In the depths of the financial crisis of 2008, I was very discouraged about my ability to invest wisely. At the time, I was focused on a portfolio of companies my firm had bought at my recommendation. The survival of many of our companies was on a knife’s edge. Decisions had to be made about which companies to support through the crisis and which to let go. I was very stressed and wondering whether this career was really for me.
My wife was worried about me and asked a very close and wise friend of ours, M, to speak to me. M had started his own successful investment business and had the perspective of a longtime founder and CEO. He had lived through many more ups and downs than had I.
We were all at a charity benefit at the time, and M. took me aside and shared his advice. In times of crisis, he said, a lot of people have thoughts similar to mine––that the stress and the hassle just wasn’t worth it. Right away, that made me feel better. M. urged me to stick with it, because riding through the tough times is not only a natural part of the business I had chosen, but that often the tough times provide the best opportunities for future success. In a few minutes, he had given me the best career advice I’ve ever received, and I’ll forever be grateful for it. (And due credit to my wife for having M speak to me!)
Because all of us are to some extent narcissistic creatures, and because we can assess what happens when we follow someone’s advice, it is the advice we are given and not the advice we give that we tend to remember. And certainly there is an art to figuring out who and when to ask for advice.
But what are the best practices for giving advice? I think the proper attitude when asked for advice is, at least initially, to be duly terrified. Because offering poor advice could be a disaster. In an extreme case, a layperson giving flawed medical advice could lead to death. So the first best practice is NOT to give advice if you lack qualification. Instead, you could refer the person to someone who is actually qualified. In doing so, you are practicing the second best practice, which is to shrink your own ego as much as possible by admitting what you do not know.
But let’s say you are in fact qualified. The third best practice is to try to inhabit the circumstances and worldview of the person you’re advising. You will of course draw upon your own set of experiences, but you have to be very thoughtful about distinguishing between (1) the advice you’d give yourself vs. (2) the advice you should give to the person asking. In order to do this, you need to dismiss your own current circumstances as much as possible. To the point of almost becoming invisible to yourself.
Sometimes, you’ll end up giving advice that’s consistent with what you would do in a similar circumstance. The advice my friend M gave to me had that quality. Often, however, you’ll find yourself in a very different position than the person you’re advising.
For parents, giving advice to your children is probably the most common advice challenge. As they get older, the challenge gets greater (our children are 34, 32, and 28) as you have to either be asked for advice or give unsolicited advice selectively and always at your own peril! I am especially terrified when giving advice to my children, because I believe they take my advice into consideration, and since I love them very much, my regret in misleading them would be massive.
It is often so tempting to use your own experience as the primary or even sole basis for advice to your children. Resist the temptation! Your children are not you, and while their personalities and yours may have similarities, their circumstances will always be different. Likely for many reasons, including all the cultural and technological changes from one generation to the next.
Here’s an example of what not to do. About fifteen years ago, my oldest child asked for my advice about her college essay topic. She’d had a rough experience at a sleep away camp (mean girls, cliques). My inept and unqualified essay advice was to use that experience to show the development of her empathetic skills. How far she’d come form the age of tirteen.
Thankfully, her school’s college counselor told her to change topic. The essay I’d suggested made her sound as if she were still actively bitter about her camp experience and possibly even bent on revenge! (Many jokes have ensued between my daughter and me about my bad essay advice, so it will live on eternally as part of our mutual lexicon.)
My recent career pivot involves giving advice to a friend who will (most likely) occupy a political office. If my vocation is to give advice, then like any other vocation, I’ll need to work hard at putting myself in the right position to give useful advice. And also work hard at understanding as completely as possible my friend’s priorities and his measures of success.
And if it ever became too difficult to subordinate my own priorities and my own worldview to those of my friend, if the gulf became too wide, I’d need to step aside. To do otherwise would be disloyal. Luckily for me, I cannot see that happening.
I tread carefully here, for I do not recall the details of the reference I'm about to make, but the Talmud tells us something about advice, too, and if memory serves me correctly (make that IF), the point was to not water down advice for others in order to be more cautious on there behalf, thereby possibly costing them some missed opportunity. The example was something like this: If you give me money to invest for you, I should not invest it more conservatively than I would my own, for I might be costing you the same profit I would make and that would be doing you a disservice. To the contrary, I should invest your money as I would if it were mine, neither more or less conservatively.
I was thinking about investing advice. I think it's a good example of how different circumstances dictate different levels of risk/reward of how to invest.
That said, i agree that being entrusted with investing someone else's money should not by itself make the investment plan more conservative.