FREE NEWSLETTER
Go to main Forum page »
We often talk about narratives—the stories we cook up to explain why, say, the stock market went up yesterday or why our favored political candidate didn’t get elected. These stories are simplified versions of what actually happened and they may take liberties with the truth, but they also help us to make sense of the world.
But what about the narratives we tell about ourselves?
Most of us have a collection of jokes and anecdotes that we tend to repeat, often prompting eye rolls from our spouse or kids. The more we tell these stories, the more polished they become. We ditch the unnecessary elements. We get better at delivering the punchline.
The same happens with our financial life story. As time goes on and we have more practice, we get better at explaining why we behave the way we do. We have a narrative we tell, but that narrative takes on a life of its own and, after a few years, it may bear little resemblance to the truth.
Maybe there’s no great harm in this. Still, there’s a risk these narratives become an obstacle to truly understanding our own behavior. For instance, here are three stories I tell about myself:
Frugality. My two older brothers were frugal as kids. From a young age, they always had more money than me, which wasn’t surprising: As soon as I got my hands on any cash, I almost always spent it right away.
That habit waned through my teenage years, but it didn’t stop me from amassing a modest amount of credit-card debt during college and my first year in the workforce. Then I got religion, paid off the debt and haven’t carried a card balance since.
What changed? I have two narratives I tell. First, there’s the story of the great family fortune that got vaporized. When my great-great-grandfather died in 1888, he was reportedly one of England’s wealthiest men. That fortune was all but gone two generations later. It’s a slice of family history that my mother often recounts, and I certainly feel it influenced my financial habits.
Then there’s the second story I tell, about what I call the “lean years.” A year after I graduated college, I moved to the New York City area, and soon found myself supporting my graduate-student wife and two young kids on a junior reporter’s salary. I had no choice but to be thrifty.
Which of these two stories is true—or are they both true? Perhaps neither is. Instead, maybe I’m naturally thrifty, just like everybody else in my family, but my frugal nature didn’t emerge until my adult years.
Ambition. Last year, I wrote about being bullied at English boarding school, and how—when I left school—I consciously reinvented myself as someone more outgoing and confident. I believe that adopted self-confidence, coupled with a willingness to sacrifice now with an eye to getting rewarded later, was the reason I had a reasonably successful career.
Or was it? Again, I wonder whether this is just a story I’ve taken to telling, and that perhaps I was always ambitious. For instance, I remember at age 10 or 11 talking to my mother about how, as an adult, I’d like to write books that popularized key periods in history. Of course, I ended up writing not about history, but about personal finance, but it seems that even at that young age I had some sense for where my talents lay.
Optimism. I don’t consider myself a risk taker. I’ve never skydived. I don’t drive especially fast. I only started working for myself when I knew I had plenty set aside for retirement. And yet, for decades, I’ve had 80% or 90% of my portfolio in stocks.
I attribute this not to risk-taking, but to an enduring optimism that things—economically speaking—will turn out fine. Where does that optimism come from? I never needed to be bailed out by my parents. Still, even during the “lean years,” I had confidence that they would help out financially if things really unraveled. That sense of financial security helped to fuel my optimism. But again, as with my frugality and my ambition, I wonder whether this optimism is just a character trait I was born with.
What stories do you tell about yourself—and are you sure they’re true?
Here is a story I would tell about my having a strong work ethic. When I was in high school, I ran cross country and track. There were four teammates of mine who lived in Ladera Heights. In the 1960s, it was a wealthy unincorporated community in Los Angeles County. Back then, a few professional athletes and celebrities lived there. I lived in Inglewood, more of a blue collar, working class community.
Some of the Ladera Heights kids drove new cars, like a Plymouth RoadRunner or a Chevrolet Camaro, to school. I drove a 1956 Chevrolet Bel Air, with a Earl Scheib paint job costing $29.95. They owned stocks. At that time, my parents didn’t even own stocks.
I could never beat those four kids in a race. They were too good. I had a kind of defeatist attitude about it. “How can I compete against those guys when they have all that stuff going for them?”
Then later, I found out why I could never keep up with them. They out worked me. They trained all year round. They ran during the summer and weekends, while I hung out with my friends. That’s when I learned, I need to give a 100% effort if I want to succeed.
Or was it because my parents were hard working folks? When I was young, it seemed like my father was always working. My mother worked just as hard. She would cook our dinner before she left for work, because she wouldn’t get home until 8:00 in the evening. For many years, Sunday was only day that my parents were able to spend some quality time together.
I describe people as spenders or savers; my years as a CPA confirmed this. I have always been a saver, starting with a savings program in elementary school. Even now, a settlement check for a few dollars from a class action lawsuit goes into the bank. My Black Friday shopping is for a few tools for my shop, if I can convince myself I really need them!
Jonathan, as you pointed out, it’s not always our family background and upbringing that forms our characteristics, as siblings can have such differences in character, nature and personality.
We can ponder about our human condition and how some of our attitudes are shaped early in life; along with the fact that there are some traits we are born with.
While we can all adapt to certain behaviors, even if they go against our natural tendencies; in the end, we are who we are. While attitudes may change, a man or woman, is stuck with their nature, whether they like it or not.
You forgot a very important, and inherent part of the mix that makes Jonathan tick— Your intellect and your canny ability to thoroughly think matters out, and convey them concisely and clearly, so evident in your writing.
Provocative post Jonathan, something I have never considered.
I was a total under achiever through both grade school and high school. My reading skills were several years below my grade level. Teachers convinced me to enroll in a speed reading class being offered after school. My reading skills were transformed in a matter of weeks. Still, improved grades didn’t happen overnight, I graduated in the bottom quartile of my class. I continued my slacker ways during the first year of my abbreviated college experience. Then something changed. School began to make sense for me, and my final 30 or 40 credit hours resulted in a 4 point GPA.
I have told this story many times, crediting that reading class with my eventual scholastic transformation. But was it the reading class or did I just grow up? Was it a new level of maturity that just made me exert more effort? I truly don’t know.
I remember the machine that was used speed reading. I thought that it made a difference, but now that I’m older I’m still a pretty slower reader. But since I’m retired reading speed is a non factor.
I agree Dave. Sometimes I use the technique to scan when looking for something specific in an article or document. Otherwise I read in real-time. For me the best thing about the class was learning to enjoy reading.
I think I have always been frugal. I don’t think I’ve ever short changed other people, just myself. It’s always been delayed gratification.
The story I tell myself is this mindset was established when I was about 5 years old. My parents were spendthrifts who lived paycheck to paycheck. But they were very loving parents. What I remember is waking up at night hearing them argue, loudly, about money. And I vowed, even at that tender age, to never let lack of money determine my happiness. To me this is a true story, but is it really?