08 Jul 2021 In Praise of a Quiet Life

“By being in the top half for 14 years, he was in the top decile for the whole period. And I thought that was a great realization.” 

I heard Howard Marks—the co-founder of Oaktree Capital Management—say that on a podcast a couple weeks ago. He was discussing a lesson he learned in the early 90s from a pension manager who for 14 years had not had any one year of significant outperformance, but had also not seen any underperformance, and at the end of the 14 years he was in the 4th percentile across his competitive universe for the whole time period. The point is, as Morgan Housel noted, “Average returns for an above-average period of time = extreme outperformance.” 

Those closest to me tell me I have lots of strong opinions about things that don’t matter, which is certainly true. Mostly it’s true because I tend to have strong opinions about everything, and things that don’t matter are a large part of “everything.” But I do have one or two strong opinions about things that I think are actually important, and I want to share one of those today:

It is okay to live a quiet, ordinary life.

Nothing about your life has to be spectacular. You don’t need to be on a 40 under 40 list. You don’t need to “accomplish” anything that will ever warrant a write-up in any sort of newspaper publication. You don’t need to be embarrassed about your furniture choices or anything else about your house for that matter. The car you drive says much less about you than you think. You can opt out of living a second life on the internet. You don’t have to say “Yes” all the time. You can be anonymous. Not lonely anonymous, but the sort of anonymous where no one outside of your deep, rich, small circle of family and friends really knows anything about you.

Maybe it’s weird for someone with the title “Financial Advisor” to talk about this. But do you know what can happen to the finances—to say nothing of the rest of life—of those who buy into the lie that quiet lives are worthless? Here’s what: They forget that small things done well, with consistency, and over long periods of time are what lead to impact that matters. They seek spectacular outperformance only to open themselves up for spectacular underperformance. They chase others’ expectations for themselves rather than considering what it is that actually makes them tick. They sacrifice time, family, and sanity for a name that won’t be remembered for more than a couple generations anyway.

Okay, before I get any more polemical, here are a few reminders about a quiet financial life for you to consider:

• You don’t need to outperform the market. Ever. By taking what the market gives you for basically free, and by doing so for as long as you can, you will naturally outperform the overwhelming majority of investors who think they need to make bold tactical decisions in order to be successful investors.
• You can live a lifestyle that’s independent of your income. The way social structures often work is we find ourselves doing mostly all the same things as people we think have the same income and wealth that we do. But I want to say two things about that: 1) We generally have no idea what the income and wealth of our neighbors actually is, and more importantly 2) We can opt out of “matching lives.” Maybe it’s strange to do so, but we always have the agency to choose less than what is theoretically possible when it comes to our lifestyle.
• You can say “I don’t know” and find that the world still spins. Dogmatism is cancerous. The humility it takes to say “I don’t know” is not only healing, but also financially advantageous in many cases. Saying “I don’t know” about what the market is going to do tomorrow or next year is simultaneously freeing and helpful in remembering that you can simply take what the market gives you without pretending to know in advance (see the first bullet above). Saying “I don’t know” about a complicated equity compensation structure at your job (or how and when to claim Social Security, etc.) can help you seek guidance and avoid a bad decision. Saying “I don’t know” can make you more curious, and lead you to be a lifelong learner.
• You can define success for yourself. Vocationally, relationally, financially, all of it. If you let other people define success for you or allow external expectations to drive your internal motivations, then don’t be surprised if you feel like you’re constantly playing catch up. 

I’ll be the first to say this is hard for me. It takes a courage I often don’t have to live a quiet, ordinary life. But maybe together we can all give each other permission to be okay with ordinary, knowing that it’s our ordinary, and that it ultimately leads to lives filled with greater joy, peace, and purpose. If we can help you discover and embrace your ordinary, please let us know. That’s what we’re here for.