One of the famous scenes from JR Tolkein’s book series “The Lord of the Rings” is when Frodo the Hobbit is talking with Gandalf the Wizard about his quest to destroy the ring of power.  Frodo remarks that he wishes the ring had not come to him, and that it was not his burden to bear.  To this, Gandalf replies that Frodo’s sentiment is shared by all people who face difficult times.  But the times you live are not for you to decide.  All that we can decide is what to do with the time we are given.

This scene is very metaphoric for the current economic environment that has left many people wishing for better days or complaining about the burdens of a floundering economy.  It is a time where painful changes are being forced on the populace by market realities and government fiat.  However, we as individuals are not give a choice about the times we live in.  The only choice that any of us really have is about what to do with the time that we are living.

As such, it logically follows that we should seek to focus on the parts of our life that we can actually control.  Said another way, we should concentrate our thoughts and actions on our sphere of influence instead of our sphere of awareness or sphere of concern.  This isn’t to say that we should ‘check out’ from the world . . . knowledge of the local, national, and global marketplace is all a part of making decisions within our sphere of influence.  However, most of us would be well served by resigning our self-appointed post as “General Manager of the Universe” and concentrating our efforts on the pieces of our world that we can control.

Part and parcel to this is the understanding that your life is shaped by our decisions.  Both our good decisions and our bad decisions impact the course of our life.  Most of us seek to take credit for all of our decisions that turn out good, and seek somebody to blame when things take a downward turn.  We want to blame the government, big business, the Fed, or just about anybody else we can.  However, the fact still remains that the investments we chose went down in value.  We didn’t know they would go down … otherwise we wouldn’t have bought it.  Before we can make much progress in our lives, we mus take ownership of the decisions that we make.

The hidden wisdom of this change in perspective is that it actually bestows more personal power.  When we are faced up against a big nameless power, we can easily succumb to a feeling of inevitable helplessness.  However, when our focus shifts to the things that we can control, it puts an entirely different spin on the time that we are given in our lives.  We may not be able to control and influence everything, but we can learn to make the most of what we are able to influence and let go of the things that are out of our control.

It is only by learning to look past what is out of our control that we can learn to focus on what is within our control.  The way that we make the most of the time that we are given is by doing the most with what we can control.  In the end, each of us has a supreme choice to make.  That choice is how we choose to spend the time that we are given to live on the earth.  The quality of our time will depend on the decisions and choices that we make.  It is incumbent upon each individual person to choose wisely.

 

There is a famous statement that an optimist will see a glass half that is full, while a pessimist will see a glass that is half empty.  The basis behind these distinctions is that people who possess a more optimistic worldview tend to focus on what is there, what is present, what is available.  Conversely, people who possess a more pessimistic worldview tend to focus on what is missing, what is gone, what cannot be attained.

To many people, the color of reality is closer to the view of the pessimist than the optimist.  After all, life isn’t fair.  The nice guy always seems to finish last.  Vast inequality exists between people and between countries that defy many people’s imagination.  How can somebody possibly be an optimist?  Optimism seems to be the province of a foolish Pollyanna type worldview that fails to comprehend reality.

The Truth of Reality

In order to objectively examine the quality and power of our worldview, it is important to gain an understanding of the true and full nature of reality.  Simply put, reality is what is.  Reality is and only can be what exists, what is here, what is present.  Reality must be something … it must contain a form.  Reality must be defined by substance, it cannot be defined by a vacuous and subjective notion of what is missing.

Understanding this fundamental truth focuses the context of our experience, and allows us to live in the world of what is.  By focusing our attention on what is, instead of allowing ourselves to be distracted by wants and wishes, it creates a much more solid basis upon which to act.  Accepting what is does not mean that we cannot create change … it means that we understand how change works within the context of our present reality.  We must influence our reality in order to change it.

The Power of the Optimist

The power of seeing a half full glass comes from the focus on objective reality that can only spring from what is.  The reason for this is because our only point of influence on reality comes when we change the nature of what is.  This requires us to focus on the things we can influence, and only the things we can influence.  Most people waste their creative power by obsessing on what they feel to be missing, , what they feel to be wrong, or what they feel to be unfair.

The power of the optimist flows from their focus on what is available and what is present.  Most people possess far more power to influence their life than they are able to understand.  Our futures can be definitively shaped by the decisions that we make.  As the quality of these decisions increase, and as the proximity of these decisions converge on the segments of our life that we can influence and change, our control on the future increases.

Possibility Exists Beyond the Reach of Blame

A principal problem in the interactions between most people, companies, and governments is that too much discussion revolves around blame.  A prevalent destructive assumption is that anything which goes wrong must be somebody’s fault.  This creates a fire storm of blame shifting and blame deflecting.  To the person who seeks to influence the course of their future, they must learn to look beyond whose fault the problem is, and focus on what can be done to improve the future.

