I have a guilty pleasure. It isn’t that bad, but it does provide me with hours of enjoyment.
What is it, you ask?
I enjoy watching YouTube videos of people restoring chateaus in France. I am not sure what it is about these videos. Maybe it is the history of the buildings or the sheer audacity of repairing these once majestic structures, but I find it addictive. These are not restorations done by architects and construction engineers, these are just average people dreaming big and punching way above their weight class. I find myself watching in amazement of what they have achieved.
My favorites are:
But by far my favorite is Escape to Rural France. Each video we see Dan Preston, sometimes by himself and other times with a few of his friends working on renovating an old, abandoned chateau ruin, in the heart of France. This amazing, abandoned château ruin, built by a Russian industrialist and an up-and-coming Parisian singer, host to hundreds of Jewish children during the holocaust, owned indirectly by Coco Chanel and was burnt down in the late 1980’s. A long journey tackled by one man, Dan Preston at the Chateau De Chaumont.
The Chateau is certainly the main figure of this vlog, but Dan is the real attraction. He is engaging and affable. He invites you into the construction site and you feel like you are part of the team. The vlog is almost a daily with between a 10-to-15-minute peek into his day. There have been times though where his vlog posts have been separated by 4 or 5 days. My first thought has always been that something bad has happened to Dan. Risk is everywhere in this restoration. For example, he had a toilet dangling two stories above his head for over a year.
There is no OSHA (Occupational Safety and Health Administration) looking over his shoulder making sure that he is complying. To his credit, the only real injury I have seen over the last 2 years is a glance of a nail gun breaking the skin on his finger. But there was one scene where he was installing slates on his roof alone some 4 stories above the terra firma which has me thinking he may be pressing his luck. Not only was he on the ledge 4 stories up but he had an extension ladder resting on the ledge leaning on the slate roof. Yes, he did have a safety harness on but even then, if the ladder had slid out Dan could have severely hurt himself and put the construction back by weeks if not months.
https://youtu.be/OhuqU3sULEo?si=ddXM2TUdgf6SKY0v
Dan is not a dumb guy. He seems very ingenious and contentious, but I do believe that he, like everyone in life, has succumb to certain cognitive biases. Some of the notable biases are:
- Survivor Bias- Dan has surely fallen off his ladder and he survived. He even has a harness on at times. Yet, half a million annual injuries and a preventable toll that includes around 300 deaths are from ladder accidents—most often falling from a modest 8 feet.
- Recency Bias- I haven't hurt myself in two years so everything I am doing fine. We forget to look at the number of people who have done the exact same thing and have been hurt or died.
- Confirmation Bias- we see what we want to see, accept these desires as truth, and act accordingly.
Lately, I have been seeing a similar situation with people showing me their investment portfolios. Some of them have acquired a huge sum of money along the way. Whether through dumb luck or keen investment insight and their propensity to hang in through thick and thin has allowed them to accumulate wealth far beyond their wildest dreams.
Think of it, you invested $10,000 in Apple stock when you were in your 20s. Maybe your parents bought it for you as a graduation present and you forgot about it. You would now have $8,523,739 today, 40 years later. Now you come to a financial planner thinking about what you should do. One of the first thoughts would be to diversify away from Apple stock. It would seem obvious to most people from the outside but for many people there is an emotional attachment to their stock that has treated them so well.
What got you here may not get you there
Granted, we all see risk differently, but it doesn’t mean that risk will simply go away. Even if shown charts like the one below, biases much like Dan restoring his Chateau, keep clients from changing their investment allocations.
Daniel Kahneman, who recently passed away at the age of 90, wrote and lectured on behavioral economics and won a Nobel Prize. After his Thinking, Fast and Slow book was published he was asked, “How do we mitigate or overcome our biases?” He replied, “Not much.” He then suggested that our best chance of overcoming our inherent biases is for us to ask the best and smartest people we know to tear our ideas apart. In other words, the best advice is to “[s]low down, sleep on it, and ask your most brutal and least empathetic close friends for their advice.”
I humbly suggest that if you don’t have a friend like this who can give you the brutal and least empathetic advice on your finances, a financial planner can be a worthy substitute.
Think of us as Lucy in this comic strip from Peanuts. Financial planners need to be not only the coach who pats you on the back when things are going well but also be, as Kahneman stated, “adversarial collaborators.” We are there to help you see risk and biases which are so easily normalized because you have lived with them day to day.
Everyone needs a person whom they trust to keep us true to our intentions. In Public Discourse, Jamie Boulding talked about friendships. He states “Plato’s works are presented in dialogue form, suggesting that truth-seeking is communal, cooperative, and best practiced within relationships of friendship and love. …Today, how many people think of the intellectual life primarily in terms of fellowship, friendship, and love? Somehow, it has come to be seen in terms of what we know rather than who or what we are – or, as a philosopher might put it, in terms of epistemology rather than ontology.”
I recently had another financial planner ask me how many of my clients are my friends? It was an interesting question. I am not sure of how we define friendship here. Wikipedia states, “Friendship is a relationship of mutual affection between people. It is a stronger form of interpersonal bond than an "acquaintance" or an "association", such as a classmate, neighbor, coworker, or colleague.” I would think most clients would fit this description. Many would be described as Jamie Boulding states as an intellectual friendship. My clients are fascinating, and I find out as much about myself as I hope they receive in guidance and growth from me.
I can only hope that Dan’s friends help keep him out of harm's way.
Be well.
