All three contribute to how we get closer to knowing something as true and making something actionable.

If either three stand alone, though, it’s a wobbly stool.  Nothing to self-correct or check and balance.

Experience alone leads to foolish behavior – overly greedy or overly fearful – without the acknowledgement of the past and current knowledge.  If we act upon our experience alone with a severe market decline or a news headline, surely we become reactionary. 

Knowledge alone has a hedonic treadmill-like characteristic.  There are off shoots to every point and counter-point.  There’s no end.  If purely on knowledge, our reasons stand to become more sophisticated but less practical.  Solve a problem of the mind with the mind and now we’re two standard deviations away.

Tradition, perhaps obvious and almost by definition, protects the past.  It keeps things the way they were, for better or worse.  Alone, tradition runs the danger of putting people asleep and creating a lack of healthy criticism. 

Together, however, almost a holy trinity.

Tradition gives us a starting point and also allows generations to hand over the baton.  It offers data points along the endless line of evolution.

Knowledge can point us in the right direction.  Likely, we won’t know exactly where we’re headed, but at least we have a flashlight.

Experience validates or contradicts.  In other words, everyone has written about it, told us about it, or always done it a certain way.  But, we’ve never experienced for ourselves.  Experience functions as a bridge between our best guess and what we eventually come to know.

With all three, we balance evolution with ‘not throwing the baby out with the bath water.’

Sift, not exclude.  Both, not only.

Maybe more art than science – patiently waiting for the Venn Diagram overlap of tradition, knowledge, and experience – is what leads to useful action.

In practice, we’re likely to become aware of an idea like retirement (a tradition), gain knowledge on how to attain, and then experience and slowly validate the concept. 

This is why maintaining flexibility in retirement (or rewirement, as I sometimes call it) is so important – the imagined and the experienced will undoubtedly differ.

Another example: for those who have the ability to save and invest plentifully, I’ve observed the near exact same socioeconomic class of people voice the need for emergency funds ranging from $10,000-$500,000.  Who’s right?  Hard telling without reconciling all three – experience, knowledge, tradition.

Experience has the ability to validate or completely blow-up knowledge and tradition.  This is why people often ‘know’ something intellectually but can’t implement because their experience suggests otherwise (upbringing, cultural layers, etc).

Moreover, identical experiences can be perceived in infinite ways (the main reason experience can’t be used for stand-alone decision-making criteria). 

Lack of structure in a day might be freedom for one retiree and a form of mental prison for another.

Circular feedback: tradition and knowledge help us take next steps and create experiences.  Then, experience provides data on the validity of both.  Self-correcting.

Back to: sift, not exclude.  It’s almost always some combination of all, not only. 

With good fortune, experience provides confidence and humility.  Hopefully, just the right amount of confidence to make decisions and move forward and just the right amount of humility to account for the past and current knowledge.

These three unified are the tool for traversing the land of unprecedented financial territory and getting as close as possible to something that includes everything (advice, strategy and planning, your own experiences) and lands on personalized action.

Thanks for reading,

Mitch

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