Defining Your Financial Future

For better or worse, language has a significant influences on who we are and what we do in life.

What, for example, is the definition of the word retirement? How has this shaped your life? More importantly, is this definition yours? Or is it shaped by conventional wisdom? If you haven't formed your own concrete definition of retirement, which may be the largest single financial (and non-financial) pursuit of a lifetime, you're unknowingly allowing the conventional meaning of retirement to shape your actions—to define your life.

“Man acts as though he were the shaper and master of language, while in fact language remains the master of man.” ~ Martin Heidegger

 

Many words and terms that define your life are abstract; they may be useful for quick and general communication, but these terms can be so general that they almost have no real meaning.

Words can also be dynamic; their meanings shift in meaning over time, especially on a personal level. For example, does rich mean the same to you today as it did when you were twelve years old?

Clinging to abstract, static, conventional meanings of words that potentially define your actions and your life can be perilous, if not extremely expensive, both in financial and non-financial terms. For this reason, it's important to consciously define words for yourself and to periodically reshape the definitions, much the same as you would implement, monitor and evaluate your financial plans, as your life evolves.

Here are five words that shape your money and your life, followed by some questions to guide — but not force — your own thoughts and definitions.

 

Happiness
Are you seeking happiness? Is it something you find or does it find you? Can money buy happiness? What really makes you happy? Is it relationships with other people? Is it having or is it giving? For some added perspective, the root of happiness is hap which aligns with the meanings of other words like “chance” or “fortune.”

“Don't seek happiness. If you seek it, you won't find it, because seeking is the antithesis of happiness.” ~ Ekhart Tolle

 

If happiness is more of an occurrence or even a wonderful surprise, can it be self-created? If not, why do we pursue something that “happens?” How much money have you spent trying to catch happiness? What is the price of pursuing happiness? What might you gain if you stop pursuing it?

Rich
Does money make you rich? If so, how much does it take and how do you know you won't keep increasing this amount once it is obtained? Is money a tool for your life or is your life a tool for money? Without a concrete definition of rich, might you just be chasing the proverbial carrot that is never reached? Do you feel trapped in the so-called rat race? If money does not make you rich, what does?

“To you, being rich might mean owning a goat farm in South Carolina. For your best friend, it might mean being able to start her own business selling wine over the Internet. Whatever the case, you're probably not motivated by the money itself, but by what the money could let you be and do.” ~ J.D. Roth, Your Money: The Missing Manual

 

Which is the wiser pursuit, to get rich quickly or to get rich slowly? It depends upon your definition of rich! Is rich a state of financial well-being or is it a state of contentment and overall well-being?

Freedom
This word receives some of its greatest abuse and deception in the term financial freedom. Does money buy freedom? Are there any financially poor people who are free? Are there any financially wealthy people who are not free?

Defining this word may be as difficult and futile an effort as defining truth; however you may be served well to at least frame freedom in a similar way as did 20th century philosopher, Erich Fromm. He divided freedom into freedom from and freedom to:

    • Freedom from, according to Fromm, is negative freedom and it is based in fear because it is sought as relief from uncertainty or from restrictions placed on an individual by society (e.g. other people, government, financial creditors). Seeking freedom from can paradoxically reduce or remove one's actual freedom.

 

  • Freedom to is the healthy form of freedom because it is the form where the individual obtains the capacity to be creative, to act as the authentic self. When one obtains the means to be creative and authentic, they are enabled to reach the highest form of productivity because their actions are purposeful and meaningful; therefore, the individual is content by acting as the authentic self.
“…freedom to create and construct, to wonder and to venture. Such freedom requires that the individual be active and responsible, not a slave or a well-fed cog in the machine…” ~ Erich Fromm

 

Success
What does success look like? Is it a state of being? Is it simply reaching a goal? If you don't reach the goal, is it failure? Why or why not? Do you associate success with the acquisition of money, material wealth or social status?

“Don't aim at success. The more you aim at it and make it a target, the more you will miss it. For success, like happiness, can not be pursued; and it only does so as the unintended side-effect of one's dedication to a cause greater than oneself or as the by-product of one's surrender to a person other than oneself. Happiness must happen and the same holds for success: you have to let it happen by not caring about it. I want you to listen to what your conscience commands you to do and go on to carry it out to the best of your knowledge. Then you will live to see—in the long run, I say!—success will follow you precisely because you had forgotten to think of it.” ~ Viktor Frankl

 

If, like happiness, success is not a creation but a natural occurrence, should you be pursuing it?

