In Athens, around 300 B.C., the ancient philosophy of stoicism was established. Because stoicism offers a helpful and pragmatic perspective on life, it has become more and more popular in recent years. Additionally, it can be used to wealth-building, which is one of the tenets of stoic investment.
You get better at money, building wealth, and investing if you’re a stoic. Stoic investing techniques help us control our emotions and concentrate solely on the things we can control—letting go of the things we cannot.
In the words of the ancient Stoic philosopher Seneca:
You never consider your weakness or the amount of time that has passed; instead, you live as though you were meant to live forever. You waste time as though you had an endless supply, but in the meantime, every day you give to someone or something could be your last.
Stoics recognize that time has a finite supply, unlike money. Because of this, many stoic investing techniques emphasize the importance of being in the present and using time as an ally.
How does stoicism relate to investing?
Thinking long-term rather than short-term is central to stoicism. When it comes to investing, it refers to making financial decisions today in order to save effort later on.
Practically speaking, stoic investing can entail the following actions:
Investing should be done to create long-term wealth rather than to make large purchases. A common reason for this is that people want to acquire a lot of money so they can purchase a new automobile, a larger home, or more travel. That is not how a stoic investor should approach investment. Just think of investing as a means to grow your money so you may purchase freedom rather than material goods.
Don’t speculate with money you can’t afford to lose. If you do decide to trade stocks in hopes of making quick money, be sure to hedge against loss. Use money you can afford to lose only on riskier wagers.
Remain invested despite market downturns because stock market fluctuations are unpredictable. Investing is what you have to do throughout.
Invest regularly: The idea is to set aside a specific portion of your monthly income—10% is a good place to start. You’ll invest more money as you get more money.
Regarding money, what were the ancient Stoics saying?
The “big four” classical stoic philosophers are Musonius Rufus, Seneca, Epictetus, and Marcus Aurelius. In my book, The Stoic Path to Wealth, I go into further detail about them.
These four philosophers all stressed the need of leading a modest, frugal life and avoiding being unduly dependent on material belongings.
As Epictetus said it so well:
“Having few wants rather than many material belongings is what defines wealth.”
It is untrue, nevertheless, that the ancient Stoics disapproved of wealth. Rather, they emphasized the significance of being detached. Seneca said as follows:
The wise man does not believe that he is undeserving of any gifts from Fortune; rather, he would prefer to have wealth rather than to hate it; he does not welcome wealth into his home or into his heart; and whatever wealth he does have, he does not reject it but holds onto it in the hopes that it will give him more opportunities to live virtuously.
Although obtaining riches is necessary for freedom, we shouldn’t let it control us. The secret is striking a balance between ensuring our loved ones’ and our own financial security and realizing that true happiness cannot be attained by material belongings alone.
According to Marcus Aurelius:
“Greatness is not found in material prosperity and social standing, contrary to popular belief, nor is it found in one’s intellectual prowess, which is frequently linked to the lowest moral standards… True greatness is the awareness of a sincere life goal, based on a fair assessment of oneself and everyone else, regular introspection, and unwavering adherence to the path one knows to be correct.
Musonius Rufus concludes by reminding us not to get too caught up in the pursuit of accumulating money. Sometimes, the goals we have for our lives and careers lead us to pursue financial success. And that’s acceptable as long as we keep in mind not to waste time—our most valuable resource. As said by Rufus:
“Unless you approach today as if it were your last, it is impossible to live well.”
True prosperity and contentment, according to the ancient Stoics, result from being content with what one has rather than constantly desiring more. Remaining detached from material wealth or goods is crucial.
The Wealth Triangle of Stoicism
How might a stoic approach to goal-setting for investments be applied? I’ve discovered three methods for accumulating wealth and leading happy lives.
