The way we answer certain questions reveals a lot about who we are and the core values we embrace. Consider the following:
- Is it better to be lucky or smart?
- Is it better to be loved or respected?
- Is it more important to have personality or character?
In his book, The 7 Habits of Highly Effective People, Dr. Stephen R. Covey draws an interesting and useful distinction between what he calls the personality ethic and the character ethic of personal success. The personality ethic, Covey says, focuses on superficial principles that “lubricate the processes of human interaction” such as personality, public image, attitudes, etc. It deals “with social image consciousness, techniques and quick fixes—with social bandaids and aspirin that [address] acute problems and sometimes even appear to solve them temporarily, but [leave] the underlying chronic problems untouched to fester and resurface time and again.”
The character ethic, in contrast, focuses on character traits that form the foundation for success—“things like integrity, industry, simplicity, modesty and the Golden Rule.” According to Covey, “The Character Ethic [teaches] that there are basic principles of effective living, and that people can only experience true success and enduring happiness as they learn and integrate these principles into their basic character.” The character ethic recognizes and respects the “law of the harvest” summed up in the words of the Great Lawgiver himself: “As you sow, so shall you reap.”
Covey’s distinction between personality ethic and character ethic has a parallel in the world of personal finance. A quick perusal of the personal finance section at most book stores, shows row after row of books offering superficial personality ethic advice on how to get rich with no risk and no money down. According to these authors, you can have it all and for the twenty-dollar price of the book they will reveal the secrets that rich dads teach their sons that poor dads obviously know nothing about.
Character ethic financial advice is quite different. It isn't sexy and it probably wouldn't sell a lot of books. It encompasses such tried and true ideas as:
- Live within your means.
- Save for a rainy day.
- Invest, don't speculate.
- Think long term.
- Pay off your debts; honor your obligations.
- Get an education and keep it current.
I doubt that you saw anything new on that list. You might have even thought my ideas are kind of old-fashioned (though I prefer the term "time-honored.") Nevertheless, these are very powerful ideas and if you follow them consistently, you will prosper.
On a personal note, I freely admit that I am a character ethic kind of guy.
- My car is ten years old and has close to 250,000 miles on it.
- My wife and I save faithfully for retirement.
- Our only debt is a modest mortgage.
- We don't take fancy vacations.
- We don't splurge on expensive restaurants.
How about you? Do you believe in character ethicprinciples? If so, do you follow them in your financial life? If you answer yes, I encourage you to visit this website frequently for thoughts on how to maintain your character ethic focus. To those who still believe they can prosper by pursuing personality ethic financial principles, no worries. We'll still be here when you finally come around.