How Creation Myths Relate To Financial Planning

Posted by: Joseph Kuo | April 28, 2023

How the Chaos/Order Cycle Relates To Financial Planning

During a session on mythology and archetypes, we discussed the concepts of form, chaos, order. and stagnation. The cycle of chaos and order is a common idea in ancient mythologies.

Many creation myths around the world feature stories of beings forming from chaos. These beings then go around the world to create and do things without limits to their power. That period of chaos typically lasts until one of the beings becomes powerful enough to establish order. In many of the myths, over time, that order stagnates or becomes corrupt, until someone else creates chaos to topple and re-establish a new order. 

As I went through the session, I began to recognize the similarity between this cycle of order and chaos and financial planning. In the beginning of the financial planning process, there are a lot of unknowns and uncertainties. How much should I be saving? Do I need to limit my spending? How much do I need for retirement? Can I afford [X]? 

From all this uncertainty, there’s a great potential for opportunity. We gather information, we brainstorm ideas, and we analyze possible scenarios. This can seem to be a lot of work at first, and perhaps a bit scary, but once we start going through the process and the plan begins to take shape, the work gets a bit easier. Things start looking less scary as possibilities and answers emerge. The chaos becomes order. With that order, comes peace of mind and the confidence that things will be okay and that there is a path forward. 

We must also be careful to distinguish between action for the sake of action, which actually maintains the level of chaos, as opposed to meaningful action that helps us progress towards order.

But as with the chaos cycle in mythology, financial planning follows a similar cycle. As time passes, we progress, and our lives change, the plan no longer fully represents what we want or need. Left alone, the plan becomes obsolete, and turns into a source of stagnation if we continue to follow it blindly.

And so we take stock of reality and re-introduce chaos into the plan so that we can re-evaluate what is possible now. Out of the new possibilities, we reassess and refine/recreate the plan. We restore order to the chaos, and the cycle repeats itself.

Why A Good Financial Plan Needs Both Order and Chaos

Clients sometimes tell me that they don’t want to create a plan because they don’t want to be limited by one. A prospective client once asked me if creating a plan meant that they would be obligated to following the plan to the letter. They were worried that once they agreed on the plan, my role would be to regulate and police their compliance with the plan. They feared that they would give up their freedom to the constraints included in the plan. 

At the same time, other clients want to have a detailed plan so they have easy visibility on their progress and clarity on what they should be doing month-to-month. If you think about it, these extremes represent varying comfort levels for order and chaos.

I believe that effective financial planning needs a bit of both, and the balance will vary depending on the preference of the client. At minimum, the financial plans I create for my clients should show the direction we want to work toward. The detail level of the plan may then vary depending on the client’s desired level of detail. They can use the plan to make everyday decisions, or to make general philosophical approaches to head toward the end goal.

No matter what, clients always have the power to decide what they want to do. It is your money and ultimately your decision on how to spend it. The plan exists as a means to guide you to future goals. A sound plan will allow for adjustments and changes as your life changes.