Apathy As a Strategy

Josh Kaufman, author of the book The Personal MBA: Master the Art of Businesshad a great post recently on what he call strategic apathy. Some highlights:

In my essay on Status Malfunction, we discussed the problem of allowing the promise of social status to warp our decision-making.

We didn’t discuss the solution: making a conscious, deliberate choice to not care about the forms of status that don’t lead us toward the fulfillment of our current priorities or long-term goals.

I call it strategic apathy.

It’s better to choose to care about things that are important to you AND things that you can influence or control. Choosing not to think or worry about things you can’t influence or control is apathy: strategic apathy. Apathy in the name of sanity, efficiency, and effectiveness.

I’ve never seen it framed like this before, but it makes perfect sense. Lifestyle creep is probably one of the biggest problems most people have when trying to save money because it usually forces them into debt. And I think sanity would be the biggest benefit from this mindset. You’re basically standing in place spinning your wheels if you’re constantly worrying about factors outside of your control. It’s wasted energy.

People assume apathy is a sign of laziness, but in this sense being apathetic is a great strategy. Every year I realize more and more that not caring about certain things in life is one of the best ways to avoid unnecessary stress and jealousy. I find myself caring much more as I get older, but about fewer things.

Here are some good examples of things you probably shouldn’t care about in your financial life:

  • Your relative portfolio performance against a meaningless index or benchmark.
  • How billionaire hedge fund managers are currently positioning their portfolios.
  • How much money your brother-in-law is making.
  • What Twitter traders are telling you about the markets.
  • The next fiscal cliff or government shutdown.
  • How many days in a row the market has risen or fallen lately.
  • Whether or not Herbalife is a Ponzi Scheme or the buy of a lifetime.
  • The brand new car or boat your neighbor just purchased (on credit).
  • That really great penny stock your co-worker told you they just bought because of an email tip they received.
  • How much your retirement portfolio has gone down (or up) in the past quarter.
  • How much money people claim to earn on Fan Duel every week.
  • People who call for a market crash every single year.
  • The couple you read about who lucked out and put their entire life savings into Apple stock a decade ago.

Another one that is a difficult concept for most investors to understand is the fact that doing nothing is a decision. This can be either a good form of apathy — if used within a well-defined investment process — or a bad form of apathy — if it means you’re continuously putting off long-term financial planning issues.

Strategic apathy is also a good exercise to align your priorities with how you spend your time in life. It doesn’t always mean living a minimalist life as some in the personal finance world would have you believe.

One of the biggest financial changes I’ve discovered since becoming a parent about a year-and-a-half ago is that I now have a greater willingness to pay for time. In the past I never would have paid money for a cleaning service or lawn service on my house for the simple fact that I could do both of those things myself. It was a matter of principle. Why waste money on something I’m perfectly capable of doing myself? Haven’t you seen the personal finance articles that show how much more that money would be worth in the future if you invested it in the market instead?

My strategic apathy is now that I don’t care about spending that money anymore if it means more time with my wife and daughter on nights or weekends. And it’s much easier to utilize that apathy when I already have my savings on auto pilot each month. It just means I have to care even less about taking spending dollars from somewhere else — another form of strategic apathy. It comes down to spending on those areas that are important to you and cutting back everywhere else.

It’s impossible to completely ignore all the noise out there these days. The sheer amount of data, information and social networks makes it easier than ever to care or be outraged about something new every couple of days. But I agree with Kaufman; it’s a good idea to care about fewer things, especially when they’re meaningless or out of your control.

Strategic Apathy (Josh Kaufman)

Further Reading:
The Worst Part About Making Big Financial Decisions

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