Always Say No? Always Say Yes? Which Is It?
Warren Buffet is cited for the wisdom that “the difference between successful people and really successful people is that really successful people say no to almost everything.” Over the years I’ve heard any number of snippets of advice from Mr. Buffet and I have to concede that I usually find myself nodding in agreement with his folksy, common-sense perspective. It’s hard to argue with his personal financial results.
Okay, so the answer is: say “no” to almost everything. Done.
But wait! Shonda Rhimes—an executive and writer in the entertainment business that is slightly less famous but no less accomplished than Mr. Buffett—advises us to say “yes” to everything! She even wrote a book about her philosophy of all-things-“yes”.
So which is the sure path to happiness and success? “No” to everything or “yes” to everything?
Die With Zero?
What does any of this have to do with my money psychology and behaviors anyway? I would argue: a lot. And the divergence between the yes and no philosophies was forefront in my mind as I recently read through Die With Zero, a book written by ultra-high-net-worth energy trader Bill Perkins. The philosophy advanced in Die With Zero—although not expressly stated as such—appears to be a yes-to-everything approach to managing your money. At least while you’re young and healthy, Perkins argues, you should say “yes!” to everything—otherwise you’ll grow old and die with a pile of unused money and an equally sized stack of regrets.
Perkins’s thesis is that it’s dumb to aspire simply to achieving wealth as a number rather than aspiring to maximize enjoyment of life. The former leads to dying old with a bunch of unused money. And that money was acquired by giving away a significant part of your life. Instead, you should aim to maximize your utility of this financial resource by spending it while you’re young and can best enjoy it. Consider the difference, as an example, between traveling Europe at age 25 versus age 75.
And not only should you spend it all by saying yes to everything, but you might even consider taking out loans while you’re young (and income is relatively low) to finance the experiences from all of these yesses. Don’t worry—you’ll make more money when you’re older (and less able-bodied) to cover the costs of your earlier compulsive yes-ing.
Before I get carried away with what may appear to be criticism of this approach, let me highlight the points of agreement with Mr. Perkins and his Die With Zero philosophy. I actually think there are more agreements than there are disagreements. Perkins advocates first the idea of being purposeful with your money. Be thoughtful about what you get and want from it and how it will be optimally used. Agreed! Avoid falling into the rut of work for money, spend, work for money, spend. This can become a mindless habit and eventually addiction that is applauded by our culture and very hard to break. Agreed again! Don’t just float along with this cultural tide, doing what everyone else does. Be deliberate and thoughtful about the choices you make related to working, earning, and consuming the fruits of your labor. Don’t spend your best years amassing a pile of wealth only to realize too late: I can’t use it all! I want my time back!
Good advice all around.
Instead, Perkins asserts, the goal should be life enjoyment, not abstract wealth as a number. And here I think that Perkins may really be on to something important—maybe we should more regularly incorporate the idea of “life enjoyment” into our concept of “wealth.” That is, move the idea of wealth beyond a finite number or a spreadsheet analysis. What value is wealth in the abstract, as a numeral, for its own sake? If you have $100 million and are miserable, have you won? If you have zero, but are content, have you lost?
All Yes or All No: Know What Works for You
There is reason to believe that being a yes-person or no-person is, for starters, likely rooted in your personality type (see our prior discussion of the agreeableness trait here). But beyond that innate hard-wiring there is also reason to conclude that an individual can decide to move in one direction or the other, and there are pros and cons to both approaches. Yes-men (and women) create more opportunities for themselves, and are likely to cultivate a larger and wider array of friends (again overlapping with the agreeableness trait discussion). But they also tend to stretch themselves (and their finances) thin.
No-men are better able to focus resources (time, money, etc.) on top-tier objectives and thereby increase the likelihood of achieving their highest priority goals. But they may also miss out on valuable opportunities and relationships along the way.
Focusing specifically on the yes-no conundrum in the arena of personal finance, the decision seems to be: give too many “no’s” and you may accrue raw wealth but miss out on a lot of life; give too many “yesses” and you’ll have a lot of fun but never accrue enough wealth to not worry about the next dollar. This statement of the issue reminded me of a cartoon that I saw on Ben Carlson’s website A Wealth of Common Sense (created by author/illustrator Randy Glassbergen) where the financial advisory client asks his advisor to help him understand why enjoying life when he retires is more important than enjoying it now. It’s a good question and one that our financial advisor readers have, no doubt, been asked. There is no clear or easy answer, but it certainly seems that at least one response to consider is: because one of these tomorrows you won’t be able to generate income from your labor anymore, so you probably should defer some gratification today in order store up some for that day.
The proposed resolution to this contradictory yes-no conundrum is this: know yourself, choose the yes-no option that works for you, and seek some form of moderation between the two extremes. If you’re naturally wired to be a no-man—as I am—you’re never going to be content trying to say “yes” to all things and all people. But be sure to find some valued opportunities and experiences along the way that you can say “yes” to. Conduct a reality check periodically to make sure you’re saying “no” for the right reasons—not as a thoughtless reflex, but to establish healthy boundaries. And understand that too much deprivation is likely not sustainable over the long term.
If you’re wired as a yes-person, like Mr. Perkins, be careful not to waste all your resources on trivialities. Maybe most importantly—and a point that Perkins never discusses—don’t miss out on the fact that one of your biggest financial assets while you’re young is time—time for the powerful gravity-like force of compounding to work its wonderful magic. Give up the value of time early in life and it’s going to take a lot more effort on your part later in life to amass significant wealth.
One more tip for the yes-men: consider actively and consciously fighting “lifestyle creep.” This is more of an issue for yes-types than no-types. Maintaining a reasonably conservative standard of living—whatever that looks like in light of your income and future income potential—will preserve your optionality later on.
Yes or No? Maybe.
All “yes” and all “no” appear to have both worked as philosophies for success. Know yourself, seek moderation, and then have your yesses or no’s at the ready.