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Maslow's Hierarchy of Needs

September 22, 2021

Are you living your life to its highest and fullest potential?

Of course, the answer is 'no' for almost everyone, because we could probably all do a little better. Given that no one is perfect, what's stopping us from asking ourselves what we could do to be *more* perfect. Could you be a better parent, spouse, coworker, etc.? Have you given up on the dreams you once had as a child? Why? Life just got too busy would be my guess. 

People ask me what I love about my career, and for the first few years I had a canned answer that sounded genuine, "I get to help people save for retirement and achieve financial security." It was true, after all, that's part of what I did, but it didn't encompass the scope of what we now try to accomplish at our firm. Now when people ask me what I do I have a genuine answer which sounds canned, "My team and I help you become the best possible version of yourself."

And that is 100% correct. That's exactly what we do.

It's a tough sell at first, but most companies that are worth their salt are selling the same thing - a better version of yourself. It might be clothes that make you feel more important, or even a Coca-Cola. Do you remember that commercial on the hilltop from the 1980s? "I'd like to teach the world to sing in perfect harmony. I'd like to buy the world a Coke, and keep it company." Lofty ambitions for sugar water.

In order to understand the science behind our work, we're going to need to dig up a little 20th century psychology, whose architect was none other than the great Abraham Maslow. Perhaps you've heard of Maslow's Hierarchy of Needs? If not, it's certainly worth a Google. Maslow asserted that we all have basic needs: safety of body, security of resources, desire for love/belonging, esteem, and lastly, self-actualization. (You can think of this as enlightenment on some level.) Maslow believed that we solved our problems in that exact order, and that we couldn't reach the next plane of existence until we'd transcended our lower level needs.

His great insight was that the human mind prioritizes what problems are worth solving, and which circumstances require our immediate attention. Can't breath? You probably ought to solve that problem within the next few seconds. Have to go to the bathroom? You'll need to figure that one out in a few minutes. Spouse not listening to you? You might want to take it slow for that one. 

You can stress yourself out over the next political election all you want - but not while you're on a treadmill. Your brain just won't think about such things when it's yearning for oxygen. You can't solve a math problem on a treadmill - not enough air. You can't solve a math problem in a cold shower - not the correct body temperature. You can't solve a math problem when you haven't slept - not enough rest. You can't even be nice to people if you haven't eaten.

It's when you don't have basic problems that you turn to your Facebook feed and start posting about politics. 

"When your stomach is empty - only one problem. When your stomach is full - 100 problems." - Sadhguru

Evolution has been working for millions of years to come up with the perfect formula for how to succeed as a human. For 99% of that time we humans didn't have basic staples of everyday modern life such as artificial light, let alone computers or the internet. Understanding the circuitry of the human brain often involves transmigrating to a simpler world when we lived in caves.

Let's use our imagination and take a metaphorical trolley ride to 'The Land Before Time', substituting your Starbucks latte and subsequent morning commute with a dangerous existence in a world full of woolly mammoths and saber-tooth tigers.

If you want to survive as a cavewoman the very first thing you're going to need is protection from the elements. One cold night could see your toes lost to frostbite, or infection after stepping on a thorn. Of course, you could freeze to death altogether. A cavewoman wandering through the wilderness will quickly need to find shelter from the cold, and protection from wild animals. 

You want a cave. And the frenzied search for such is consuming your thoughts.

Imagine then, that you're a cavewoman who spent all day looking for a cave and evading bears. Let's suppose that you find a cave, gather some dry brush, and are lucky enough to start a fire to keep you warm. Tonight as you lay your head down on a rock you may have a sense of accomplishment - you have fulfilled your PHYSICAL needs. Your physical body is safe and not in immediate danger of death. You're going to live through the night.

As you drift off to sleep you may notice that you're feeling hungry. A new problem has entered your thoughts and you realize that tomorrow when you awake you're going to need to find food and water. You're pondering your RESOURCE needs - the security of your personal supply chain.

