An Embarrassment of Riches

Tapping Into the World's Greatest Legacy of Wealth

Alexander Green

• Publisher: Wiley
• Year: 2013
• ISBN:
  9781118646557
• Edition: 1
• Topic: Crescita personale
• Subtopic: Finanza a livello personale

Tune into the news and you'll hear stories of war, disease, natural disasters, corruption, violence, poverty, crime, nuclear proliferation, terrorism and political dysfunction in Washington. Polls show many believe the American dream is fading, our children face limited opportunities, and the country is decidedly on the wrong track. Yet this dour perspective – one recycled 24/7 by the national media – is a gross distortion of the world we live in today.

As national investment expert and bestselling author Alexander Green reveals in this engrossing and provocative new book, the human race has never had it so good. In the West today, we work shorter hours, have more purchasing power, enjoy goods and services in almost limitless supply, and have more leisure time than ever before. Living standards are the highest they have ever been. The human life span has nearly doubled over the past hundred years. Literacy and education levels – even I.Q.'s – are at all-time highs. Technology and medicine are revolutionizing our lives. All forms of pollution – with the exception of greenhouse gases – are in decline. Access to the arts has never been greater. Crime is in a long-term cycle of decline. And the risk of death by violence has never been smaller for most of humanity.

By almost every measure, our lives today are wealthy beyond measure. We are all heir to an embarrassment of riches. Yet – thanks in large part the drumbeat of negative media coverage – most of us don't realize it. Green compares the average citizen to "a lottery winner whose ticket is lost in some upstairs drawer."

The consequences of adopting the cynical but popular worldview are many, including needless pessimism, missed investment opportunities, and – surprisingly – even poorer health. Yet An Embarrassment of Riches provides a powerful antidote.

Green begins with a robust survey of the many ways our lives are becoming longer, easier, safer, healthier and more prosperous. He then embarks on a wide-ranging exploration of the ideas and the many men and women – both living and dead – that are still enriching our lives today.

Among the many subjects explored are American exceptionalism, the extraordinary power of economic freedom, the lifesaving role of medicine and technology, the life-extending benefits of optimism, the radical theology of Thomas Jefferson, the keys to civility and greatness, the wisdom of Confucius and Aristotle, the ability of beauty to enrich our lives, and even one artist's thought-provoking take on "how to defeat death."

In An Embarrassment of Riches, New York Times bestselling author Alexander Green offers a holistic approach to wealth – and offers a welcome perspective that allows us to live fuller, richer lives.

PART ONE

A WEALTH OF GRATITUDE

Imagine walking into a room full of strangers and searching in vain to find some commonality. The folks there have various educational backgrounds and vocations, represents different age groups, races and creeds, and hale from different parts of the country.

Then you discover something odd. Everyone in the room is a lottery winner. Would that not be an astonishing coincidence? Of course it would. Yet you and everyone you know have already beaten longer odds than any Powerball winner. You just don’t realize it.

For example, when you consider your good fortune, you probably tell yourself something like, “I have decent health, a loving family, good friends, a comfortable home, and plenty of stuff.”

Yet, important as these things are, it hardly scratches the surface. The very fact that you are here at all would defy the odds-makers. In “Unweaving the Rainbow,” Oxford biologist Richard Dawkins puts things in perspective:

“We are going to die, and that makes us the lucky ones. Most people are never going to die because they are never going to be born. The potential people who could have been here in my place but who will in fact never see the light of day outnumber the sand grains of Sahara. Certainly those unborn ghosts include greater poets than Keats, scientists greater than Newton. We know this because the set of possible people allowed by our DNA so massively outnumbers the set of actual people. In the teeth of these stupefying odds it is you and I, in our ordinariness, that are here.”

Consider how little chance you had of ever arriving at this party. Every one of your forebears had to be attractive enough to find a mate, healthy enough to reproduce, and sufficiently blessed by fate and circumstances to live long enough to do so. Each was able to deliver a tiny charge of genetic material to the right partner at the right moment in order to perpetuate the only possible sequence of hereditary combinations that would result in you.

The chances of your ever being born are almost incalculably slim. The odds against arriving in the modern era are also staggering. And you were likely born in the prosperous West. Billions alive today were born into wrenching poverty in China, India, sub-Saharan Africa, or some miserable failed state.

You could easily be living in a society without Western freedoms, modern infrastructure, or even a reliable power supply. You might have no free-market system to incentivize you, no police force to protect you, no reliable court system to enforce contracts or protect your rights.

Recognize that, whatever your personal circumstances, you have been astoundingly fortunate. Why is this important to know? Because it puts things in perspective. We should all feel immense appreciation for the life that we were given—and make a conscious effort to practice looking at what’s right in our lives rather than what’s missing.