The path to success may not lead where you expect.

 

Retirement
What is retirement? Is it a destination or a journey? What thought or vision does the word evoke? Is it financial status? Does one have to be in their sixties, debt-free, and have a nest egg large enough to generate 80% of pre-retirement income at a 4% annual withdrawal rate to be retired? Why or why not?

“Money often costs too much.” ~ Ralph Waldo Emerson

 

Can you see how such a large potential cost of time, money, career decisions and other life sacrifices is associated with retirement? If money is only one of the many tools to help accomplish your definition of retirement, how much money do you really need to be retired? Could you already be retired now?

Words to the Wise
All of these words are useful because of their abstract nature — they have a general, universal meaning so they are easily understood for purposes of mass communication. Be careful, though, not to allow words and terms to lead you down the paved road of social conventions. To lead a life of meaning and purpose, you must create your own path; define words and terms for yourself. There is no wrong way to attach your own meanings to words, except to ignore doing it all.

“All truly wise thoughts have been thought already thousands of times; but to make them truly ours, we must think them over again honestly, till they take root in our personal experience.” ~ Johann Wolfgang von Goethe

 

What do you think? What words do you believe must be defined by and for yourself? What conventional, abstract words do you believe have the potential to mislead? Are some of the words featured today better left without concrete definitions?

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DJ W.
DJ W.
9 years ago

I think being rich, and having freedom are the two words that differ the most among people I know. For many of my friends, freedom is simply having that coveted week long vacation in the summer, and being rich is being able to buy the latest gadget. That mindset really is very limiting and to me, is not being rich or being free at all. I think the heart of the matter is being content, and having joy in your life. If you are able to find joy and contentment, you will lead a rich and free life.

El Nerdo
El Nerdo
9 years ago

Chomsky > Sapir-Whorf, Heidegger notwithstanding. Orwell’s newspeak isn’t really possible. Linguistic relativism has been largely discredited by modern science. Not to say that questioning conventional notions isn’t a good thing, it’s just that language doesn’t have the power to cage our minds.

William
William
9 years ago
Reply to  El Nerdo

in my opinion, if you can call up the Sapir-Whorf hypothesis, then you know the formal answers to these questions.

Despite that, thinking through the answers can lead to a more fulfilled life. The formal answer doesn’t necessitate the informal.

Suzanne
Suzanne
9 years ago

“Freedom from” vs. “Freedom to”. I like this idea. When I think of being financially free I suppose I’m usually thinking of the former, which entails having lots of money so that I am not beholden to some company or person and therefore have choices in my pursuits. However, one can choose from among many options, regardless of finances. I am “free to” choose many options even if I haven’t met all of my financial goals. It may be related to J.D.s notion that the perfect is the enemy of the good.

Kent @ The Financial Philosopher
Kent @ The Financial Philosopher
9 years ago
Reply to  Suzanne

Suzanne:

Yes, drawing a distinction between “freedom from” and “freedom to” is crucial to making a distinction between money and life.

Many people spend their lives seeking “freedom from” something, such as financial debt; yet they never really clarify what they will do once they obtain this freedom.

I like to tell readers and clients that life is not a tool for money; money is a tool for life. “Freedom to” frames the idea of making money a tool for life.

No Debt MBA
No Debt MBA
9 years ago

I’m definitely looking for both freedom from creditors, work I hate etc and freedom to pursue my interests. I have the former, but I’m still building my nest egg for the latter. I think it’s difficult to claim you’re free if you still depend on working for someone else to supply your basic needs.

Mayct
Mayct
9 years ago

I have to disagree with not pursuing happiness. Part of being happy is figuring out what does and doesn’t make you happy. Gretchen Rubin has a whole blog and book dedicated to pursuing happiness and makes a strong case for being proactive about it.

Paul Puckett
Paul Puckett
9 years ago
Reply to  Mayct

Gretchen Rubin’s book and blog are both outstanding.