The next morning you gather enough nuts, mushrooms, berries, and grass to make a meal out of it. There's some stagnant pondwater nearby you sip to wash it down. It's not fancy and for some reason your stomach aches, but you're alive.  A new season may bring challenges, and the quality of your life isn't terrific - you have to spend all day every day gathering food - but with your resources secure there's no reason you can't survive for months.

After a few days of chewing on grass and leaves you notice a tribe of humans nearby. They look plump, energetic, hydrated and happy. Wouldn't it be nice if they let you sleep in their tents with them, shared their fresh meat from a recent kill, and offered you some fur to use for clothing to protect your skin and help keep you warm? Ah, society.

Now of course, it's possible that you could kill a wild animal on your own. You've been sharpening a thin rock when the sun goes down which would be quite useful in skinning and preparing meat, and you could cook it on your fire. However, the animals are big, quick, and just as likely to be hunting you as you are them. They're too fast and alert to chase down with a 'knife', and throwing it at them will get you killed.

Last week, you watched the human tribe circle a large animal, trap it, and kill it from afar by shooting it from distance with a bow and arrow. Wouldn't it be nice if you could strike a deal with the tribe whereby you skinned and cooked the animal for them while they rested, and they let you eat some of it? Then everyone would get to eat meat, and no one hunter would have to perform all of the complex tasks themselves. 

You're thinking about your LOVE/BELONGING needs. If you want to eat well in cavewoman times you need people to like you and think you're a valuable member of the tribe. If you're loved, you're fat and happy. If you're loathed, you're starving and alone. Life is better when you belong to a tribe, and survival is unlikely if you don't. Millenia of natural selection have programmed you to fear being an outcast. That's why we all want to fit in.

Fast forward a few weeks, and you've been able to catch the eye of a male member of the tribe. You give him some berries and let him hang out in your cave by the fire every afternoon when it rains. In turn, he brings you some meat and eventually takes you back home to meet his parents. It isn't long before you're an accepted member of the tribe. Some days you eat until you can't eat any more. You get to talk about your problems, cuddle at night, and sing songs while dancing at the first signs of spring. You have a few cave babies, and life is good. You've solved your LOVE/BELONGING needs. You are likely to live many years, and not only this, the chances of your lineage carrying on drastically improve with every newborn baby. You've been so successful that not only can you support yourself, you can support children as well. Bravo!

But eventually new thoughts start to creep into your mind. From time to time there isn't enough to eat, and you've noticed that when resources are scarce, the elder women in the tribe eat first, so that sometimes you don't eat at all. I mean, most of the time things go fairly well, but you wonder why they always eat first, and you always eat last? Why their kids eat better cuts of meat, and yours often end up chewing on fat. Maybe it's because their 'husbands' are bigger and stronger than yours, but that's not it entirely. Some members of the tribe have something you don't have - respect and status. 

Everyone likes you, to be sure, but maybe they like you because you're pretty. You want them to like you, instead, because you're funny. Or maybe they already like you because you're funny, but you want them to like you because you're smart and have good ideas. You want them to listen to you. You desire influence.

Much has changed from the days when you were sleeping alone in a cave fending off bears. Now that you've solved your PHYSICAL needs, your RESOURCE needs, and your LOVE/BELONGING needs, you become increasingly aware of your ESTEEM needs. You want to hold a higher position in the hierarchy of tribal society.

It's not just vanity - when you have status your family eats better, and your tent is closer to the center of the village where it's better shielded from bears. Your kids have a better chance at survival if you're important.

So years go by and you play the game. In fact, you play it quite well. You share food with the right people, sing songs at night, and perform heroic acts of selflessness. You become a leader among your people. You eat first, fight last, and live best. Congratulations! You've solved your ESTEEM needs. 

It's at this point that you finally have time to look up at the stars. You're getting older and you've seen many members of your tribe meet their demise - some to sickness, others to injury. You miss them and start to become more aware that, like the elder women before you, you are going to die one day.

You wonder whether or not anyone will miss you when you're gone, so you decide to start chronicling the story of your life by drawing paintings in animal blood on the cave walls. They narrate the success of your people under your leadership. Perhaps you build monuments out of stone, or pyramids reaching into the sky which will weather the sands of time. 