To the extent that mistakes are or have been made, it is important to learn from them so that they are not repeated.  However, excessively focusing on who is to blame for mistakes all but guarantees a lack of future achievement.  Even when bad things happen to us that we do absolutely nothing to cause, we must understand that our lives exist in a reality of random events that are largely beyond our control.  Railing out against the person who caused our hardship does absolutely nothing to improve our situation.

When understood and applied properly, these principals create a tremendous base of power for us to influence our personal, professional, and financial lives.  Many of our personal relationships encounter difficulties when we blame one another for problems or mistakes.  Many of our workplace problems revolve around assigning blame, shifting blame, and attempting to avoid blame.  Many of the financial problems that people work themselves into evolve from an unwillingness to admit past mistakes and learn.

In the end, each of us possesses the power to influence the course of our personal, professional, and financial future.  Unfortunately, there are startlingly few who choose to use this power.  Too many people allow their pride, politics, and emotions to block the actions and decisions that can shape the course of their future.  Too many people cannot let go of their conceptions about the problems and unfairness of life, and fail to create the changes in their own life and the lives of people about them that can help to bring about the changes they desire.  Each of us must make our own choices, must decide how we will view the glass, and mus take ownership over the future direction of our life.

 

One of the characteristics of humanity that never seems to change is that we are concerned.  Concerned about the economy, concerned about unemployment, concerned about global warming, concerned about global cooling, concerned about foreign wars, concerned that kids are growing up too fast, and concerned that kids aren’t growing up fast enough.  In some cases, people grow so concerned about the state of the world that they require therapy or medication.

The implicit problem with carrying so much concern around with us is the fact that many of the large problems that people spend so much of their lives worrying about are completely out of their control or ability to influence.  The principal reason why so many people expend such effort gathering information and worrying about things beyond their control is because it bestows a sense of self-importance.  In a way, it makes us feel like “Manager of the Universe”.  We imagine this self-appointed post to be that of an informed and concerned person who knows about all of the world’s concerns and is actively thinking about ways to solve them.

The truth is frequently removed from our perceptions by quite a bit.  The only touch point that most people will have with the “big problems” of the world is the infrequent elections where they cast a ballot.  And in the overwhelming majority of cases, the overwhelming majority of the electorate will mark an “R” or a “D” just like they did in the last election, regardless of the world’s surrounding circumstances.  (Please note that this is not attempting to diminish the importance of voting, but rather to highlight the importance of direct personal action, instead of worrying about what is beyond your control)  In most cases, the best remedy for a self-appointed “Manager of the Universe” is to get over yourself.  The world doesn’t change because you’re worried.

Bearing this in mind, it is important to understand that the world DOES change if you take action.  Under this paradigm of thought, the things that we pay attention to derive their importance by the extent to which they enable, inform, or inspire action.  In general, our attention goes to one of three comprehension levels.  Awareness, Concern, or Active Engagement.

Three Levels of Comprehension

• Awareness:

  • This represents things that we know about, but are not able to influence and do not continually worry about.  Most of what people think of in regards to being an informed citizen exists in the realm of awareness.  It is most certainly important to be aware of our community, nation, and world at large but far too many people spend countless hours becoming aware of things that will not influence any direct action.  The most important things to be aware of are those that will influence present and future decisions.

• Concern:

  • This represents the things that are on our mind.  The things that we are thinking or worrying about.  The critical juncture with the thoughts of concern is whether we spend our concern on things that we can act on, or whether we spend all of our time in worry about things that are beyond our ability to influence.  Excessive worry about the world at large produces two unproductive results.  The first is that it occupies time that could otherwise be spend in productive pursuits.  The second is that it creates a feeling of powerlessness since all of these things we worry about are beyond our ability to change.  For optimal productivity (and sanity), focus your concern on the things that you have the power to change.  For most people, this will be decisions about their persona, professional, and financial life.

• Active Engagement:

  • The last and highest level of attention comprehension is active engagement.  This is where you are personally doing something to accomplish your goals or address your concerns.  The reason why it is highlighted so prominently is because all of the improvements in our life (or the world for that matter) stem from a decision to take action.  If you are unsatisfied with your financial position, begin taking action to improve it by reducing expenses and looking for new opportunities to earn and invest.  if you feel sorrow for hungry children, go out and help to feed those hungry children.  In addition to being tremendously more productive that awareness or concern, active engagement helps to create a sense of power and control over your life.  Instead of focusing on what is bad and out of your control, focus on what you can do to make things better for your family and the community at large.

