Transcend Your Money Mindset with Financial Stoicism

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In recent times, a sparked revival of interest in the Stoic philosophy from Ancient Greece has occurred. Influencers like Tim Ferris, author of The 4-Hour Workweek and Ryan Holiday, the author of Trust Me, I'm Lying and The Obstacle Is the Way have played a part in making stoicism popular again among followers and entrepreneur types.

As I was listening to a Tim Ferris podcast with guest Jason Fried, creator of Basecamp, it occurred to me that some of the principles of stoicism fit nicely with a healthy mindset on money.

Before we get into my version of “Financial Stoicism”, let's review the Stoicism philosophy in whole.

What is Stoicism?

Stoicism originated as a Hellenistic philosophy, founded in Athens by Zeno of Citium (modern day Cyprus) around 330 BC. Zeno developed his school of stoicism from (amongst others) the ideas of Cynicism, which prioritize virtue, moderation, and simplicity.

Here are some of the principles of stoicism:

  • Seek adversity
  • Embrace virtue
  • Prioritize reason over pleasure
  • Control emotional responses
  • Increase wisdom
  • Understand nature

Seek Adversity

By putting oneself in uncomfortable situations, we learn that the things we fear the most aren't really that scary after all.

A great tool for dealing with worry and anxiety is negative visualization, where you picture the worst case scenario in any given situation and embrace that outcome as a possibility. Then, any outcome better than the worst case scenario becomes a win. Negative visualization allows the user to confront fears about outcomes and take on more risk than he/she/they normally would.

Quote bubble by Seneca - Difficulties strengthen the mind

Embrace Virtue

In stoicism, there are four main types of virtue:

  • wisdom
  • courage
  • justice
  • moderation

Wisdom consists of good sense, good calculation, quick-wittedness, discretion, and resourcefulness.

Courage includes endurance, confidence, high-mindedness, cheerfulness, and industriousness.

Justice entails piety, honesty, equity, and fair dealing.

Moderation means good discipline, seemliness, modesty, and self-control.

Prioritize Reason over Pleasure

Cicero, a Roman politician and philosopher, believed that because humans had been gifted with reason, that the best, most virtuous, and most divine life was one lived according to reason, not according to the search for pleasure.

This did not mean that humans had to shun pleasure, only that it must be enjoyed in moderation.

Control Emotional Responses

Stoicism isn't about being unemotional, but promotes the control of negative emotions and responses. Self control is the goal. The philosophy holds that becoming a clear and unbiased thinker allows one to understand the universal reason. Stoics aim to be free from anger, envy, and jealousy.

Increase Wisdom

Wisdom is arguably the most prized virtue of the Stoics. Wisdom is defined as “knowledge of things good and evil and of what is neither good nor evil…knowledge of what we ought to choose, what we ought to beware of, and what is indifferent” by Diogenes Laërtius’ in Lives of the Eminent Philosophers.

Viktor Frankl said, “Between stimulus and response there is a space. In that space is our power to choose our response.” In that space is wisdom’s opportunity. Recognizing that space is the first step.”

Socrates said Wisdom is good because it is the only human ability that is good in all circumstances.

Understand Nature

One guiding ideal for Stoics is living “in accordance with nature”. Although this has been interpreted to mean a number of things by various critics, its reasonable to assume that Stoic “nature” concerns itself with both universal nature, and the nature of the human condition.

To understand and accept universal nature means we should see the world for what it is, accept how it works, and act in alignment with it, rather than resisting it. 

To understand and embrace human nature means to use our ability to reason and not rely solely on our base instincts and desires. To balance our animal nature with our ability to reason. This balance is what will lead to a happy and virtuous life.

How do we apply the basic tenets of Stoicism to personal finance to create a strong, well-balanced approach and mindset?

Financial Stoicism

Now that I've explained the basic tenets of stoicism, you must be wondering what this has to do with your checkbook.

What exactly is “Financial Stoicism”?

For each tenet of stoicism, there is an reasonable application to personal finance. Its actually kind of brilliant how it all fits together and creates the perfect financial mindset.

Once again, here's our list of principals:

  • Seek adversity
  • Embrace virtue
  • Prioritize reason over pleasure
  • Control emotional responses
  • Increase wisdom
  • Understand nature

I will explain each one within a financial framework.

Seek Adversity

Those who are saving for FIRE or FIAR already understand what it means to seek adversity.

