Chapter 10
Personal Wealth Algorithm
Chapter 1 started with a simple question: What is wealth?
To answer this question, we engaged first principles thinking, which is a critical thinking model that requires the breaking down of a concept, idea, or problem into its most fundamental parts. With our critical thinking hat on, we turned to the etymology of wealth, to understand the definitional roots of the word, the genesis of the word. From there, we boiled down the concept of wealth into its most fundamental parts, so we could reason and build up from there. To do so, we looked at the fundamentally familiar aspects of wealth, through a refreshed lens, that is, the 5 Principles of Invisible Wealth. These five principles embody the multifaceted definition of wealth, which is both evergreen and ever‐evolving. These principles, plus your individual values, are the key considerations to answering the more specific question: What's your wealth?
This chapter introduces, and practically applies, the personal wealth algorithm. This algorithm, or set of instructions, is a framework for redefining wealth, so it fits snuggly with your values and goals.
“Philosophical sophistication, it's very useful because it orients you properly.”
—Jordan Peterson
The Relationship Between Principles, Values, and Wealth
Within the context of wealth, the relationship between principles and values answer the question: What's your wealth? With this in mind, let's define both principles and values.
Principles are collective, objective truths that are unchanging and permanent, whereas values are individual, subjective truths that are changeable and malleable.1 Principles transcend the individual, whereas values are specific to the individual. Principles are nondebatable, whereas values are debatable. That said, the 5 Principles of Invisible Wealth remain objective and unchanging, whereas your values relating to wealth are subjective, or changeable. Principles act as the envelopes that hold (or house) your individual values. More on this later.
What you value today may be different than what you valued 2, 5, or 10 years ago, because of the subjective and changeable nature of values. And what you value today may be different than what you value 2, 5, or 10 years into the future. This is normal, particularly nowadays, given the velocity of change underway. As we well know, the genie is out of the bottle; therefore, knowing what you value, what you want, and what you wish for is a timely quest. This quest involves self‐inquiry to thoughtfully craft a concept of wealth that fits snuggly with your values and wealth goals.
Through thousands of client conversations, I learned that wealth is personal. Further, wealth is relative, relative to the individual. I had clients who were holders of immense wealth who felt they had to live frugally. For example, one client had a net worth of over $40 million, but was skittish about leaving his job for fear of financial insecurity. Not only was he the holder of immense wealth, but also immense knowledge, status, and influence, with many money‐making years ahead of him. I also saw the reverse: those who had way less financial means, yet spent beyond their means, ultimately placing them on track for financial disaster (if their spending habits weren't modified). It's all very fascinating, the way each person values and prioritizes differently. And this is exactly why reimaging and redefining wealth requires a personalized approach.
Collective Principles
Principles are collective, objective truths that are unchanging and permanent. Despite the collective, unchanging nature of principles, they can be viewed through a personalized lens. Here's an analogy to materialize this intangible concept into a tangible concept: assume you have a home with five rooms: a living room, a kitchen, a dining room, a bedroom, and a bathroom. These five rooms are unchanging and permanent, although the way you decide to furnish the rooms may change from time to time. The rooms represent principles, whereas the furniture represents values. The principles “house” your values. This backdrop provides a good opportunity to recap of the 5 Principles of Invisible Wealth, highlighting the personalization potential of each.
P1: Wealth of Money and Investment
When it comes to money and investment, it's always personal. The way you make, spend, save, and invest depends on your specific interests and goals. You make money differently than I make money, based on your interests, skills, and what the market will reward you for. How you decide to wield your productivity superpowers is specific to you. And what you spend your money on is also specific to you. As the saying goes, “Show me your receipts, and I'll show you what you value.” Whether you're an entrepreneur or a corporate employee, the size of your cash cushion depends on your risk tolerance and financial goals. And finally, how you invest your additional monies is personal, too.
Working, generating income in excess of your expenses, affords you the ability to save and invest money. Investing today looks a lot different than it did in times past, particularly pre‐internet and pre‐online brokers. The empowerment of the individual is seen through the rise of the retail investor, taking investment into their own hands. More people are exploring wealth creation through the treasure trove of information and resources available, taking the reins over their financial future. The more people that take charge of their financial health, the better (for self and society). And while money and investment is largely a personal affair, there is no denying that society stands to benefit too. It is in the individual account owner's interest and society's interest to invest and grow money, because once the account owner acquires enough wealth for themselves, they are then more inclined to then share their wealth with others, whether it be with loved ones or loved causes—charity and philanthropy.
