Stoicism & Real Estate – How To Be A Stoic Investor
Stoicism was an ancient philosophy of life that was very popular for hundreds of years in ancient Greece and Rome but its wisdom can still apply to us today. It is my belief that Stoicism can help you and I become better investors while being more fulfilled in the pursuit of our life-long goals.
Make no mistake, Stoicism is not a religion; rather, it was more a form of personal development and moral guidance. Stoicism’s most famous practitioners were engaged in society in roles such as statesmen, writers, teachers, merchants, emperors and even slaves.
Marcus Aurelius the Roman emperor from 161-180 AD was one of the most famous Stoic philosophers. Other famous Stoics include Seneca, a wealthy adviser to the Roman emperor Nero, and Epictetus, a former slave who later became a teacher to the elite of Rome.
Stoicism has very practical ideas that you and I can apply in our own life. Let’s explore a few practices that we can use as real estate investors and entrepreneurs.
The Philosophy = The Art of Living
According to Epictetus, the primary concern of philosophy should be the art of living; just as wood is the medium of the carpenter and bronze is the medium of the sculptor, our life is the medium on which you practice the art of living. Let’s break that down a bit further…
The root of the word philosophy comes from the ancient Greek words “philo” meaning love and “sophia” meaning wisdom. Wisdom in this context was less about abstract knowledge and more about practical knowledge in life. Essentially, philosophers were lovers of knowledge and the art of living.
In today’s world, most of us spend the majority of our time in a career earning money. Many philosophers today also embrace money; however, most of them learn to use money so they can spend their time doing what matters most to them. This is a fundamental concept that I have been teaching for years. The reason I transitioned years ago to a passive investing approach (in regard to real estate) and why I have a passion for educating others on this topic is really quite simple. The ability to create multiple income streams that can pay for lifestyle expenses, provides the ability to free up our time so we can pursue what matters most to us. This, as compared to trading our time in exchange for money in a career or job we may not be passionate about or being caught up in the corporate “rat race”.
“If you don’t find a way to make money while you sleep, you will work until you die” – Warren Buffett
The Foundation of Stoicism
“The chief task in life is simply this: to identify and separate matters so that I can say clearly to myself which are externals not under my control, and which have to do with the choices I actually control.” – Epictetus
The foundation of Stoicism is simply this… some things you can control and some things you cannot. The only things you can control are your thoughts and behaviors in the moment. External events, the opinions of others, the past, and the future are all outside your control. Therefore, focus on what you CAN control.
I recently read the book Man’s Search For Meaning, which highlights the life of Viktor Frankl during World War II. The Nazis in Germany had killed his family and put Frankl in a concentration camp for several years. Out of this most extreme of hardships, he learned one simple truth:
Everything can be taken from a man but one thing: the last of human freedoms – to choose one’s attitude in any given set of circumstances, to choose one’s own way.
While Frankl was not a self-proclaimed Stoic, his ideas echo in the core of Stoic philosophy. Frankl has taught millions of people through his books and lectures that we all have a choice in how we respond to the circumstances of life.
So how do we apply this to our own life? Like any skill, we have to learn it and practice it consistently. Below are a few quotes that I found useful while reading The Daily Stoic, a book written by Ryan Holiday which contains 366 meditations from the ancient Stoics.
“We might not be emperors, but the world is still constantly testing us. It asks: Are you worthy? Can you get past the things that inevitably fall in your way? Will you stand up and show us what you’re made of?” – Marcus Aurelius
Let’s relate this to real estate. Have you ever had a problem renter, an investment that lost money, or a business partnership that went bad? I know I have, and I often get anxious and stressed when these things happen. This is where Stoicism can help.
Since we cannot control the behavior of a tenant, market conditions, or other people’s reactions and opinions; we must consider what we CAN control, which are our own behaviors and reactions. When a challenge or stressful situation arises, try to pause and not immediately react for a few moments. Then, look objectively at the situation and remind yourself that this is only a challenge; not a threat. Ask yourself “what is in my control?”
This simple practice reframes a “problem” from something that threatens into an opportunity to grow. Think of challenges like competing in sports or playing a game. The feeling of a challenge is completely different than a threat. A response to a challenge is much more productive, helpful, and enjoyable.
The Power of Simplicity
“Set aside a certain number of days, during which you shall be content with the scantiest and cheapest fare, with coarse and rough dress, saying to yourself the while: “Is this the condition that I feared?” … Let the pallet be a real one, and the coarse cloak; let the bread be hard and grimy. Endure all this for three or four days at a time, sometimes for more, so that it may be a test of yourself instead of a mere hobby. Then, I assure you, my dear Lucilius, you will leap for joy when filled with a pennyworth of food, and you will understand that a man’s peace of mind does not depend upon Fortune; for, even when angry she grants enough for our needs.” – Seneca
My days in college taught me so much about Stoicism, but I didn’t know it at the time. I was broke during that period of my life, but I refused to take on student loan debt or credit card debt to get through this phase of life. I limited myself to $6 a day for food, I slept on an air mattress for over a year, I drove a $2,000 car that didn’t have air conditioning (in Florida) and I asked for clothes and practical everyday living items as Christmas gifts rather than acquiring the latest gadgets and fads. During this time, I earned approximately $8,000 a year working part-time until I landed my first “real” job after college…which paid $10 an hour.
I am fortunate that I had an opportunity to live this way; I learned how to be happy while desiring very little. What was important were my friends, having a loving and supporting family, and learning so much about life during this time. I’m not sure that school itself taught me very much, but I had my basic human needs covered. I was a happy minimalist.
It’s easy for us to become accustomed to material circumstances; I found this out later in life. But with each move up the comfort ladder, we often become unsatisfied once again and feel that we need “more” to be happy. This is a trap! There were several years where I bought fancy cars, expensive homes, brand name clothing, high-end watches and many other non-essential luxuries. Why did I do this? I suppose for a brief time, I thought that was the American way?
Here is the interesting thing. Taking away some of the comforts and securities that I took for granted, turned out actually making me happier. Cooking food at home rather than eating out, downgrading from a luxury home that I owned to renting a 645 square feet apartment instead. My wife and I even sold our Porsche SUV and exchanged it for an eco-friendly hybrid car. Here’s the thing. Did you know the average individual income worldwide is around $10,000 per year? If you’re reading this post, you already hit the lottery.
Wealth consists not in having great possessions, but in having few wants – Epictetus
The lesson: Your life will not fall apart if you decide to experiment with removing unnecessary items. Practicing simplicity can positively interrupt the consumer programming we are all exposed to in the modern world. As a real estate investor pursuing financial independence, living with simplicity can help you make better decisions about what’s really important in life, and what is not…
For more on this topic, check out my blog post “High Net Worth Frugality – How To Save Like The Wealthy”
Your Life Is Your Masterpiece
“Be true to yourself, help others, make each day your masterpiece.”– John Wooden
The ultimate virtue for Stoics was a Greek word called arete. It’s translated as “excellence” or “virtue.” To me, this is about striving to do your best in each moment. If in this moment you apply these philosophies with excellence, you are living with arete.
How can arete relate to real estate investing and the pursuit of financial independence? Try asking yourself as an investor; how can I play this role with excellence? Am I willing to overcome the challenges that will be placed upon me? How can I make this moment, and the next, part of my masterpiece?
This game of life to become our best is an ongoing pursuit, and that’s a great thing. Striving for arete is a daily mission, moment-by-moment, until we take our last breath.
I hope you found these Stoic practices to be helpful. What is one Stoic principal you can implement in your life, starting today?
To Your Success
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.