Kent @ The Financial Philosopher
Kent @ The Financial Philosopher
9 years ago
Reply to  Mayct

I’ve never read Gretchen Rubin’s book but I’ve read her blog a few times. I noticed that she has quoted Aristotle and used some of his ideas of happiness. Truth be told, today’s meaning of happiness is not the same as it was in Aristotle’s time. The ancient Greek’s word for happiness was “eudaimonia,” which has a closer translation to “contentment” or “flourishing” or “well-being.” Today, the meaning of happiness is closer to the word “pleasure;” happiness today is often the result of obtaining a reward that can be easily consumed — it is fleeting. Personally, I prefer the way… Read more »

Paul Puckett
Paul Puckett
9 years ago

Wow, thanks JD for this guest post from Kent Thune. With the recent Prudential Survey indicating 44% of Americans have decided to not invest in the stock market, advice like this guest post is very needed. Money is not your life, or at least it shouldn’t be, but it is the means to the life YOU want! Kent’s very thoughtful and thought-provoking post sums this up very well: “Is money a tool for your life or is your life a tool for your money?” El Nerdo’s point above is valid, but I think words reflect our thoughts and can indicate… Read more »

Debbie M
Debbie M
9 years ago
Reply to  Paul Puckett

I like the word “try.” I’m sure sometimes using that word leads people to not trying as hard as they otherwise would. But if I had to say “do” all the time, that would limit me. It’s okay to try and fail at things. When we don’t know which ones we’ll fail at and which we’ll succeed at and which we’ll semi-succeed at, it’s good to try lots of the good ideas, just in case.

Kent @ The Financial Philosopher
Kent @ The Financial Philosopher
9 years ago
Reply to  Debbie M

Great point, Debbie. I believe you and Paul would both agree that trying and doing are both actions!

Paul Puckett
Paul Puckett
9 years ago

If you never try, you will never do. I agree with Debbie’s comment, particularly, “It’s okay to try and fail at things.” Thankfully, it is, otherwise we would all be something other than OK!

Danielle
Danielle
9 years ago

This is such a perfectly timed post for me, as I’m currently at a split path and not sure which is best. I’ll be defining these words in my own terms in order to help me decide what to do.

slug | sunkcostsareirrelevant.com
slug | sunkcostsareirrelevant.com
9 years ago

Love the Emerson quote – “Money often costs too much.” It’s amazing how long it takes some people to figure this out. It’s even more amazing the number so self-deluded that they never do.

Rosa
Rosa
9 years ago

The “how much is rich” question is where we are right now – we finally reached agreement on a cap for the emergency fund, so we can divert some of the cash flow we were using to build that up to something else. I think we’ll have the same problem with “retirement” in the future.

Since the future is unknown, if money means safety or success to you, there’s no end to accumulation unless you get your rational mind to set one.

Kent @ The Financial Philosopher
Kent @ The Financial Philosopher
9 years ago
Reply to  Rosa

Good point Rosa:

If you never have “enough” you will never be rich, no matter what level of financial wealth you may acquire.

Avistew
Avistew
9 years ago

I wonder if Thune knows that his last name is French slang for “money”.

Kent @ The Financial Philosopher
Kent @ The Financial Philosopher
9 years ago
Reply to  Avistew

Ha! Ha! I’ve never heard that before. I can rest easily knowing that my last name, Thune, is Norwegian and the meaning comes from a type of fish (My family immigrated to the U.S. from Norway approximately 120 years ago).

Perhaps I could align myself with the fisherman’s parable: http://www.thefinancialphilosopher.com/2010/06/the-fishermans-parable.html

Words and names have different translations in different countries.

sarahkincheloe
sarahkincheloe
9 years ago

It’s important to stop and think about what really matters before making too many decisions. Words are a good place to start.

The word “retirement” has always had a very negative connotation for me, I’m not sure why. I don’t know of anyone in my family that’s ever retired (they die early or are too poor to stop working). I don’t think about “retirement” per se, I just tell myself I’m setting aside money for later.

Tyler Karaszewski
Tyler Karaszewski
9 years ago

Because we’re discarding the “conventional” definitions of words, I have interpreted this post with my own meanings. I don’t see why GRS is an appropriate place to post a confession to the murder of Jimmy Hoffa, though. For others who are making up their own definitions of words instead of relying on the ones that other people will know, and can therefore actually be used to communicate: Monkey orange run flower fall in kick lovely donkey trip sky. It means whatever you want it to mean, apparently. Because a word like “happiness” describes an abstract concept does not mean you… Read more »

E. Murphy
E. Murphy
9 years ago

Sigh. I just love it when Tyler weighs in.

