High performers in every field share some common attributes. One of these is that they almost always seek out experienced coaches and advisors who help them achieve high performance in the first place. Examples of high performers in various areas who work with coaches to reach or maintain high levels of performance includes:
- Olympic Level Athletes like swimmer Michael Phelps
- Elite Golfers like Tiger Woods and Rory McIlroy
- Top Fortune 500 CEOs like Indra Nooyi and Meg Whitman
- Wealthy founders of companies like Facebook and Google
As an Investment Advisor, one of the most enjoyable parts of my job is in educating and coaching my clients. Beyond the foundational work that we do in managing and growing their investments, we often guide clients through questions or issues related to entrepreneurship and financial or even life and career options.
As a financial coach, I can often see things they have missed, bring perspectives that clarify the choices at hand, and help my clients narrow down the right decision under the circumstances for them by asking diagnostic questions and helping weigh the pros and cons of each choice using the experience we bring to the table.
The American Dream says that anyone can work their way from nothing to become successful. However, almost no one achieves success by themselves. Hard work and talent focused in the wrong area will inevitably lead to failure. The cost of even one error, if it is big enough, can be extremely high and delay the achievement of goals by years or perhaps even place them out of reach forever. Correspondingly, the ability to sidestep risks and find the most efficient way to achieve objectives can be invaluable.
So why is it that even the most intelligent, best educated, naturally talented, hardworking and driven people still seek out coaches and advisors to succeed?
I recently learned about Solomons Paradox, and it holds the key to explaining why all these high performers and all of us as well can benefit from the right coaches and advisors if we wish to achieve our own goals.
What is Solomon’s Paradox?
King Solomon, the biblical king from the Old Testament, reigned over the consolidated Jewish kingdom from circa 970 to 931 BCE. Solomon was considered the wisest of kings and people would travel from near and far to seek his advice and mediation.
In the biblical tradition, young King Solomon has a dream where the Lord offers him anything. Instead of choosing money or power, Solomon asks for the wisdom to discern between good and evil with integrity. God is pleased with his request and grants him the wisdom to judge for his people.
In one of Solomon’s best-known judgements, two women came before the king to seek his help with a custody dispute of a newborn child. Both women had recently given birth to baby boys, one of whom had died, and both women claimed the living child as their own. Solomon sent for a sword and ordered the child cut in half, so that each woman could have a share. One woman readily agreed while the other begged him not to kill the boy, saying she would rather give the baby to the other woman to save his life. Solomon ruled that the woman willing to give up the child was the true mother and she was reunited with her little boy. The story spread throughout the United Monarchy and was retold as a sign of Solomon’s wisdom and justice.
While many of us know the tale of Solomon’s wisdom in the affairs of others, few realize that he seldom showed good judgement in his own personal life. Some examples of his personal bad judgement include his decisions to hoard vast amounts of wealth and build an extravagant palace on the backs of countless slave laborers. He also had hundreds of wives and concubines, many of them from foreign lands, and allowed his wives to bring the worship of their gods to his home (considered idolatry in ancient Israel).
Perhaps most egregious in his recounted failings, Solomon failed to prepare his son and heir Rehoboam to become a wise king. When Solomon died and Rehoboam took the throne, Rehoboam ignored the advice of his own advisors and dealt harshly with his people. His tyranny led to the end of the United Monarchy, where the Kingdom of Israel broke free of Rehoboam’s rule in the north and Rehoboam ruled the southern Kingdom of Judah alone. The culmination of Solomon’s lifetime of bad personal decisions ruined his once great kingdom.
The contrast between Solomon’s sage public judgements for others and the lack of wisdom in his personal life is Solomon’s paradox. Why was the wise King Solomon unable to apply more of his wisdom to his own personal choices and goals?
Does Solomon’s Paradox Still Apply?
King Solomon lived nearly 3000 years ago. Entire empires have risen and fallen in the intervening years. Inventions ranging from the printing press to electricity and the Internet have transformed our daily lives. We now have access to the collective knowledge of the human race on a device we carry around in our pocket. With all the available information and advantages of the modern era, it’s might seem that the folly of an ancient king may no longer be relevant.
Igor Grossman, a professor of psychology at the University of Waterloo in Ontario, set up a series of experiments to see if Solomon’s paradox was still a factor today. He wanted to measure if people were indeed better at giving advice to others than in evaluating and giving themselves the benefit of that same judgement ability.
Grossman’s studies found that:
- We are able give our friends better advice because of our relative objectivity. Participants imagined that their friend’s long-term romantic partner had committed infidelity. The participants were able to stay clearheaded and give well-reasoned advice.
