WEDNESDAY WEALTH RECAP
- Taking personal responsibility is the only way to achieve financial freedom. Alexander Green provides insight on this crucial first step of building a comfortable retirement.
- Berkshire Hathaway Vice Chairman Charlie Munger’s recent play on a major Chinese tech stock could spell trouble for the billionaire investor. Once again, Nicholas Vardy warns of the risk that comes with investing in China’s stock market.
- Despite Twitter’s revenue increasing tenfold since its initial public offering in 2013, its share price has only declined. Wealthy Retirement contributor Jody Chudley explains why investors shouldn’t be fooled by the social media giant’s revenue growth.
EDITOR’S NOTE: Today’s article was authored by Dr. Joel F. Wade. In it, he notes there are two qualities from our ancient past that cause us trouble in our modern lives.
As you may have noticed, mindset is something we discuss frequently here at Liberty Through Wealth.
Just last week, Nicholas Vardy wrote about how investors often succumb to pessimistic thinking and are invariably poorer for it.
Today’s article sings a similar tune. After all, your mindset has an impact on almost everything you do. And changing your thinking can lead to a better life and better investments…
For those who aren’t acquainted with Joel, he is the author of The Virtue of Happiness, Mastering Happiness and his new course, Mastering Emotions, Moods and Reactions. He is also the host of The Mastering Happiness Podcast.
Joel has two courses available for those looking to take control of their emotions and life.
His course A Master’s Course in Happiness can help you take charge of your habits and your life in ways you may not have thought were possible.
And his course Mastering Emotions, Moods and Reactions can help you use these biological systems more effectively, with deep understanding and practical skills for mastering them and living well.
And he’s now offering BOTH at a lower price.
– Madeline St.Clair, Assistant Managing Editor
There are (at least) two major qualities from our ancient past that cause us considerable trouble.
Taking conscious control of them and training and updating ourselves for our present environment can make a big difference in our quality of life.
One of these is our attraction to high-calorie foods.
Starvation and famine were dire threats for our hunter-gatherer forebears. Finding enough food was always the mission – and discovering a trove of high-calorie foods was generally a cause for celebration and feasting.
When our ancestors came across the wilderness equivalent of a bakery, the best option for their survival was to eat as much as they possibly could.
So today, when high-calorie, low-nutrition snacks are everywhere and inexpensive, our inner hunter-gatherer leads us to want to eat as much as we can.
Our rate of obesity and corresponding health hazards such as heart disease and diabetes are through the roof. This is one consequence of our incredible prosperity.
This is not some moral failing or lack of character; we’re doing what our successful forebears selected for us. But what worked well for our ancestors is killing us today.
Our challenge is to adapt to our abundance by consciously and purposefully resetting our habits, taking them from hunter-gatherer autopilot eating to deliberate choices that include knowledge of how our current meals will affect our future health and well-being.
Our Bias Toward Negativity
The other leftover quality from our ancient past is our strong bias toward negativity.
Our hunter-gatherer forebears’ natural inclination when assessing their environment was to be pessimistic and vigilant. They scanned for danger in a way that kept every one of our ancestors from being eaten, poisoned, murdered, drowned, crushed… or otherwise mortally damaged (at least until a lineal descendant was secured).
The early humans who didn’t do this… didn’t survive.
Those cheery optimists of the distant past who weren’t sufficiently on guard, continuously looking for whatever could go wrong, may have had a very nice time for a short while, but they weren’t likely to survive for long.
This negative bias served us well for millennia. But in our much more peaceful, complex and abundant world today, we’re better served by understanding this bias and adapting to the new environment in which most of us most of the time now live.
The concrete consequence of this negative bias is that, as Roy Baumeister and John Tierney point out in their book, The Power of Bad: How the Negativity Effect Rules Us and How We Can Rule It, negative experiences are about four times as strong for us as positive ones.
An easy way to experience this is through some simple questions posed by Amos Tversky to Steven Pinker:
- “How much better can you imagine yourself feeling than you are feeling right now? How much worse can you imagine yourself feeling?”
- “How many things could happen to you today that would leave you much better off? How many things could happen that would leave you much worse off?”
We can all imagine a few good things, but the bad things are endless – accidents, illness, bad news, asteroids hitting the Earth… and just about anything you might see on television or read about in the news.
This negative bias includes the mistaken idea that the world is getting worse.
In his book Enlightenment Now: The Case for Reason, Science, Humanism, and Progress, Pinker removes the ambiguity about what progress is:
Most people agree that life is better than death. Health is better than sickness. Sustenance is better than hunger. Abundance is better than poverty. Peace is better than war. Safety is better than danger. Freedom is better than tyranny. Equal rights are better than bigotry and discrimination. Literacy is better than illiteracy. Knowledge is better than ignorance. Intelligence is better than dull-wittedness. Happiness is better than misery. Opportunities to enjoy family, friends, culture and nature are better than drudgery and monotony. All these things can be measured. If they have increased over time, that is progress…
And which direction we have been going in relation to these things:
… And here is a shocker: The world has made spectacular progress in every single measure of human well-being. Here is a second shocker: Almost no one knows about it.
I can hear the rebuttals to this now, because I’ve heard them endlessly from otherwise brilliant, well-informed people.
But facts are facts. And the fact is that right now with all the genuine troubles that humanity still faces, there has never been a more peaceful, healthy, abundant, literate, hopeful time to be alive on this Earth.
And yet…
We have within us a powerful vigilance for danger and woe, compliments of our ancestors. There’s a place for this, of course. There is, after all, still plenty of danger and woe in the world.
So what’s the cure?
The Antidote to Our Negative Bias
There is also a hazardous downside to weighing the negative so strongly: We overreact to bad news or negative events, and that overreaction can create trouble that’s much greater than our more primitive programming can perceive.
This is the exact reason the average investor is inclined to sell at exactly the wrong time.
In aiming for safety from the seemingly endless awfulness of the world, we limit our choices, stifle our creativity and avoid leaning into opportunities for greater flourishing.
We shrink from opportunities and consequently live much smaller, less productive and less happy lives.
The antidote is not to pretend that everything’s fine all the time, like Pollyanna, any more than the antidote to the seduction of fatty, sweet foods is to live on a rigid diet of gruel.
Our challenge is to bring our conscious awareness to this tendency. To know that when we allow our minds to entertain every horrible possibility, that these are thoughts and not the reality we’re living in at the moment.
The antidote to our negativity bias is to purposefully balance it with a hefty dose of reality, by focusing often on what and whom we have to be grateful for. Specifically…
- At the end of each day, think of three good things that happened.
- From time to time, think fondly of someone who has been a blessing to your life and why.
- Every day, look purposefully for the things you appreciate, the things you love about your loved ones, the qualities you enjoy about your work, the beauty and delight of where you live.
Every bad thing in a day needs to be purposefully countered by four good things.
Make that your goal, and you will greatly improve your own grounding in reality – and therefore your flourishing, effectiveness and joy in life.