In the end, each of us must fight the urge to declare ourselves “Manager of the Universe” and take action to improve our lives.  When pursuing or consuming information, always ask whether this information will influence or change any future decisions in your personal, professional, or financial life.  Every time that the answer to this question is negative, it pushes life a little further out of your control.  Every time that the answer is yes, it brings life a little further within your ability to influence.  The way that we can change our lives (for real) is by perpetually taking action and learning to make better decisions.  In this way, it is much more important (for both you and the world) to become master of yourself instead of aspiring to be manager of the universe.

 

When life becomes difficult, it can become very easy to believe that we are the victims of circumstance.  It is comforting to blame the economy, or whichever political party happens to be in power.  (Ironically, the political party in power typically blames the people that were in power beforehand as a way to try and absolve themselves of responsibility)

However, as individuals there is only a narrow scope of things that we can really control.  I do not have the ability to directly influence the political system since my one vote is easily dissipated.  Thus, the only area of my life that I can ‘really’ influence is what I choose to do and how I choose to react to my environment.

The importance of this insight lies in the fact that many people do not actively choose how they will act . . . instead, they react to their environment emotionally.  Therefore, in a very real way their environment shapes them instead of them shaping their environment.  Conversely, if we wish to exercise influence over our circumstances it requires that each action be a conscious choice.  James Allen described this phenomenon in his book: “As A Man Thinketh.”

The composition of the human mind is such that the thoughts we hold in our mind will manifest themselves in action by means of influencing our perceptions.  When our minds are fixed on blame and failure, then all that we will see is failure.  This focus on failure will naturally result in actions that take us in the direction of our thoughts.  When we consciously fix our minds on thoughts of improvement and achievement, we will remain open to opportunities.  Once we become open to opportunity, they seem to live everywhere that we look.

In the end, it is our thoughts that determine what we perceive.  This perception influences our actions and slowly molds the composition of our character.  Thus, it is figuratively and literally true that we are who we choose to be.

 

One of the most prescient concepts in economics is the notion that “all changes occur at the margins”.  Expressed another way, this means that when things change, it happens in small incremental movements.  One of the commonly cited axioms of economics is that “rational people think at the margin”.  What this means is that our decisions should be framed in the context of what impacts our next action or decision, and ignore costs that are sunk or decisions that have already been made.

The importance of this concept comes into play when making both personal and financial decisions.  When deciding whether to fix an old car that has broken down, the only factors relevant to the decision should be the facts at hand.  It does not matter how much money you have already spent to fix the car . . . it only matters what you do with the current situation.  (Note that from a financial perspective, it is optimal to repair your existing automobile unless the cost of repairs exceeds the value of your car in reasonable working order.  The decision to get rid of your old car and buy a new one is almost never financial optimal.  This doesn’t mean that you should never get a new car, only that the purchase is a ‘lifestyle’ decision and not a ‘financial’ one.)

The inevitable result of thinking ‘at the margin’ is a narrowing of focus onto the decisions and opportunities at hand instead of dwelling on mistakes and missed opportunities of the past or fantasizing about expected opportunities in the future.  The only time that anybody ever has to act is now.  The past is gone, and the future has not yet come.  Action must always occur in the present tense.  This is not a renouncement of the benefits that come from planning for the future, but a realization that the future is built on many successive decisions, and that each decision we make builds the road for future decisions.

By zeroing-in on the decisions that you can influence today, it will create a remarkable degree of emotional freedom.  This liberation will come when you are no longer shackled by old decisions and no longer nervous about what will come in the future.  The future is and has always been uncertain.  However, people who have grown accustomed to making rational decisions develop the confidence that they can adapt to whatever future situations unfold.  The most important thing is to use the information and resources at hand to make the best decisions possible.  This crystallizes a seemingly infinite number of possible future options into one decision . . . your next one.  The result of that decision will set the stage for future decisions, but so will external events that are beyond your control.

The single area where most people run into trouble is that they under-estimate the extent to which their future will be shaped by things that they do not control.  Thinking about the unknown is inherently frightening, because we cannot plan for something we do not know will happen.  However, the unknown should not be allowed to become a crutch that scares us into inaction, but should also be appropriately heeded so that actions are not taken that greatly depend on a specific future outcome that is far from guaranteed.

The extent to which we can control our lives always is, always has been, and always will be at the margins.  We can influence small iterative changes that compound over time to produce tremendous results.  On balance, it is best if our actions create outcomes that are robust or adaptable to future changes in the marketplace.  While we may not know what these changes will be, we can be confident in our ability to adapt to them.  By shifting our focus to present things that happen ‘at the margin’ it will allow us to enhance our circle of influence by improving the effectiveness of our decision making.