Life is a Journey, Not a Pyramid

Conventional financial planning advice tends to follow a pattern. First, focus on the basics—budgeting, securing your needs, saving for the future. Once you check off these boxes, you can move to the next level and buy the “extra things” you want. Those “extra things” might actually be an experience or an opportunity, such as paying for college tuition or buying a new business, but the fundamental premise remains. You calculate how much money you have, decide whether you have enough to pull the trigger, and keep moving onward and upward.

It’s all quite simple. Just get enough money, and you’ll have no more stress and no more questions. Right?

Of course not.

In the real world, you can have enough money to last three lifetimes and still worry when the S&P 500 drops a few percentage points in a day. Perhaps you know someone like this. Perhaps you are someone like this.

At Truepoint, we’ve worked closely with clients in this kind of situation for three decades and counting. They can meet their basic needs and then some. They’ve set themselves up for the future with plenty of room to spare. And yet, somehow, they seem to face more questions—and sometimes more anxiety—than ever before. They often feel uncertain or unsettled, still pushing for more without really knowing why.

It turns out that traditional financial planning doesn’t account for this predicament because it actually doesn’t address human nature very well. The standard approaches ignore the deeper—and more hidden—set of psychological needs and innate motivators that guide our behaviors. In other words, our financial actions are often subconscious efforts to satisfy our deeper, less obvious needs.

What a psychologist from the 1950s can teach you about finance

No single person has shed more insight into the question, “What truly drives human behavior?” than American psychologist Abraham Maslow, whose “hierarchy of needs” became a staple of mainstream psychology, as well as many business school classes. You probably studied him at some point, even if the details seem a bit hazy now.

Typically, Maslow’s hierarchy is described as a linear progression. Once you satisfy a “lower” need, you can then move onto the next level, one step at a time. First, you take care of your physical needs, like security; then your emotional needs, including belonging and esteem; and then after meeting all of these needs, you can finally fulfill your individual potential—what Maslow calls self-actualization.

The pyramid based on his theories looks like this:

This representation of Maslow’s theory eerily resembles the conventional financial planning sequence. First, you satisfy your basic needs, and then you can climb your way up to get more and more of the good stuff.

Life is a journey, not a pyramid

But what may surprise you is that Maslow didn’t use a pyramid to represent his hierarchy of needs. That image was created by a management consultant in the 1960s. Maslow never conceived of the pursuit of human fulfillment as some kind of video game where you complete one level—say, belonging—and then unlock the next, satisfying your lower needs for eternity and never having to address them again.

Instead, Maslow viewed the journey to self-actualization as just that: a journey.

As Scott Barry Kaufman said in his book “Transcend: The New Science of Self-Actualization”

The human condition isn’t a competition; it’s an experience. Life isn’t a trek up a summit but a journey through—a vast blue ocean, full of new opportunities for meaning and discovery but also danger and uncertainty. In this choppy surf, a pyramid is of little use. Instead, what is needed is something a bit more functional. We’ll need a sailboat.

Envisioning Maslow’s hierarchy as a sailboat can help us grasp more of the nuances of our actual life experiences. The planks represent our most basic physical needs that we need to have in place in order to stay afloat. We must continually maintain and repair these planks because we rely on the solidity of our base to endure even the greatest storms. We must recognize, therefore, that the permanent satisfaction of our needs—even those most fundamental—is not possible.

Yet, while the planks of the sailboat are essential, if all you have is the decking of a boat, you won’t get anywhere. You also need sails to unfurl so that you can capitalize on the good winds and actually move forward on your journey. But when those winds become overwhelming, you need to tie them back to preserve your progress and prepare yourself for the next bout of sunny skies.

This reconfiguration highlights the fact that a sequential, check box approach to satisfying our needs simply doesn’t work. Fulfilling one’s purpose and potential often requires two steps forward and one step back, time and time again, throughout life. It is a process in which we draw strength from fulfilling those more basic needs to continue growing and integrating. Our needs are like a collection of flowers, each requiring the gardeners’ year-long attention to thrive.

And this ties into financial planning how?

“Wait,” you might be thinking, “What does all of this have to do with financial planning?”

At Truepoint, we believe the answer is everything.

Real people do not approach their financial decisions with the calculating, linear mindset of traditional financial planning. For example, researchers have shown that people are more psychologically affected by their investment losses than by their investment gains. This may not seem rational, but it necessarily affects how people feel about their wealth and how they make financial decisions. Or, to return to our earlier discussion, these insights help us understand why someone with enough money for three lifetimes might still obsess over daily stock market performance.

The truth is that determining whether you have “enough” isn’t that complicated or that satisfying. Anyone can plug the required numbers into a calculator—how many dependents, what’s the interest rate, how long until retirement—and tell you whether you can buy that next thing.

But what we know—after 30 years of working with clients just like you—is that even very wealthy people who lead lives of luxury often face a more lingering and troubling question: “Now what?”

To get a sense of fulfillment, you need to not only identify what you want, but why you want it. Otherwise, you can keep accumulating without feeling truly satisfied.

That’s what this new series is about—how to identify, understand, and accept your deeper motivations to create the right path for you. Drawing on principles from Maslow’s hierarchy of needs, we’ll explore topics like finding a purpose, embracing the unknown, and how to develop empathy and acceptance. You might not expect these kinds of discussions from your financial advisor. But, at Truepoint, we recognize that money intersects with every aspect of our lives. So we invite you to join us in a different kind of conversation—one that explores the values and fears that drive our behaviors and helps you chart a course to deeper fulfillment.