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I am a big history fan and of course a big fan of personal finance, so in honor of Veteran’s Day I thought I’d highlight a few financial planning lessons we can learn from some of the greatest military leaders in history.  Sun Tzu, Julius Caesar, Napoleon Bonaparte, Dwight Eisenhower, and George Marshall have all carved out a spot in the Parthenon of military leaders.  There is no reason however that those lessons should only apply to the battlefield, their lives can also help us in living out the financial lives we both desire and deserve.  I hope you enjoy it, and to any veterans reading, thank you for your past and continued service.

Sun Tzu – Control of Your Force

Sun Tzu was a Chinese General and military strategist whose book The Art of War has served as a standard in military strategy for thousands of years.  Of the many ideas put forth in his book, one that stands out for me from a personal finance perspective is his thoughts on controlling a fighting force; “The control of a large force is the same principle as the control of a few men: it is merely a question of dividing up their numbers.”  Sun Tzu was referring to how military units divide themselves up into smaller units.  The same process a division uses to issue orders is followed by Brigades, Battalions, Companies, and Platoons.  The size of the unit is different, but the principles are the same.  Sun Tzu could have been talking about personal finance.  Don’t let the size or lack of the size of your bank account keep you from developing good financial processes, systems, and habits.  Developing a budget, getting rid of debt, and being mindful of where your money is going can benefit someone with $500 in their bank account just as much as it can someone with $500,000.  Just as important, developing good financial habits when you are young and building your financial reserves can better prepare you for when you are older and likely have more financial assets and decisions to make.

Julius Caesar – Build Your Own Bridge

In 55 BC, Julius Caesar was faced with a dilemma.  How to show the tribes on the other side of the Rhine that no matter how far from Rome they were, they were never out of reach.  Faced with domestic and financial pressure at home Caesar decided on building a bridge to cross the Rhine.  He had his army construct a bridge, completed it in five days, attacked across the River, and spent eighteen days in tribal territory.  He then had his army re-cross the bridge and destroy it.  His message; we can get to you anytime we want.  How can you apply this in your financial life?  I am certainly not encouraging you to attack your neighbors; rather I want you to think of the other side of the Rhine as a financial goal or a financial issue that has been troubling you.  What is on the other side can seem unknown, or scary and create anxiety, which is why you need to be pro-active and face that issue head on.  The other side of the Rhine might be retirement or debt, but regardless of the issue, you can face it by building your own bridge.  Be mindful about understanding where your money is going on a monthly basis and make sure your spending aligns with your values and goals.  If debt management is an issue, understand what your options are, and devise a system to eliminate the debt and understand the behaviors that caused the debt.  For retirement or any other financial goal, understand what that goal is and what it will cost.  Make contributing funds towards that goal a part of your monthly budget.  These systems and processes you put into place are your bridge and can help get you to where you want to be.

Napoleon Bonaparte – “Space we can recover, lost time, never.”

Napoleon described strategy as the use of space and time, and while we can recover lost space, we can never recover lost time.  The lesson here?  Don’t wait to start investing for your future, attack it now!  The best time to start investing for your future was yesterday, but if you didn’t start then, do the next best thing and start investing today.  By starting to invest early, you can give yourself options that may not exist if you wait.  Most importantly, you also allow yourself to take advantage of the time value of money and compounding.  Investing early can also allow you to take on a little bit more risk with your investments, and gain access to potentially higher returns, since you do not have to rely on the funds in the investment in the near future.  Bottom line, don’t wait, take charge and control of your financial army now, and mobilize it toward the financial future that you want.

Dwight Eisenhower and George Marshall – “The plan is nothing, planning is everything.” and “If you get the objectives right, any lieutenant can write the strategy.”

Two of the leading military figures and statesman of the twentieth century, both President Eisenhower and General Marshall understood the importance of strategy, objectives, and planning.  Let’s start with Marshall who reportedly said, “If you get the objectives right, any lieutenant can write the strategy.”  In a military sense, Marshall is stating that you need a clearly defined Commander’s End State, i.e. objective.  If you understand what the Commander wants as an end result, even someone with a limited amount of knowledge and experience, like a Lieutenant can devise the strategy to reach those objectives.  The same can be said for your personal financial planning.  In this instance, you are the Commander, and understanding what you want your financial life to look like is of the utmost importance.  Once you know where you want to go you can then work on how to get there.  You don’t have to do it alone either, a good financial planner will work with you to help you define what you want your ideal financial life to look like and then provide the expertise and accountability in helping you get there.  What about if your ideal financial life changes?  You get a new job, or have a child, what then?  Well, that is why I like President Eisenhower’s quote so much, “The plan is nothing, but planning is everything.”  When you work with a financial planner or on your own to create a financial plan, you are essentially creating a snapshot of your financial life and a roadmap to a future destination.  When your current situation or your future life goals change, the plan itself may no longer apply, but by going through the planning process you have helped identify what you have now, where you want to go, and how to get there.  As any or all of those three things change, your financial plan can change as well.  So while the actual plan itself is a static document, it is through the planning process that you turn that static document into a dynamic and adaptive process to making financial decisions that align with your values and objectives.  Eisenhower understood this, and when it comes to personal financial planning, you should too.

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