El Nerdo
El Nerdo
9 years ago

“When I use a word,” Humpty Dumpty said, in a rather a scornful tone, “it means just what I choose it to mean–neither more nor less.” “The question is,” said Alice, “whether you can make words mean so many different things.” “The question is,” said Humpty Dumpty, “which is to be master that’s all.” Without going into Humpty Dumpty’s extremes, words don’t have absolute definitions; definitions are socially constructed and change with usage. Dictionaries are repositories of current accepted usage around the time of their printing, not permanent declarations of meaning. Furthermore, definitions are just made up of other definitions,… Read more »

Random Anonymous
Random Anonymous
9 years ago

I was also confused by the references to the murder of Jimmy Hoffa.

Kent @ The Financial Philosopher
Kent @ The Financial Philosopher
9 years ago

Tyler: You summed up my post quite well (although I suspect unintentionally) with your words: “I understand this post is supposed to be about making conscious choices, but I just can’t get past the fact that it’s framed in the context of choosing new definitions of words to make that happen, which is ridiculous.” You are correct: The post is about making conscious choices. It’s also about having a healthy perspective. I respect your conscious choice to describe some of the ideas in the post as “ridiculous” but the primary idea is not to completely change the meanings of abstract… Read more »

bkwrm
bkwrm
9 years ago

I guess I’m sort of coming from the opposite perspective. I was always taught and believed that money can’t buy happiness. It can’t. I know that. However, I’ve lived many years below the poverty line and I’ve lived a few years above it and, all other things being equal, I’m much, much happier above it than I was below it. I do not truly care about being rich. I do want to be secure. When my husband and I retire, I would like to be able to afford basic living expenses and medication without having to be a Walmart greeter.… Read more »

Annemarie
Annemarie
9 years ago
Reply to  bkwrm

Yep, it’s a sign of (perhaps modest) luxury that one can sit around wondering what words mean and defining happiness.

Not that I’m saying it’s bad. Leisure is the basis for culture, and all. Just that there are an awful lot of people who are just getting through the day.

Tina B
Tina B
9 years ago

I loved the post.

Debbie M
Debbie M
9 years ago

I think of “retirement” the same way kids think of growing up–it’s that magical time when we finally get to do whatever we want. Now by the time you’re a grown-up, you’ve generally been brainwashed into either wanting to do the things your parents have been telling you to do or at least brainwashed into doing those things anyway. Nevertheless, I’m very glad to be a grown-up because, although my parents were awesome and I had lots of freedom, I do greatly enjoy the added freedom of setting my own priorities and having more of my own resources and abilities.… Read more »

SB (One Cent AT A Time)
SB (One Cent AT A Time)
9 years ago

Incidentally I posted on similar topic on my blog. I talked about 4 poly morphs of being rich; Monetarily, Socially, Emotionally and Spiritually.

your attending to richness depends on how much of what poly morphs you aspire for.

Steve A. Linderman
Steve A. Linderman
9 years ago

“Progress” is the word I find people have the most trouble with, especially me. Everybody has a different idea of progress. For people that only define it as a global thing, then they miss the personal journey that we all have. Progress to all and have a great summer!

Kent @ The Financial Philosopher
Kent @ The Financial Philosopher
9 years ago

Thanks to J.D. for another guest post opportunity and to the readers for your comments that extend beyond the post. One can read almost any GRS post and see in the comments that readers have differing perspectives of the world, especially with personal finance. This post does not suggest one should create all new meanings of words but rather to be careful of following in the path of social conventions — to create one’s own path by making abstract words, such as retirement, more meaningful and concrete for the individual — to find one’s own meaning and purpose in life,… Read more »

Lori Blatzheim
Lori Blatzheim
9 years ago

Thank you Kent Thune.
I think you are positioned exactly where you should be, outside the box. You are looking in and watching the challenge for individuals hit by words. These come from well meaning friends,family,and sometimes, strangers trying to manipulate our lives.
Some of us are taking the “path less traveled” and receiving great and unexpected fulfillment.

Bella
Bella
9 years ago

great post – good food for thought, thanks Kent and JD

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