olivia2016
I want to do great things, but it is the little things I do each day that are the great things. That paraphrase of an Ann Kiemel quote is my life motto. It both inspires and frustrates me. It frustrates me because I wonder if I will ever do anything noticeably great. At the same time, it reminds me of the importance of life’s little – and often unnoticed – acts of thoughtfulness and generosity.

A text I got this week from my oldest daughter, Sarah, perfectly illustrated this point in a way that was very touching to this Grandpa. She wrote, “Olivia [age 5] has been urgently asking to make her ‘Christmas list’ all evening. She’s feeling behind. I assumed she’d be writing all the things she wanted on the paper. Instead she put each family member’s initial and drew what she wanted to get them.”

Sarah’s text got me thinking about a Wall Street Journal article by Alison Gopnik on the neuroscience of generosity. In How Children Get the Christmas Spirit she asks, “Are we born generous and then learn to be greedy? Or is it the other way round?” To answer that question, researchers have built on the work of Nobel Laureate Daniel Kahneman who discovered that human behavior is not so much explained by the differences between the left and the right brain as it is by the differences in what he calls fast and the slow thinking. In his book, Thinking, Fast and Slow, he explains that fast thought “…operates automatically and quickly, with little or no effort and sense of voluntary control.” Slow thought, on the other hand is, “… the effortful mental activities… [of] the conscious reasoning self that… makes choice and decides what to think… and what to do.”

In her article, Gopnik says that two researchers from the University of Chicago explored this ‘born or learned’ question by monitoring the electrical activity of children’s brains while they were engaged in various structured activities. They wanted “…to see which patterns of brain activity predicted the children’s generosity.” Was it the areas of the brain related “…to automatic instinctive reactions…” or to “…more purposeful, controlled and reflective thought?”

“They found that the quick, automatic, intuitive reaction didn’t predict how generous the children were later on. But the slow, thoughtful…brain wave did. Children who showed more of the thoughtful brain activity when they saw the morally relevant cartoons also were more likely to share later on.” So, while there are automatic responses “…to help or harm…” it is the “…more reflective, complex, and thoughtful responses…” that appear to determine our “…actions like deciding to share…” In other words, generosity is more likely a purposeful decision than it is an intuitive instinct.

Interestingly, investing is not an intuitive instinct either. Kahneman reminds investors that they operate in a very unstable environment and “…intuition cannot be trusted in the absence of stable regularities in the environment.” So, as investors, you have to have a plan and make purposeful decisions to follow it. I would also suggest that you make purposeful decisions on how to use your money. John Wesley, the Anglican cleric and theologian, recommended that you should strive to “Earn all you can, give all you can, save all you can.” At this time of year, the lesson of Scrooge reminds us that our instinct for self-preservation that manifests itself as greed needs to be tempered by conscious acts of generosity.

As I get older, I get more enjoyment out of the accomplishments of my kids and grandkids than I do from my own. While Olivia is not the youngest child in her family, she is definitely the runt of the litter – but good things come in small packages. Little Olivia got the Christmas spirit. Instead of thinking of herself, she made a purposeful decision to be generous. And while that may be a little thing, it truly is a great thing. Merry Christmas!

Article by Guerdon Ely

Guerdon T. Ely has over 25 years of experience as a financial planner and investment adviser. He is the author of Uncertainty is a Certainty: Fables for Fiduciaries, a book on prudent fiduciary investing. He is the creator and developer of two highly regarded retirement distribution software programs, MRD-Determinator and Pre-Determinator, which have been reviewed in MorningstarAdvisor.Com, Investment Advisor, Accounting Today, and WebCPA. Mr. Ely received a Master of Business Administration degree from California State University, Chico after graduating from the University of California at Santa Barbara with a degree in Economics. He is a Certified Financial Planner™, an Accredited Investment Fiduciary Analyst™, and a Chartered Financial Consultant™.

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