- We give ourselves poor advice or don’t follow our own good advice. When those same participants imagined that it was their own long-term romantic partner who had committed infidelity, their responses were clouded by emotion and less reason than when it was a friends circumstances
- We don’t get wiser with age. Older participants (60-80 years old) fared no better at managing their emotions than young participants (20-40 years old) when dealing with a personal betrayal. Older folks may have more experience and a wider knowledge base but they are just as susceptible to Solomon’s paradox as the rest of us.
As poor Alice noted in Lewis Carroll’s Alice’s Adventures in Wonderland “I give myself very good advice, but I very seldom follow it”.
Solomon’s paradox is not unique to the ancient era. There are countless examples of historical figures who would have benefited from their own good advice. In an early draft of the Declaration of Independence, Thomas Jefferson denounced slavery as a “cruel war against human nature itself, violating its most sacred rights of life & liberties” yet Jefferson owned hundreds of slaves himself.
Author George Orwell’s 1984 warned of the dangers of Big Brother, yet Orwell compiled a list of what he viewed as problematic writers for the British anti-communist International Research Unit in 1949.
Even today, we can find many examples such as politicians who sabotage their political chances through irresponsible extramarital affairs and many others.
Of course, Solomon’s paradox doesn’t just apply to the rich and famous. Plenty of average people make terrible choices that they would never encourage a friend to make – impulsive relationship decisions, hearsay driven investments, or merely giving up after a temporary setback.
How Can We Avoid Solomon’s Paradox?
Luckily, we are not powerless against Solomon’s paradox. Simply being aware that the paradox exists can help to a degree. Practicing psychological distancing by reframing decisions as if we were deciding for a dear friend can help us to remain more objective.
Instead of asking yourself “Should I have that last slice of cake?”, ask from a third person perspective “Should he have that last slice of cake?”. The simple pronoun change can help you focus on facts – I’m not hungry and am trying to cut back on sugar – versus feelings created by emotions and short-termism.
Wisdom is the quality of having experience, knowledge, and good judgment. Practicing psychological distancing helps us to make more rational judgements but is insufficient in areas where we may not have the right experience or knowledge. If some of the necessary components of wisdom are absent, and especially when the decisions are complicated, your unaided decisions are still likely to yield poor results.
In these cases, finding a good mentor, coach or advisor who has the right education, experience and ability to supply the missing components of wisdom from a more objective third person perspective can help you reach your goals in just about every area of your life far more efficiently.
Very high performers have not just one, but multiple advisors that they rely on to perform even better. A pop star might employ an agent, voice coach, stylist, nutritionist, personal trainer, and dance coach to continue rising in their career.
For those of us not blessed with Shakira’s voice and dancing talent, we can still benefit from advisors in certain areas of our lives:
- Relationship counselors assist couples with communications and trust issues that would lead to divorce if unchecked
- Personal trainers and/or nutritionists can help individuals with health challenges that can literally add years or even decades to your lifespan
- Investment advisors help you multiply your money and freedom without doing any more work yourself
- Business and career coaches can help you achieve greater growth in income and profitability from your work
As with all the above examples, even in things in which we have a good knowledge base and prior experience, a qualified outside observer can help us more clearly evaluate all the options to make the optimal decision and avoid needless mistakes. This is why top CEOs still employ executive coaches despite their own credentials. The unique vantage point of an outside advisor can help us grow and prevent unnecessary stumbles in whatever arena we employ them.
What Does this Mean for Investing?
Investing, and financial health in general, is one area where almost everyone can benefit from a good advisor. Financial markets are complicated and forever changing. Money decisions are inherently personal and clouded by emotions and past experiences. Loss aversion is deeply embedded in the human psyche, even when a small loss will eventually lead to powerful long-term gains.
As an investment advisor, I often help my clients counterbalance their instincts in the achievement of their financial goals and portfolios.
When seeking a great investment and financial advisor, its important to be thorough and find a worthy coach, so take the time needed to look for someone with:
- Experience – You want an advisor who has a history of achieving the results you want to achieve. I founded Ridgewood Investments in 2002 after seven years on Wall Street and am proud of the transformational results I have achieved for my many clients over the past few decades.
- Education – As with any field, education is important. Many advisors work more as salespeople than anything else and their educational backgrounds reflect this focus. I have always been surprised when I run across clients who themselves are far more educated and thoughtful than their current “advisors” whom they turn to help them figure out what to do with their savings and financial decisions.
- Knowledge – The best advisors are always seeking to expand their knowledge and find new ways to make sure that calculation, not emotion, rules the day. They write and create content to educate others around the many details and nuances needed to make good decisions.
- Courtesy and Responsiveness – This should go without saying, but your advisor should always treat you with courtesy and respect. They should be available and responsive if you have questions or need to reach them. At Ridgewood Investments, we believe in educating, not selling. Our skilled advisors provide exceptional service and responsiveness.
Being aware of Solomon’s paradox and finding ways to avoid its reach by harnessing great coaches and advisors is a key step in the journey to achieving your personal, financial, and professional goals.