You're asking yourself, "Am I living my life to its highest and fullest potential?" 

We are each a complicated interplay with our environment. The molecules which constitute your body were once the constituents of other plants and animals (which you consumed), and long before that they were formed deep inside of distant stars. (Nearly every element in the universe which isn't hydrogen or helium was formed this way.) 

As you contemplate your existence, you begin to think about the survival of your 'halo'. (This is my terminology.) It's the imprint you leave on your environment after your physical body has perished. 

The great 20th century psychologist Abraham Maslow called this self-actualization - the concept of living your life as your best self. 

Thousands of years of natural selection have brought about this manner of thinking, categorizing, and prioritizing. Cavewomen that worried about their hair in the vicinity of a hungry lion got eaten. Cavewomen that worried about their hair once they'd killed a lion, cooked it, and shared the leftovers with their friends were more successful. 

The takeaways are these: (1) human minds think about their problems in a certain order, and (2) they can't think about higher level problems until they've solved for their basic needs.

So what does all of this have to do with finance?

In modern society, if you've got money you can eat well and sleep on a comfortable bed. Money is the key to solving your RESOURCE needs, which is the second to lowest level on Maslow's Hierarchy of Needs. If you can work with a team that solves your money problems, you free up an enormous amount of mental capacity, and that time and energy can then be spent on the things that truly matter to you in life - fostering relationships with your loved ones, bettering yourself so that you're proud of the person you've become, and personal crusades to make the world a better place.

If you're poor, you're not going to be thinking about any of this - you're going to be thinking about how to make money. (Sadly, what's worse is that if you're sick you won't even have the ability to think about money.)

Our team works with High Achievers. Most of them are smart and could handle their own finances if they had enough time and energy. But those are the two things they DON'T have and would prefer to spend elsewhere (their families, their career, and their ambitions). By working with our team they unlock more of the potential within themselves by freeing up their mind to focus on the endeavors which bring them more fulfillment in life.

It's true that we manage client portfolios, buy stocks/bonds, formulate strategies for tax efficiency, audit your estate planning, model your retirement cash flows and blah, blah, blah.

The spirit of what we're trying to accomplish is very simple - we specialize in solving your financial problems quickly, so that you have more time and energy to focus on being a better doctor, pilot, engineer, husband, mother, etc. We help you manage your RESOURCE needs, so that you can spend your time thinking about the things that truly matter to you in life - your friends, your family, yourself, and living your life to its fullest potential.

It's common in financial advising to talk about your GOALS. People want to talk about their goals because it gives them energy and gets them excited. I think this is misguided. If your goals are centered around money you haven't moved very far up on Maslow's Hierarchy.

You don't have a goal for how many heartbeats you're going to have today. Nor how many breaths you're going to take. Those needs are too important to be relegated to 'goals'. Instead, your body has SYSTEMS to regulate your heartbeat, monitor your internal body temperature, and breath while you sleep. You wouldn't live very long if you had to think about every heartbeat. 

Spending your time thinking about money is like concentrating on your breathing - it can be useful under special circumstances, but when done well it's done automatically.

My team and I install systems to help you manage your finances. Our clients meet with us routinely to brainstorm new ideas and identify challenges/opportunities. You see your dentist every 3-6 months, and in so doing you minimize the amount of time you have to spend thinking about your dental health. Even if you have a cavity it can't be that big because it didn't exist the last time you saw your dentist, which wasn't very long ago.

Similarly, our clients use our team to help minimize worries because our systematic relationship identifies small problems before they have the opportunity to become big problems. This frees up their mental energy and allows them to set and pursue goals higher up Maslow's Hierarchy.

That's the science of how we help you live a better life.

There was a real Wizard in Oz. He wasn't what Dorothy was expecting when Toto pulled back the curtain. The magic was in the machinery ... and it got her back to Kansas all the same.

Our mission is to help you be the best version of yourself that you can possibly be.

Your time on this earth will be very short. What will you leave painted on your cave walls when you're gone?

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.