P2: Wealth of Health and Quality of Life
It doesn't get more personal than health, and quality of life, that's for sure! The saying “health is wealth” finds it's truth both in an etymological sense and a practical sense. From an etymological perspective, wealth was born from root words relating to health and well‐being. From a practical perspective, health is foundational to both creating and enjoying wealth. The ways in which we manage our health today, looks different from times past, especially because technology is providing visibility into the invisible. Technology is providing visibility into the invisible markers of health like blood oxygen levels, heart rate levels, and REM sleep metrics. This information is captured thanks to wearables (ex: Oura ring). Further, we can now “see” doctors and specialists without really seeing them, through telehealth options. The digitization of healthcare provides X‐ray vision into our health and habits, further personalizing the personal.
Visibility into your health data is a consequential, technological advancement, because it allows you to optimize your health and quality of life from an informed place. These quantitative insights have the potential to inform and support meaningful, qualitative changes—all of which are highly personal to you. Additionally, society is now embracing the totality of health to include wellness of mind, body, and spirit. We are valuing and prioritizing a more expansive concept of health, which includes intangible, invisible, health. Mental and spiritual strength is a powerful force. Your intuition will lead the way, in revealing how to best fortify and strengthen mind, body, and spirit.
P3: Wealth of Knowledge, Status, and Influence
There's not a single person on this planet who carries the same mosaic of knowledge as you do, or the same status and influence for that matter. Your logical and emotional mind determines what information is most valuable to you, at a given point in time. As you blend this information with your experiences and intuition, you become the bearer of new knowledge; knowledge you can share with others. You can share this knowledge for economic gain, through employment by self or others. The more specialized knowledge you acquire, the more money you can make by putting this knowledge to good use. From here, gaining social status is often a byproduct of providing value to your society, community, and peers.
The thing about status is it's relative to your society, community, and peers. What value do you provide to others? What associations, affiliations or memberships do you align with? These are all key contributors to status. Plus, elevated finances typically equate to elevated status, because you can pay your way into social circles. Further, influence is often a byproduct of your knowledge and status. Influence is also highly unique to you. How you influence others, and for what purposes, is based on your objectives and goals (for self and for others). And this is best achieved, when done—authentically and with good intention.
P4: Wealth of Time, Energy, and Experience
Time is your most valuable asset, despite never knowing how much you have. Therefore, the more authority you have over how you spend your time, the better. And only you can decide the best ways to do so. It might be helpful to calculate your monetary value of time, to provide a quantitative, analytical point of reference to shape your relationship with time. Understanding the value of your time, whether from a quantitative or qualitative perspective, impacts what you give your energy to and the experiences you seek.
With a grand premium placed on the value of time, it makes sense that you'd want to optimize it. Many technological advancements aim at saving time and energy, and when used with intention and discipline—they are absolute gems. The time and energy saved, thanks to technology, intention, and discipline, can be used for pursuing extraordinary experiences. Consider, what makes you feel alive, what stretches you, what makes you feel the vitality of being? This is highly personal. Fortunately, there are many options in the marketplace to find full expression of self through experiences. All this said, it's also up to you to find magic in the mundane moments of life, to fully appreciate the richness and totality of life. The only person who has control over this perspective is you.
P5: Wealth of Relationships with Self and Others
The most intimate relationship you'll ever have is with yourself, which is why the Greek maxim “know thyself ” remains with us since antiquity. Self‐inquiry is a portal into self‐knowing, where you are both asking and answering the questions; playing both the white chess pieces and the black chess pieces. The importance of self‐knowing and self‐awareness is supremely valuable when you consider that your beliefs, thoughts, emotions, decisions, and actions all color the relationships and interactions with others. Additionally, relationships with others are also a portal into self‐knowing, because there's an inherent feedback loop by way of conversation.
Taking this one step further, you get to decide who you want to surround yourself with—the quality of the company you keep. Seneca's timeless advice of “Associate with people who are likely to improve you” is especially noteworthy today, because technological advancements grant us the ability to connect with people based on relevancy over proximity. You can find people who are likely to improve you, regardless of whether (or not) they are living in your community. This is so powerful. While you may be faced with the paradox of choice, in friendly and romantic relationships, your relationship with self, your intuition, and your values and goals help lead the way in determining which relationships to invest in. Individuation of self may act as an elegant filter for who and what you associate with.
Individual Values
The 5 Principles of Invisible Wealth are fundamentally familiar but deserve revisiting in light of the technological advancements and societal shifts currently underway. We just recapped the personalization potential of each principle, despite principles being collective, objective truths. As a follow‐on, let's consider the individualistic nature of values.
