Optimism and the Ancient World: What Stoicism Teaches us about Death and Investing
"By reminding ourselves of our mortality we reframe our existence as a true optimist. We can start getting rid of those things that waste our time and don’t end up making us happy, and we can cultivate practices that make us more productive and ultimately more satisfied with our lives."
Phaedo, one of Plato’s best-known dialogues, recounts the death of Socrates. On his death bed, Socrates makes clear to his disciple Cebes the purpose of philosophy: “He who has the spirit of philosophy will be willing to die, but he will not take his own life.”
This idea that the value of philosophy is in reconciling ourselves to our own mortality became fundamental to later stoic thinkers. Seneca, probably the best known of the stoics today, wrote extensively about death and the need for us to practice the premeditation of our own demise.
That this seemingly morbid emphasis on death might lead us to be more optimistic in our lives is certainly counterintuitive. The stoic motto momento mori (literally, remember that you will die) is not something you expect to see posted by young influencers on social media trying to demonstrate a zest for life and abundant positive energy.
On the surface, stoicism seems – if anything – like an antidote to unbridled optimism. If we want to protect ourselves from perpetual disappointment bred of our own naivete, then surely what we need is a solid dose of stoic pessimism. We should teach ourselves to be content with a meagre living, to deal only in small ideas, and to frame our existence within the enormity of space and time. If we can do this, then we won’t make the mistake of taking too many risks or ascribing too much meaning to our lives.
This is the great misconception about stoicism today: that it is fundamentally pessimistic. That the stoics must have been miserable because they were constantly thinking about when and how they would die. Or that stoicism is about repressing your emotions, or isolating yourself from the world, or becoming indifferent to suffering. In fact, stoicism is almost the complete opposite of these things.
By thinking about death, stoics become grateful for the time they have, and they make sure they use it well. Similarly, stoics don’t try to repress their emotions, but rather they study and question them, asking if they are valid or worthy of the person they want to be. They don’t turn their back on the world, but they seek to engage with it as it is, making meaningful but realistic improvements. They don’t dwell on disaster, but, when push comes to shove, they are prepared to sacrifice their happiness (and, in Seneca’s case, even his life) in the pursuit of truth and justice.
While contemplating our own mortality might not sound like the practice of an optimist, it’s the first step to seeing the world in an entirely different light. For those who refuse to countenance death, who would prefer to push it to the distant recesses of their consciousness, life can be lived as if in a kind of suspended animation. We don’t use our time productively because we refuse to recognise its value. We fail to see the opportunities often hiding in plain sight. We spend our time worried about trivial matters, we distract ourselves with the noise of social media, or we search for things that will give us immediate gratification.
“You are scared of dying,” Seneca said. “Tell me, is the kind of life you lead really any different to being dead?”
By reminding ourselves of our mortality we reframe our existence as a true optimist. We can start getting rid of those things that waste our time and don’t end up making us happy, and we can cultivate practices that make us more productive and ultimately more satisfied with our lives.
Death plays a fundamental part in retirement planning. A lot of actuarial work goes into determining when we’re likely to die and how much money we’ll need between retirement and the grave.
To retire comfortably, we must gain exposure to financial markets and take on risk. By doing so, we’re exposing ourselves to potential losses as well as potential gains. Investing for retirement requires a judicious assessment of the risks and rewards. We can’t simply rely on the market to rise without fail. The blind optimist, if he or she is not prepared, could one day face mounting losses when the market turns (and it always does).
“What is quite unlooked for is more crushing in its effect, and unexpectedness adds to the weight of a disaster,” Seneca said.
Anyone who has spent time in the market knows how true this is. We don’t want to fall victim to wishful thinking. But having resolved to dispense of our rose-coloured glasses, how do we avoid falling victim to an arguably worse fate, that of the eternal pessimist? If too much optimism might one day spell our ruin, too much pessimism will mean we take too few risks and end up with less than we need or desire. It will, in effect, ensure the very outcome we were hoping desperately to avoid.
How would a stoic reconcile this problem? A stoic would prepare themselves for what could possibly go wrong, without fixating on things outside their control. This is the practice of premeditatio malorum, the premeditation of evils. Seneca would urge his friends to think carefully about everything that could go wrong in their lives, even to visualise it as vividly as possible. What would we do in these situations? What could we do to avoid them in advance or ensure the very worst is survivable? What are the things we can control and what the things we must simply leave to fate?
“Rehearse them in your mind: exile, torture, war, shipwreck. All the terms of our human lot should be before our eyes,” Seneca said.
Again, this might not seem like the behaviour of an optimist, but in the context of investing it’s something even the most optimistic people do – in fact, it’s the reason they’re so optimistic. Maybe they decide to save more by cutting back on things they don’t need, even when times are good. Maybe they future proof their careers by diversifying their skillset. Maybe they spend more on insurance.
Of course, it’s possible some calamity outside our control might befall us. We can’t be prepared for everything. But we can focus on what we can control and forget about the rest until it happens.
By being prepared, we can afford to take more risks, in life and in the market. We’ll be happy when our investments go up, but we’ll also be able to withstand falls in the market and even sustained losses if things go wrong.
Death and disaster are a part of life – we have to think about them when we’re planning our lives or investing for retirement. But our fear of disaster should not lead us to avoid all risk or obsess about things outside our control. We should face the market and our futures as optimists.
Gordon Toy is a research and content strategy expert with Lonsec.
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