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Temperament vs intellect

Temperament is defined as “a person’s or an animal’s nature as shown in the way they behave or react to situations or people.”

Whereas intellect is “the ability to think in a logical way and understand things, especially at an advanced level; your mind.”

There are things we can satisfactorily know intellectually, but there’s much more to understand at the temperamental level. For example, I don’t know how gravity works but my temperament allows me to accept gravity’s existence without intellectually understanding it.

Our temperaments allow us to have faith in reason.

The best quality financial planning should be about temperamental coaching not training your intellect. However, much of what is published is aimed at the intellect, not the temperament. It tries to educate and is immediately barking up the wrong tree.

Our job is not to educate you, but to stop you doing things that might financially destroy you and your family.

Take the endless arguments on active vs passive investing as an example. Whichever is the best approach is irrelevant if you blow yourself up by selling when prices plummet.

Your temperament determines whether your investment strategy works, not how it is constituted. Temperament is why investor returns are lower than investment returns.

Our work with you must always be 9 parts temperamental, 1 part intellectual.

Too much emphasis is placed on the intellectual at the expense of the temperamental. We innocently mistake intellect as being the higher faculty, whereas it is a subset of temperament. When we rely on intellect, we’re not using all the wisdom that’s available to us.

Our intellect can get us to any answer we want quickly and easily with a minimum of fuss. Temperament requires more of us – awareness, time, space; it can feel like work.

But temperament is where true success truly lives, it’s work we should not shirk.

Boring But Effective | Truthful, Helpful, Kind

advice@townclosefp.co.uk 

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