Values are individual, subjective truths that are changeable and malleable.2 Values are specific to the individual. Principles act as the envelopes that hold (or house) your individual values. Let's revisit the analogy of the home with five rooms. What you value, will furnish each of these rooms. Perhaps you value aesthetics over functionality, so your living room includes a beautiful couch that doesn't provide much function. The rooms represent principles, whereas the furniture represents values.
Understanding your personal values is important because your values influence your thoughts, behaviors, and decisions. Every day, you make about 35,000 remotely conscious decisions.3 Every day, you're inundated with information, and options—constantly facing the paradox of choice. Your values act as the filters for your decisions, which helps to speed up your decision‐making process and to keep your actions aligned with your values. This supports your ability to live an authentic, values‐based, life. Here's a practical and metaphorical example. It is much more efficient to go to the grocery store with a list of what you want (what you value, at that point in time), versus going to the grocery store not knowing what you want. Without a list, without an understanding of what you want, you may end up walking around the grocery store aimlessly, wasting valuable time and energy. The same logic applies to walking through life. That said, it's powerful to know and understand what your values are.
Collective and Individualistic Culture
“As parents are to children, cultures are to adults.”
—Jordan Peterson
With a solid understanding of collective principles and individual values, it seems fitting that we touch on collective and individualistic cultures, especially because culture can influence individual values. In the United States, we live in an individualist culture—a culture that prioritizes the individual ahead of the collective. Individualistic cultures celebrate personal achievements, success, and innovation.
The topic of the individual versus the collective was front and center during the height of the pandemic. There was much discussion as to how the (values) behavior of one, could impact the health of many. To slow the spread of the virus, the World Health Organization advised us to wear masks, to maintain social distancing, and to avoid large crowds. Different regions, countries, states, and even cities adopted this advice to varying degrees. Some cultures were highly compliant, whereas other cultures were not. Individuals in collective cultures were highly compliant (e.g., China), whereas individuals in individualistic cultures were not (e.g., Sweden). In the United States, we experienced a fractured approach to compliance/noncompliance, because of the different subcultures within the country. Case in point: New York City's compliance was strict, whereas Miami's compliance was lax. But generally speaking, Americans were voicing their concern for the preservation of individual freedom and personal liberties.4 Individualistic cultures prioritize values such as independence, freedom, self‐expression, and self‐definition.5 The United States was founded on these core values.
Here are some quantitative insights to round out these qualitative statements. Dutch professor and researcher Professor Gert Jan Hofstede developed a cultural index that measures the individuality of each country's culture.6 The more individualistic a culture, the more likely an individual will take care of themselves, instead of relying on the collective for support. Hofstede's findings reveal the following index numbers for the following countries; the higher the number, the more individualistic the country: United States (91), Sweden (71), China (20), and our North American neighbors, Canada (80) and Mexico (30).7,8
The concept of an individualistic culture versus a collective culture is dynamic, especially when you value attributes of both. I was born in Mexico (30), and spent formative years in Canada (80), and was raised in a household of Europeans (generally, much less individualistic than the United States). Years ago, my disposition swayed toward a collective orientation, rather than an individualistic orientation, so much so that there were times at the beginning of my career when I was coached to talk about myself more. This felt a bit taboo to me, based on the ideals that surrounded me growing up. That said, I became more comfortable and in fact, appreciative, of the individualistic orientation of individualistic culture. My values changed with time. And perhaps they were/are influenced by culture. I mention this as an example of how culture can impact our individual values, which is why spending the time and energy to “know thyself” is so important—to parse out your values from those around you.
Personal Wealth Algorithm
“I know of no more encouraging fact than the unquestionable ability of man to elevate his life by conscious endeavor.”
—Henry David Thoreau
By now, we're quite familiar with the idea that you're wealthy when you have an abundance of what you value, and that wealth is a derivative of value(s). Therefore, the concept of wealth is subjective because individual values are subjective. The question then becomes: What are your values? This section is where the relationship between principles, values, and wealth really comes to life. It's also the section where you can roll up your sleeves and answer—What's your wealth?
The personal wealth algorithm provides a set of instructions to help you identify your wealth (goal). By definition, an algorithm provides a set of instructions, or orders of operation, to solve an algebraic expression/equation. In other words, algorithms are a series of steps to arrive at a solution. When you think back to algebra class, consider the order of operations you used to arrange and prioritize the values, variables, and functions, all for purposes of solving the algebraic expression at hand. Similarly, here are the set of instructions (order of operations) for defining your wealth:
- Identify your top 10 values.
