old and New Testaments a very clear shape and set of organizing principles, and the subject of economics–both personal and corporate–is where that shape is most clear, and most difficult. It seems that the people of Israel never much filled the shape given to them, and after a few hundred years or so the Christian church only barely resembled those closest to the shape of Jesus.
But as distorted as it is, the shape is still there on offer. Perhaps your shape will be less Christian and more classical, or more utilitarian, or more libertarian, or whatever. Some shapes are I think objectively better than others, and in some cases arbitrary may be an improvement on a set of organizing principles. The bar is quite low, though. I’m confident you can jump over it.
Meaningful Returns 