The Connection Between Zen and Personal Finance


5 min read

I recently finished reading Zen Mind, Beginner’s Mind. It’s a short compilation of talks given by the great Zen master Shunryu Suzuki on zen meditation and practice.

Although the book has absolutely nothing to do with personal finance, I couldn’t help but draw connections between the two fields as I read it.

Here are a few connections I made.

There Are Benefits to Having a Beginner’s Mind

One point that Suzuki often emphasizes in his talks is that there are benefits to having a “beginner’s mind.”

In his own words,

“The practice of Zen mind is beginner’s mind. The innocence of the first inquiry—what am I?—is needed throughout Zen practice. The mind of the beginner is empty, free of the habits of the expert, ready to accept, to doubt, and open to all the possibilities. It is the kind of mind which can see things as they are, which step by step and in a flash can realize the original nature of everything.”

He later goes on to say:

“If your mind is empty, it is always ready for anything; it is open to everything. In the beginner’s mind there are many possibilities; in the expert’s mind there are few.”

When you’re a beginner in any field, your mind is open to receiving new information. By contrast, once you start to consider yourself to be an expert, your mind naturally becomes closed off to new information. It’s easy to think that you already know everything. 

Of course, the drawback to thinking that you’re an expert is that when new information comes along that could potentially increase your knowledge and benefit you, you might be closed off to hearing it.

I recently experienced this phenomenon when I stumbled across a tweetstorm by investor and writer Meb Faber on the importance of investing internationally to increase diversification.

When I initially saw his tweets, I brushed them off because I figured that owning a total U.S. stock market index fund would provide sufficient diversification for my portfolio since most U.S. companies do significant business in international countries. 

However, I decided to open up my mind and revisit Meb’s tweets. I’m glad I did because I learned an important lesson: The U.S. stock market has significantly outperformed international stocks in the most recent decade, which is why U.S. stocks account for over half of the global stock market. However, as Meb notes, the largest stocks/countries/sectors have a tendency to underperform moving forward.

To illustrate, he shares a chart that shows how the S&P 500 performed since the early 1970s relative to how an investment in each of the largest stocks in the S&P 500 at the time would have performed.

Here’s a closer look at that graph:

The total S&P 500 return (with dividends reinvested) during this time frame was 9971.81% compared to just 1027.86% if you had always invested in the largest S&P 500 stock at the time.

After reading these tweets and checking out the charts, I decided to start investing a higher percentage of my money in total international stock index funds, which I believe will be a decision I’m happy I made several decades from now. Although investing in U.S. stocks has been an excellent choice in recent history, it’s highly unlikely that the U.S. will continue to outperform internationally stocks indefinitely.

Because I was willing to adopt a beginner’s mind and admit that I probably didn’t know everything there was to know about investing, I was able to use this new information presented by Meb to my advantage.

Related: I wrote an entire post dissecting Meb’s tweetstorm on international investing here.

You Can’t Force Your Financial Beliefs on Others

Another point that Suzuki makes in several of his talks is that you cannot control others. You can certainly try, but it’s often a waste of time.

In his own words:

“Even though you try to put people under some control, it is impossible. You cannot do it.

 

The best way to control people is to encourage them to be mischievous. Then they will be in control in its wider sense. To give your sheep or cow a large, spacious meadow is the way to control him.

 

So it is with people: first let them do what they want, and watch them. This is the best policy. To ignore them is not good; that is the worst policy. The second worst is trying to control them. The best one is to watch them, just to watch them, without trying to control them.”

This insight – that you cannot control people – is highly applicable to personal finance. In particular, just because you know that spending less than you earn and investing the difference is an excellent financial strategy, it doesn’t mean that you can force people to spend less or be more responsible with their money.

I have experienced this phenomenon several times myself when I have tried to convince my own sister to start reading more personal finance books and to start listening to financial podcasts. Because I was trying to force her to behave a certain way and shoving information in her face that she never asked for, she of course was turned off by it.

It wasn’t until I backed off and stopped trying to convince her of how important money was that she finally came back around and began to ask me questions about saving and investing.

Eventually I realized that the best way to influence other people’s behavior is not to force information down their throat, but rather to be an example. Once people see how much mastering money has changed your life, they’ll eventually approach you on their own and begin to ask you questions because they’ll want to experience those benefits as well.

One of my favorite examples of this relates to minimalism. Two of my favorite writers are Joshua Fields Millburn and Ryan Nicodemus, the duo behind The Minimalists. While they’re both minimalists now, Joshua actually adopted a minimalist lifestyle before Ryan.

Rather than forcing minimalism upon Ryan, Joshua simply embraced the lifestyle himself and it became clear just how happy and less stressed it made him. Eventually, upon seeing how happy Joshua was in everyday life, Ryan sat him down and asked:

“Why are you so damn happy?”

At that point, the door was wide open for Joshua to introduce minimalism to Ryan and the rest is history.

If you actually want to change the financial behavior of your family and friends, just be a living example. Eventually, once the people around you begin to see the benefits you’re experiencing, they’ll approach you. It’s at that point that you can most effectively share your financial beliefs with them and positively influence their lives.

Joy Lies in the Journey, not the Destination

One last point that Suzuki brings up is the idea that many people believe you just have to meditate for a certain amount of time to become enlightened. But in reality, he explains, you can always find enlightenment in meditation simply by sitting upright and letting your mind be fully in the present moment:

“The state of mind that exists when you sit in the right posture is, itself, enlightenment. If you cannot be satisfied with the state of mind you have in zazen, it means your mind is still wandering about. Our body and mind should not be wobbling or wandering about. In this posture there is no need to talk about the right state of mind. You already have it. This is the conclusion of Buddhism.”

Essentially he is saying that enlightenment is always accessible; you don’t have to wait until a certain point to become enlightened.

The parallel to personal finance is that you don’t have to wait until you’re financially independent to be content with your life. You can find real joy in the journey.

My friends Corey and Jessica from The Fioneers have a term for this approach to financial independence called Slow FI. The whole idea is that by taking a slower approach to F.I., often through some variation of part-time or seasonal work, you can find more joy now instead of waiting until you’re completely financially independent to start living your ideal life.

I’ve embraced this approach myself by quitting a day job I hated to pursue my online businesses full-time. This may have delayed my path to financial independence, but I’m much more content on a daily basis and I have much more freedom in my everyday life.

I have chosen to pursue a slow enjoyable journey instead of pursuing a short miserable path to F.I.

For many people, it’s possible to pursue some variation of self-employment or part-time employment and create a situation where they can be much more happy and free now rather than delay that happiness and freedom until some imaginary date in the future.

As Suzuki points out, a simple shift in your mindset is all it takes to realize that real joy can be found in the present.


My favorite free financial tool I’ve been using since 2015 to manage my net worth is Personal Capital. Each month I use their free Investment Checkup tool and Retirement Planner to track my investments and ensure that I’m on the fast track to financial freedom.

My favorite place to find new personal finance articles to read is Collecting Wisdom, a site I created that collects the best personal finance articles floating around the web on a daily basis.


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