- Allocate your top 10 values, among the 5 Principles of Invisible Wealth.
- Identify which principle holds the most values (value).
As you can see, we're using principles and values to identify goals.
Practical Application
The antiquated wealth paradigm, or narrative, relates solely to Wealth of Money and Investment (P1), whereas the new wealth paradigm relates to all 5 Principles of Invisible Wealth. Our personal values highlight which of these principles is most important to us at a given point in time—informing how we should orient ourselves to attain a fulfilling life. The personal wealth algorithm is a framework for synthesizing and organizing your reality.
Let's roll up our sleeves, and practically apply this algorithm to answer: What's my wealth? This is where things get fun.
First
First things, first: Identify your top 10 values.
It’s daunting looking up to the sky or staring down at a sheet of paper, thinking What are my values? It's difficult to distill abstraction into a few words. For this reason, as a starting point, a quick Google search will return plenty of values for consideration. James Clear, author of Atomic Habits, has a great core values list.9 On Clear's website, he lists the following 57 core values. Before reading through this list, I want to stress one thing: this is not an exhaustive list of values. Please do not limit yourself to a limited list. That said, there are 9 additional, blank boxes for you to expand this list, should you choose.
| Authenticity | Achievement | Adventure |
|---|---|---|
| Authority | Autonomy | Balance |
| Beauty | Boldness | Compassion |
| Challenge | Citizenship | Community |
| Competency | Contribution | Creativity |
| Curiosity | Determination | Fairness |
| Faith | Fame | Friendships |
| Fun | Growth | Happiness |
| Honesty | Humor | Influence |
| Inner harmony | Justice | Kindness |
| Knowledge | Leadership | Learning |
| Love | Loyalty | Meaningful work |
| Openness | Optimism | Peace |
| Pleasure | Poise | Popularity |
| Recognition | Religion | Reputation |
| Respect | Responsibility | Security |
| Self‐respect | Service | Spirituality |
| Stability | Success | Status |
| Trustworthiness | Wealth | Wisdom |
From the wide universe of personal values, choose the 10 that resonate with you the most—the values with the highest vibrancy and priority. These are intuitive decisions, rather than intellectual ones. Which values are authentic to you, not the people around you or the values your culture holds high. Consider the infinite universe of personal values, without limitation and without consideration for external influences. Which inspire you, excite you, and make you feel alive? This is a self‐discovery exercise to “know thyself.” These values become the components of your personal philosophy.
Second
Second, allocate your top 10 values, among the 5 Principles of Invisible Wealth.
In other words, after selecting 10 values, refer back to the 5 Principles of Invisible Wealth and fold (or house) each of your values into one principle. For example, my current values are: authenticity, achievement, autonomy, creativity, growth, knowledge, love, loyalty, meaningful work, and security. Next, I'll fold these 10 values into the principle envelopes:
- P1: Wealth of Money and Investment
- Achievement
- Creativity
- Growth
- Meaningful work
- Security
- P2: Wealth of Health and Quality of Life
- Authenticity
- Autonomy
- P3: Wealth of Knowledge, Status, and Influence
- Knowledge
- P4: Wealth of Time, Energy, and Experiences
- P5: Wealth of Relationships with Self and Others
- Love
- Loyalty
The categorization of these values, within the principle envelopes, is quite subjective. For example, someone else with the same values might place security under P5 or growth under P4. This highlights the fact that our values are subjective, both in selection and application. Further, while the 5 Principles of Invisible Wealth are collective, objective truths, there is still potential to personalize or customize the interpretation of each (as we saw at the beginning of this chapter).
Third
Third, identify which principle holds the most values (value).
Undoubtedly, we see most of my values fold into the P1 envelope, Wealth of Money and Investment. Therefore, I'm currently “solving for” P1. In other words, I'm giving primacy to P1. Now I understand which facet is in focus, within the multifaceted concept of wealth. This algorithm also reveals which aspect(s) of wealth take secondary priority, and so on. That said, you might discover that your wealth goals change if you use this algorithm in 2, 5, or 10 years from now.
Wealth Goals Change, Too
Things change. The etymology of words, the evolution of money, economies, technological advancements, societies—and wealth goals change, too.
We established that values are individual, subjective truths that are changeable and malleable. Life changes, and so do our goals; this includes our wealth goals. While each of the 5 Principles of Invisible Wealth is unchanging and static, one principle will always have priority over the others. Let's consider a relatable example, to really crystallize the idea that values and priorities change.
