Taming Frivolity

Jordan Peterson makes an interesting observation in his book, 12 Rules for Life. We tend to care more for our loved ones than we care for ourselves. A sick child or a sick parent is watched closely. Even a sick pet is taken care of. However, if we feel a little ill ourselves, we have a tendency to ignore it.

We tend to be more careful with our loved ones than ourselves. We do not put our loved ones in precarious situation. We do not gamble with what belongs to our nearest and dearest.

On the other hand, there is a tendency among most of us to take on more risk than is good for ourselves. We gamble with ourselves and our possessions. More often than not, this leads to loss.

The logical conclusion is that we should as much as possible invest on behalf of our loved ones. This will sharpen our attention. It will make us more risk aware.

I have a 7 year old son here in Porto, and I have made it a habit to think of my savings as his. He owns gold, real-estate and cash. These are good solid investments doing predictably well. The allocations are spread out. I have not made any excessive bets. This is in stark contrast to how I went about my investments when I viewed it as my personal enterprise. I made big bets for no good reason at all.

The interesting thing about this is that I feel doubly blessed when my son's investments do well. I'm full of good feelings and hope for my son. I am also relaxed about the situation. I know that the positions are sound. They are neither too conservative nor too risky. I've done my homework.

I also have three grown children in Norway. Knowing how frivolously I went about my own investments in the past, I could have decided to hold onto my inherited fortune, just to be on the safe side. However, I believe I chose the more sensible route when I decided to pass my fortune onto them together with a caveat. While they own the inherited wealth, and can do with it whatever they please, they are obliged to take care of me for the foreseeable future. Half of their capital income is going to me.

By doing this, I install the obligation of care into the inheritance. This in turn makes them much less likely to gamble.

A further advantage that comes with this arrangement is that it frees up time, because gambling is not only wasteful in terms of money, it is also a giant distraction. Gamblers spend their days looking at charts, obsessing about every little move. It takes attention away from meaningful activities. By removing the temptation to gamble, I make it easier for my children to focus their time and energy on their talents. Without the distraction of gambling, they will live better than they otherwise would.