There was a time in history when mankind believed the sun revolved around the Earth. Eventually, this notion was scientifically disproven.
This leads me to write about the importance of perspective. Our points of view, beliefs and attitudes are often influenced by where we are anchored. For example, in a certain first world country, the use of face masks during this pandemic is a huge controversy allegedly because many citizens favour their individual rights over collective responsibilities. In other words, the choice is between being self-centered or other-centered.
The same point can be made about financial planning. A consultant I know always begins his sessions by asking the audience who among them wants to be rich, and everyone raises his hand. Instinctively, we aspire to be wealthy, but the really important question to ask is why. Is it clear to us from the outset what our financial goals are for? Or is it more like, “I want to be rich first, and I’ll think about what to do with it later”?
I believe all financial undertakings must be preceded by clear intentions and purposes. We must be properly grounded before acting, particularly on financial matters. Let me illustrate this with a couple of observations from my profession.
First, there are people who tend to value life insurance mainly in terms of earnings or return on investment, which is more indicative of self-interest thinking. Some products do offer living benefits or investment features, but life insurance is essentially for the protection of loved ones against financial distress should certain perils occur, such as untimely death, critical illness, or permanent disability. A person, whose primary motive for getting insured is to secure the welfare of his family, manifests other-centered behavior. The point is, there are different reasons for making a financial purchase, and they show where one is coming from.
Another observation is the actions of sales people that reveal what the center of their universe is. Some are “product pushers”, who are unmindful of whether or not the policies they offer are suitable to a client’s needs because they are more concerned about benefiting themselves. On the other hand, there are others who conscientiously spend time to understand and determine the best financial risk protection and wealth management recommendations to give because they put their clients at the center of their work. It makes a difference who you deal with, doesn’t it?
I favor other-centeredness over self-centeredness, and these are the reasons why. First, I am a product of an education system whose mantra is, “Be a person for others”. Second, I believe in the concept and practice of servant leadership. Third, ego-stroking may lead to an inflated sense of self-importance, which can become a breeding ground for selfishness or corruption. Fourth, being other-centered is a more meaningful life principle and works especially well in navigating financial waters.
Let me explain this further. There is nothing wrong in gratifying ourselves every now and then, but being other-centered actually helps in the more judicious use of financial resources. For instance, I save money and feel good about purchasing a family car instead of a luxury vehicle. High-end brands mean less to me than items with functionality and sufficient quality. My family lives comfortably enough without needing to support a lavish lifestyle or compete with the “higher-ups”. I am able to dine in places that have little or no ambience, but serve very good inexpensive meals. This was most gratifying when I used to travel around the country visiting offices, interacting with the sales force, and enjoying the company of people from all walks of life.
All told, being other-centered enables me to plan and manage expenses more effectively as well as provide economic security for my loved ones. When it comes to life insurance, there is no point of view worthier than the best interests of those you care for.
Societies can do with more people who are genuinely other-centered, who can subordinate personal interests for the greater good, who do not have monumental egos to feed self-serving interests. Purposefully balancing risks and rewards in the financial arena is a good way to show that the world does not revolve around you.*