Hop in a time machine, back to the year 2020, when everyone was experiencing the global pandemic. At this point in time, what aspect of wealth did you value the most? Let's consider the options, the 5 Principles of Invisible Wealth:
- P1: Wealth of Money and Investment
- P2: Wealth of Health and Quality of Life
- P3: Wealth of Knowledge, Status, and Influence
- P4: Wealth of Time, Energy and Experiences
- P5: Wealth of Relationships with Self and Others
Presumably, most of us valued our health, so we focused on Wealth of Health and Quality of Life (P2). During this time, nearly everything we did was to solve for the preservation and optimization of health. For those fortunate enough, work moved home via Zoom. We spent money on an array of vitamins and wearables to measure blood oxygen levels. We were calling our highly valued doctors for guidance. All the information we took in related to the virus; the more knowledge we had, the better. Time and energy was spent managing stress, perhaps through online meditation or through a newly purchased Peloton. And all conversations with friends and family moved from the dinner table to digital text or talk—experiences included. During this time, supreme priority was placed on P2, so much so that the goal of maintaining and fortifying health influenced all behaviors. This is not to say that health is not typically important or prioritized, but during the pandemic, it took primacy.
Now let's consider how your values may have impacted your approach to solving for Wealth of Health (P2). Using the archetypal values of an individualistic culture, perhaps freedom of choice was the value underpinning your decisions during the pandemic. Health took primacy, and you wanted to manage the risk of contracting the virus in a way that allowed you freedom. Taking this one step further, what constitutes freedom to you may be different from what constitutes freedom to your neighbor. Alternatively, using the archetypal values of a collective culture, perhaps responsibility toward others was the value underpinning your decisions during the pandemic, to the detriment of your personal freedom. Health took primacy, and you wanted to manage the risk in a way that was beneficial for the collective, and yourself.
While the Wealth of Health and Quality of Life (P2) was the ultimate goal, the values folding into the P2 envelope were driving your behavior and decisions (relating to this goal). Values drive decisions. To reiterate a point made earlier, values help speed up the decision‐making process.
In this example, the principle of Wealth of Health and Quality of Life (P2) was the ultimate goal. Within the context of wealth, the principle of health is a collective, objective truth that is unchanging and permanent, meaning that while health was the ultimate goal during the pandemic, that's not to say that it isn't always important. Further, in this example, we explored two different individual personal values. The first personal value was personal freedom, which is an individual, subjective truth that is changeable and malleable, meaning that while freedom was the core value in this context, it may not be the core value in another context (or principle). The second personal value was responsibility toward others, which is also an individual, subjective truth that is changeable and malleable. For purposes of this example, regardless of which core value is most aligned to you, we can see that each appropriately folds into the principle of Wealth of Health and Quality of Life (P2), influencing behavior.
After applying the personal wealth algorithm, and discovering your wealth goal, the question then becomes—how do you best achieve it?
“If you want to live a happy life, tie it to a goal, not to people or things.”
—Albert Einstein
Notes
- 1. “The Difference between Principles and Values.” Plan Plus Online, January 11, 2019. https://www.planplusonline.com/difference-principles-values/.
- 2. “The Difference between Principles and Values.”
- 3. Hoomans, Dr. Joel. “35,000 Decisions: The Great Choices of Strategic Leaders.” The Learning Edge. Roberts Wesleyan College, March 20, 2015. https://go.roberts.edu/leadingedge/the-great-choices-of-strategic-leaders.
- 4. Xiao, Wen S. “The Role of Collectivism—Individualism in Attitudes toward Compliance and Psychological Responses during the Covid‐19 Pandemic.” Frontiers in Psychology 12 (October 28, 2021). https://doi.org/10.3389/fpsyg.2021.600826.
- 5. Nickerson, Charlotte. “Individualistic Cultures and Behavior.” Simply Psychology, September 22, 2021. https://www.simplypsychology.org/what-are-individualistic-cultures.html.
- 6. “Making Sense of Cross‐Cultural Communication.” Clearly Cultural. Accessed September 26, 2022. https://clearlycultural.com/geert-hofstede-cultural-dimensions/individualism/.
- 7. Ibid.
- 8. “Country Comparison.” Hofstede Insights, June 21, 2021. https://www.hofstede-insights.com/country-comparison/canada,japan,the-usa/.
- 9. Clear, James. “Core Values List.” James Clear (blog), June 12, 2018. https://jamesclear.com/core-values.