As Cicero noted a couple thousand years ago, “Gratitude is not only the greatest of virtues, but the parent of all the others.”

A Message from the Land of the Unwell

While sitting at home one spring evening in 2013, I suddenly began getting sharp, stabbing pains in what I thought was my stomach. I couldn’t even stand up. And the pains didn’t go away. They got worse.

After 30 minutes of agony, my wife, Karen, insisted we were going to the emergency room. I didn’t object.

After four hours of poking, prodding, X-rays, and CAT scans, I got the news. My stomach was fine. But my large intestine was a train wreck. I had a volvulus. That’s fancy talk for an intestine that looks like a pretzel twist. How it got that way is a bit of a mystery, but the condition requires immediate intervention as a lack of blood flow can cause tissue death, not to mention the big event itself.

The on-call surgeon—who said she’d never seen a case as severe as mine (comforting)—said the situation was dire. And while she couldn’t be sure until she got in there and started nosing around, the CAT scans also indicated I had a tumor.

Great.

There wasn’t time for a lot of deliberation. A medical team prepped me for surgery and had me sign the usual boilerplate acknowledging the potential dangers and complications, including leaving the operating room with the bed sheet over my nose instead of under it. I scribbled my name.

When I came to in the recovery room a few hours later, I had the distinct feeling someone had machine-gunned me in the gut. But I was too woozy to care. After a few groggy minutes, an orderly wheeled me into a post-op room with various tubes sticking in me or extruding out, none of them particularly pleasant.

The next few days were a combination of agony and tedium. Being hooked up to a gaggle of machines in a small, windowless room and surviving on hospital broth and saline solution doesn’t lend itself to poetry.

“Press this button and your IV will release pain medication,” the nurse told me. “Hit it as often as you feel you need it. But it won’t release a dose more than once every six minutes.”

I nodded and pressed the button.

How did this happen? One minute I’m sitting at home wondering whether there was anything less stupid on TV. The next I’m strapped to a gurney with tubes up my nose and in my arm, with a scar on my belly that would make Dr. Frankenstein proud.

After a brief assessment, however, I noted a few positives. First, there was no tumor. (Hallelujah.) Second, the attack didn’t come in the middle of my recent trips to Laos, Cambodia, or Vietnam. Or during one of my solo hikes in the Blue Ridge Mountains. Or at 30,000 feet. In short, thanks to the prompt attention I received, I was still on the right side of the daisies.

I had a few other epiphanies as well. The biggest is that you cannot adequately appreciate what nurses do until you are under their care. They are truly angels on earth. How does someone spend their days trafficking in blood, bile, vomit, phlegm, sweat, pus, and other human excreta while fluffing pillows, maintaining a cheery disposition, and exhibiting a sincere desire to make you feel as comfortable as possible? I’m not cut out for that kind of work myself. (Of course, you probably don’t want your nurse giving you investment advice either, but it takes about a nanosecond to determine who is expendable here.)

The next realization I had was how much friends and family mean at times like these. Under ordinary circumstances, these are the folks you laugh with, play with, kvetch with. But when you are flat on your back and tethered to the blinking, beeping gray towers that crowd your bed, they are your lifeline to sanity. Never wonder whether a card, a call, or a visit is worth the trouble. It is.

I was also surprised to see how easy it is to adopt a covetous spirit. As I hobbled down the hallway in my ward, hunched over and leaning on my nurse, who was pulling the IV stand, I looked with awe and envy at the hospital visitors passing by. “Look at them,” I thought. “Shoulders back, arms swinging freely, no pain whatsoever. How lucky to be them.”

Of course, this ridiculous attitude gets quashed in a hurry when the hospital PA booms out—as it does every few hours: “Code Blue. Special teams report to Room 223 immediately. Code Blue. Special teams to Room 223.” You may think things are tough. But there are always people going through worse.

And not just inside the hospital. While I was there, for instance, my old friend Rob learned that his wife, Laura, had breast cancer and needed a mastectomy. My close friend and neighbor, Katy, watched her mother suffer a massive stroke just weeks after starting chemotherapy. She died a few days later, becoming the fourth cancer victim in her family in four years. Sometimes you wonder how much heartbreak a single household can endure.

Being in the hospital also gave me a renewed appreciation of the power of science and medicine. Throughout 99.9 percent of human history, people who developed my particular gastrointestinal problem had a common experience. They died. We are incredibly fortunate to be among the tiny fraction of 1 percent of humanity who live in an era of scientific understanding, medical know-how, and—never underestimate it—general anesthesia.

