How We See The World
A thing that I have always found fascinating about families is that siblings can be raised in the same house, with the same parents, and yet be totally different. The nature-nurture debate is as old as the hills and yet I still find it amazing how the nurture, whilst seemingly being the same, can produce such wild varieties.
How many of you find that your world view, or your political leanings, or your work ethic, or your relationship to money are completely different from your brother or sister? One is right-wing, the other is left-wing, one is a hard worker, one is entitled, one is a saver, one is a spender?
During an especially lovely evening with two of my siblings (I have four) this summer I was struck by a conversation that made me realise why we all see the world so differently.
We got onto the topic of parenting (between us all we have 12 children, of similar ages), and a somewhat trivial conversation of whether kids should stay at the table until the last person has finished their meal. My immediate reaction – why yes, of course – everyone should stay at the table. That’s what we did, after all. Surely that’s teaching your kids something important (thinking about it, I am not sure what)?
My sister had a totally different view.
Why on earth, she argued, would you make all the other children miserable by keeping them at the table if they have other things on their minds. It sours the whole meal because it always ends badly. Why not just let them go off and play if they want to get down? Plus, and here was the important bit, everyone comes to resent the slow eater because they are preventing them from getting on and doing other things.
She explained her view. She was the slow eater as a kid. In a family of 7, this was a big deal for her (I don’t really remember it, of course). We would all have to wait until she had finished. All the attention (in not a good way) would be on her at the end of the mealtime. We would watch her eat. It made mealtimes an ordeal for her. She doesn’t want to put any of her kids through that.
I walked away from that evening deep in thought about how we all had exactly the same mealtime experience as kids, yet we really didn’t have the same experience at all. I had no idea how the experience had been for her until thirty years later. I kept thinking about how that compounds through our life, into much more important things than just whether we let our kids down from the table, or not.
It is our experiences that shape how we see the world and how we think it works. It’s the lens through which we see everything.
Morgan Housel talks about this in his book. ‘Your personal experiences with money make up maybe 0.0000001% of what’s happened in the world, but maybe 80% of how you think the world works.’
This is such an important point because, as Morgan explains, something that can seem crazy to one person makes perfect sense to the next. This could be parenting, money or anything in between.
I hate debt. Clearing our mortgage was a major goal for me. I know our wealth in the long-run would be higher if we had kept the mortgage and invested more in the stock market. But when I was 11 years old our family was homeless because my Dad leveraged up to embark on his biggest project to date, and the tide turned against him. Leverage and bad luck – a horrible combination. I can never undo that experience – it will forever inform my view on debt.
At the other end of the spectrum, a 20-something-year-old that has known nothing but low interest rates and a raging bull market might be happily borrowing against a stock portfolio thinking nothing could ever go wrong (of course it will go wrong).
As Morgan writes, ‘we all make decisions based on our own unique experiences that seem to make sense to us in a given moment.’
Spreadsheets and projections and simulations are helpful and should be used, but you are not a spreadsheet. ‘You’re a person. A screwed up, emotional person’ (in Morgan’s words). So whilst we like to think that we are rational, it’s good to understand that our experience will ultimately dictate the decisions we make.
Georgie
georgie@libertywealth.ky