The historian Edward Gibbon’s autobiography, entitled Memoirs of my Life and Writings (1796), contains the following passage:
In the prayers of the church our personal concerns are judiciously reduced to the threefold distinction of mind, body, and estate. The sentiments of the mind excite and exercise our social sympathy. The review of my moral and literary character is the most interesting to myself and to the public; and I may expatiate, without reproach, on my private studies; since they have produced the public writings, which can alone entitle me to the esteem and friendship of my readers. The experience of the world inculcates a discreet reserve on the subject of our person and estate, and we soon learn that a free disclosure of our riches or poverty would provoke the malice of envy, or encourage the insolence of contempt.
Let us consider this “threefold distinction” of mind, body, and estate, as he calls them. A man should seek to cultivate each of these three distinctions. Each one deserves an expenditure of intense effort. Of mind we need not say much; for in these pages we have already discussed at length the perfection of the mental attributes. The same is true with regard to body; no field of literature is more choked with repetitive ink and paper than that of physical fitness. How many times can one be told to eat a proper diet, exercise, and avoid harmful habits? One will either perform the work required, or one will not. It is estate that concerns us here; for little has been said about it in connection with mind and body. But there is strong current of connection between these three attributes. It will not do to pretend that resources are irrelevant, for it is difficult to be virtuous on an empty stomach. So what is estate, and why should it concern us?
We should note at the outset that everyone has an estate. You may never have thought about your estate, but you have one nonetheless. Your estate may be small, or it may be nothing; an estate is simply the sum of one’s assets and liabilities. Assets include real estate, bank accounts, vehicles, household goods and furnishings, clothing, intangibles like licenses or trademarks, money owed to you, and various other things. Debts include secured debts like home loans, car loans, and loans against furniture, such as those given by, for example, Nebraska Furniture Mart. Other types of debts are unsecured debts, such as credit cards, medical bills, student loans, payday loans, and loans from individuals. Tax debts are sometimes secured, and sometimes unsecured. These, in broad terms, are the different categories of debts. If one adds the value of all of one’s assets, and then subtracts the value of all of one’s obligations (debts), one may arrive at a general idea of an estate’s value: it is total assets minus total debts.
What is all of this important? The answers should be self-evident. Stability and security are worthy goals in themselves; for as we noted above, it is difficult to be virtuous when one is crushed under a mountain of debt, is hounded by mental distress borne of financial insecurity, and lives in fear of the calls and letters of debt collectors. Mental peace is impossible in such a situation. We do not mean to say that the avaricious accumulation of wealth for its own sake is a worthy goal. This is not what we say at all: in fact, we say just the opposite. But we do say that mental peace is a worthy goal, in fact a vital goal, and that financial distress is a major impediment to this mental peace we seek.
This being the case, we must insist that every man see himself as the lord of his own manor, that is, as the fiduciary of his own estate. It is he who is responsible for the keeping of his grounds, the clipping of his hedges, the weeding of his garden, and the removal of detritus from the pools and fountains that dot his acreage. No one else will perform these functions: he must do it himself. And if he does not know how to do it, he must learn quickly. But what are the duties of a fiduciary, and how may they be carried out? The fiduciary has two major responsibilities: a duty of care, and a duty of loyalty. The duty of care means that he, in the management of his assets and debts, must behave with an eye to the four cardinal virtues, which are prudence, justice, temperance, and fortitude. He must watch his paperwork, save and preserve records, regularly walk his grounds—so to speak—to see what is happening with his assets and debts, and generally behave in a way that preserves his estate, so that it lasts him for the rest of his natural life. He must exercise such care and diligence that would meet an objective standard of reasonableness. And if he has heirs, he should take care to leave something for them as well. This is the duty of care.
The duty of loyalty revolves around responsibility. The fiduciary must take seriously his duty of loyalty to himself and his estate; and if he has heirs, he must understand that his obligation of loyalty extends to them as well. Squandering the assets of his estate, committing fraud or defalcation while acting in a fiduciary capacity, or negligently allowing assets to depreciate, would all violate this duty of loyalty to the estate and to the potential future beneficiaries of the estate. All of these things, then, must be considered in the estate picture.
The wise man does not see things in isolation; he understands that everything is connected, and that a tremor in one area can create ripples of disturbance in others. He will train his mind to see his estate as one organic whole, a living organism that is in a constant state of expansion and contraction. It swells and diminishes as the values of assets and debts rise and fall. There are some who say that thinking about such things is unnecessary when one is young, or has few assets; but this view is myopic and fails to appreciate the need for the development of good habits. As Cicero says,
We have poisoned our souls by cowering behind protective shelters, by indulging in physical delights, leisure, apathy, and languid idleness; we have enfeebled and degraded our spirits with false beliefs and corrupting behaviors. [Tusc. Disp. V.27]
These “corrupting behaviors” include financial behaviors, of course. I will say that the preservation and augmentation of one’s estate should be seen as a means, and never an end in itself. This point cannot be stressed enough. The purpose of seeking financial and bodily health is not to make vain public displays, to adorn oneself with garish clothing or cars, or to sit atop piles of lucre while nursing feelings of smug superiority; the purpose is, rather, to provide a man with the security and stability to pursue those delights of the mind that philosophy, that Faithful Mistress, offers. And among these delights of the mind, none can compare with the virtues; for only through these can he make himself truly safe and secure, such that no shipwreck, no reversal of fortune, and no calamity can ever do him harm. This is the only path to the truly happy life.
Read more in the seminal translation of On Duties:
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