Lessons from the Art of War for the financial world

Few strategy books have transcended both other areas of daily life like “The Art of War” by Sun Tzu. The work that chronicles the campaigns of the famous Chinese general 2,500 years ago is a reference for strategic thinking since it was discovered by the West a little less than a century ago. Since then millions of copies have been sold and dozens of versions have been written in which to apply their teachings in very diverse fields, including finance.

Through different quotes we can see reflections that support us when making financial decisions:

The importance of studying all the information before making a decision

The importance of studying all the information before making a decision

Making decisions in a hurry is never a good measure, even less in finance. It is important to correctly study all the different savings or investment options, not only the possible profit but also all its conditions and adapt them to the objectives you set as Sun Tzu said: “deliberately reflect before making a move”

But in the Art of War they not only remain in having information, but also in the importance of the use of this information, thus it states: “Information cannot be obtained from ghosts or spirits, nor can it be taken by analogy, nor discovered through calculations . It must be obtained from people; people who know the situation of the adversary ”.

In this quotation he teaches us the importance of not being carried away by rumors or estimates, being carried away by “analogies”, such as believing that what is good for one can be for another. It is important both to have correct information and that if you do not have or do not know how to analyze “get from people; people who know the situation. ” Sun Tzu already values ​​the importance of an advisor, knowledgeable about the situation (in our case of financial products and our needs) to be able to recommend the product that best suits our objectives.

And, in several quotes from The Art of War , it alerts us to the problems that can cause rumors that we make as realities and the decisions made with erroneous or insufficient information.

Define your needs and objectives beforehand

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But the basis of Sun Tzu’s strategic thinking is in its own knowledge, of your needs and objectives. If we do not fulfill this knowledge, mastering the financial environment will be insufficient: “If you know others and know yourself, you will not be in danger in a hundred battles; if you don’t know others, but you know yourself, you will lose one battle and win another; if you don’t know others or know yourself, you will be in danger in every battle. ”

This analysis of our needs should lead us to prioritize our objectives, focusing on the most important and analyze the benefits and risks we can assume: “The considerations of the intelligent person always include objectively analyzing the benefit and harm.”

Union of the control of our finances

Union of the control of our finances

All Sun Tzu principles are based on minimalism, on the control and proper management of the resources we have. The union of the control of our finances, the analysis of our needs and the correct information of all the investment possibilities will allow us to design a strategy that will help us meet our objectives.

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