So what causes cecal volvulus? That’s what friends and family members kept asking me all week. The scary part is that doctors really don’t know. You do get more susceptible as you get older, so Baby Boomers like me are hearing more about it. As my friend Jimmy commented in the hospital, “Colonic volvulus? Oh, right. I had two dogs and a horse that died from that.”

He almost added a buddy to that list. After the operation, my surgeon said my situation was so extreme that I may have been less than 24 hours from a catastrophic bursting of the intestine.

That isn’t how I ever imagined things would end. I always thought I might go quietly in my sleep, like my grandfather did. Not yelling and screaming like the passengers in his car. (Terrible joke, I know.)

The next week a friend asked me if these events shook me up, changed me. I wouldn’t pass a polygraph if I said the experience wasn’t a bit unsettling. But my recovery went well. There was no postoperative infection and I gradually weaned myself off the painkillers.

As for any lasting change, probably not. Within a few days I was back home, annoying everyone the same as before, but this time with a heightened realization that you may have personal problems, you may have family problems or career problems or financial problems, but if you or someone you love doesn’t have a major medical problem—believe me—things could be worse.

The Reason You Should Be Biased

I’m sometimes accused of being overly optimistic. Mea culpa. I am an optimist, always have been. Every project I undertake, I expect to see to a successful conclusion. When events take a turn for the worse, I start imagining how they will get better. My general attitude is that things will work out, even though—needless to say—sometimes they don’t.

We all walk around carrying mental images of what the world is like and how the future will unfold. Some see the glass as half full. Others don’t. Yet psychologists have discovered that the vast majority of healthy, successful individuals are optimistic, even when it isn’t warranted. It turns out many of us truly are wearing rose-colored glasses. And it helps.

Cognitive scientists reveal that this illusion serves an important function: it turns possibilities into probabilities. Moreover, there is mounting evidence that those who take a pessimistic attitude—even if they are sometimes correct—are risking their careers, their personal relationships, and even their health.

Neuroscientist Tali Sharot writes in The Optimism Bias: A Tour of the Irrationally Positive Brain:

The data clearly shows that most people overestimate their prospects for professional achievement; expect their children to be extraordinarily gifted; miscalculate their likely life span (sometimes by twenty years or more); expect to be healthier than the average person and more successful than their peers; hugely underestimate the likelihood of divorce, cancer and unemployment; and are confident overall that their future lives will be better than those their parents put up with. This is known as the optimism bias—the inclination to overestimate the likelihood of encountering positive events in the future and to underestimate the likelihood of experiencing negative events.

Studies show that large majorities of us believe we are smarter, friendlier, more honest, and better looking than the average person. (And better drivers!) This, of course, is impossible. Most people cannot be better than most people. (Yet we are generally just as blind to this superiority illusion as we are to our optimism bias.)

However, this self-deception is not only healthy but invaluable. Optimism evokes new behavior that often creates a self-fulfilling prophecy.

Take the example of two middle-aged men—one an optimist, the other a pessimist—who find themselves in the emergency room following a heart attack. Other factors being equal, the optimist has a better chance of a full recovery, not because positive thinking itself changes his prognosis but because it leads to favorable changes in his behavior. The pessimist feels resigned. But the optimist is more likely to stop smoking, avoid fatty foods and salt, engage in moderate exercise, and avoid stress-inducing situations. It’s this change in his actions—not the sunny outlook itself—that improves his chances.

Research shows that when we alter our perceptions and dreams about the future in positive ways, it reduces anxiety and improves physical and mental health. It also motivates us to be proactive. That’s because human brains have a strong propensity to transform what we imagine into reality. Optimistic beliefs, even if they are unjustified, are often the precursor to positive actions.

This is particularly important when it comes to running your portfolio. In my experience, successful stock market investors have an optimistic long-term view that simply doesn’t have an off switch. That doesn’t mean we don’t hedge our bets or take concrete steps to reduce risk and volatility. We do. But we also tend to have an abiding faith in the ability of entrepreneurs, businesses, and capital markets to succeed in meeting people’s economic needs.

In the depths of the financial meltdown in 2008, for example, Warren Buffett penned an op-ed piece for the New York Times in which he encouraged investors to snap out of their funk:

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and will only depreciate in value. Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. . . . Most major companies will be setting new profit records 5, 10 and 20 years from now.

At the time, I agreed with his general assessment. But with the storm clouds gathering—and Wall Street titans falling like flies—I thought his forecast that American corporations would report record profits in five years was insanely optimistic. I was wrong. And so was Buffett. The companies that make up the Standard & Poor’s (S&P) 500 were earning all...