  • Live differently from others.
  • Take measured risks.
  • Pursue entrepreneurial dreams, even if it means failing at first.
  • Seek innovation.
  • Take the road less traveled.

Embrace Virtue

As mentioned earlier in the post, here are the four virtues of Stoicism:

  • wisdom
  • courage
  • justice
  • moderation

Wisdom consists of good sense, good calculation, quick-wittedness, discretion, and resourcefulness. These characteristics can be applied to money habits as easily as they can to other areas of one's life.

Further suggestions on increasing wisdom are covered later in this post.

Courage as it relates to personal finance can include taking measured risks with investments and entrepreneurial risks. Don't be afraid to ask for a pay raise or a promotion. Don't be afraid to switch companies if your current one doesn't value you.

When your focus is not on the accumulation of status symbols, or the indulgence of pleasure, you are more inclined and better positioned to take on risks.

Justice entails being honest with your financial dealings, making ethical decisions, and giving charitable contributions to worthy causes.

Moderation means self-control with spending, being modest with your money, frugality, and avoiding lifestyle creep.

Prioritize Reason over Pleasure

Just because you can afford a thing, doesn't mean you should spend your money on it regularly.

While indulging in expensive restaurants and fine wine isn't necessarily a bad thing, make it a special treat instead of a regular habit.

Before you make a discretionary purchase, wait two weeks to see if you still want it. By making yourself wait, you're exhibiting self-control, delaying pleasure, and preventing yourself from making an impulse buy (see Control Emotional Responses below).

Instead, use reason to change your habits and become more frugal. Minimalism is a great approach to applying this principal to your life. Minimalism is a lifestyle that focuses on owning only things of great value and use to you.

As you begin to focus on owning less, in turn it becomes easy spend less.

Control Emotional Responses

Don't buy things just to satisfy an impulse. Enough with the retail therapy. It doesn't mean you should buy yourself something nice again, but do it in moderation.

Test yourself by telling yourself no, or wait the two weeks and see how much you want it.

Another tactic is to add your items to your online cart, and then walk away instead of completing the transaction. Over time, you should work towards avoiding shopping as a means of therapy.

However, if it suits you, give yourself a small budget with which to make frivolous purchases. Moderation, moderation, moderation. And above all, avoid the type of debt incurred by those who cannot wait.

Increase Wisdom

If you're reading this post, its clear that you're already seeking wisdom on financial topics. Make an effort to continue educating yourself about money, building wealth, investing, and in all topics relevant to your financial situation.

Learn the basic rules of building wealth, as outlined in the Richest Man in Babylon:

  1. Start thy purse to fattening: save money.
  2. Control thy expenditures: don't spend more than you need.
  3. Make thy gold multiply: invest your savings.
  4. Guard thy treasures from loss: avoid risky investments.
  5. Make of thy dwelling a profitable investment: own your home.
  6. Ensure a future income: protect your wealth with insurance.
  7. Improve thy ability to earn: improve your knowledge and job qualifications.

There are a plethora of excellent books, audiobooks, vlogs and blogs to provide you extensive knowledge about every personal finance topic that exists. Some of my favorite sources of financial wisdom include:

  • Tastytrade – free resource that teaches how to trade options and manage risk in the market.
  • Wall Street Journal – the leading business news publication in the US.
  • Books – I only recommend books I've actually read. Here are my top 3:
    • The Richest Man in Babylon by George S. Clayson
    • The Millionaire Next Door by Thomas J. Stanley
    • Live on the Margin by Patrick Schulte & Nick O'Kelly

“The first copper you save is the seed from which your tree of wealth shall grow.”

— The Richest Man in Babylon

Understand Nature

Financial wisdom works in harmony with the laws governing financial math & accounting. Learn the math, how it operates, and how to make it work for you. Basic concepts to master:

  • Compound Interest
  • Time Value of Money
  • Net Worth Calculation
  • Zero Balance Budget
  • Cost of Debt
  • Inflation
  • Investment Portfolio Earnings


Financial stoicism, or the practice of applying stoic principles to your money mindset, establishes a lifestyle that enables you to create wealth.

Seeking entrepreneurial opportunities, embracing financial virtues, prioritizing reason over pleasure, controlling emotional responses, increasing financial wisdom, and understanding the nature of finance are excellent habits to begin building wealth.

Which of these methods are you using today? Let me know in the comments below.

Transcend Your Money Mindset with Financial Stoicism

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