The Art of War, written by ancient Chinese military strategist Sun Tzu, is well known throughout the world as one of the greatest texts on warfare and military strategy.
Written over 2,000 years ago, the book and its lessons are still relevant today and are utilized by militaries all over the world to teach tactics and strategy to leaders.
The book is comprised of 13 chapters, each of which details a specific aspect of war (preparations for war, battle strategies, troop movement, etc). While it is a book on military strategy, its central premise is to win without ever having to fight:
“The supreme art of war is to win without fighting”
The influence of this text does not just apply to the military though.
In the modern world, its teachings have been adopted by businessmen/women, politicians, lawyers and even sports coaches to gain an advantage over competitors and succeed in their endeavors.
As this is a financial independence blog, it was startling to see just how much of these teachings you can apply to your life on your journey to financial independence as well.
Substitute “enemy” for debt, lifestyle inflation or “The Joneses” and all of a sudden it becomes a lot more relevant to you.
Here are several quotes (among many) that show just how pertinent this book can be to your financial life.
Applying The Art of War To Your Financial Life
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win”
To get started on your financial journey you need to have a solid plan or goals you are hoping to achieve.
This will help you to create a foundation for which you can build upon and succeed.
This is what Sun Tzu means by winning first (make a plan), and then going to war (setting out on your journey).
If you do not have a solid plan in place it is very easy to wander and get lost.
This could mean succumbing to life style inflation, or getting into credit card debt while chasing an unknown and unseen goal.
Without a plan, you are not setting yourself up for success.
“Great results can be achieved with small forces”
Start saving and investing as soon as you can in your life or career.
Early on in your career you may not make as much money and thus may not have much money left over to save. Do what you can and start putting that money into investments.
Even small amounts of money invested can lead to big returns over a long period. The earlier you start, the longer you’ll have for that money to grow.
“The supreme art of war is to subdue the enemy without fighting”
This quote is really what the book is all about.
Try and get to the point in your life where finances aren’t a struggle anymore. Where it doesn’t feel like a battle and you don’t have to worry.
Make smart financial decisions: Build your emergency fund. Avoid lifestyle inflation. Cut out expenses that don’t add value to your life.
If you can avoid debt, live within your means, and create a lifestyle where you control your finances, you effectively have created an environment where you’ve “won without fighting”.
“Appear weak when you are strong, and strong when you are weak”
We’ll focus on the first half of that statement… does this remind anyone of stealth wealth or (from what I’ve heard) The Millionaire Next Door?
When you are in a strong financial situation, you don’t have to flaunt what you have.
Living modestly and watching your wealth growth as you live comfortably within your means is a lifestyle that many in the financial independence community choose to take.
The second half of the statement… should be avoided. This is what “The Joneses” do with their big fancy house and cars. They may appear rich, but very well could be drowning in debt.
“Ponder and deliberate before you make a move”
Similar to the first quote, take the time to really think things over before making a big financial decision.
Pick an investment strategy that works for you and do some research to make an informed decision.
Perhaps you want to get into real estate investing: make sure to do your homework to set yourself up for sustained success.
If you need a car, really think about whether or not you need to buy a brand new one or get and cheaper, used one.
Sometimes, taking a step back and really thinking about something can help give a situation more clarity.
“If ignorant of both your enemy and yourself, you are certain to be in peril”
Sometimes people who are in debt don’t want to face their situation and proactively deal with it.
They might make the minimum payments so they have more money to spend on other things and potentially get further into debt.
Same thing goes for lifestyle inflation (guilty!), many do not want to address the fact that over the years their spending has gone way up.
The sooner you can become aware of and address the “enemy” (debt, lifestyle inflation, etc) the better the financial ground you will be standing on.
The Art of War Today
Despite being an extremely old book, the teachings from The Art of War still hold major relevance today.
This is why the book can be used for multiple other purposes outside of its original intent of military strategy.
It’s a quick read (as long as you don’t have a version with the complete histories and the influence behind the book!) and thus would definitely recommend that everyone reads this.
Not all the information presented will be of particular use (one of the chapters talks specifically about troop movement for example) but you’ll be able to glean enough useful information from it to make it worthwhile.
Have you read The Art of War? What other useful information/knowledge did you gain from reading the book?
14 thoughts to “Applying The Art of War To Your Financial Life”
I’ve never heard of this book but I enjoyed your take on it as it relates to FI. Appearing weak when you are strong and strong when you are weak is a great way to approach FI and life itself!
Yes I’d recommend it! The text itself is a relatively quick read too. I love that concept of stealth wealth. Appearing frugal and “poor” to the outside world but really having a big stash hidden away to find your dream lifestyle is what I’m after during the accumulation phase!
That’s a classic, but I’ve never read it. I like your take on it and will have to put it on my reading list.
If you like the Art of War, you should check out The Book of 5 Rings.
Yes you definitely should give it a read! I’ll add your recommendation to my list as well!
I was watching the movie Battleship the other day, and they quoted this book in the movie (although the actor didn’t actually apply the true meaning to the phrase he was referencing).
*Side note – I know a lot of people say it’s a terrible movie, but it’s one of those strange movies that whenever I see it on, I can’t seem to turn it off haha
Now that I have heard the Art of War (thanks to you) for the 2nd time in a week, I will have to go ahead and put it on my reading list!
Haha I’ve never seen that movie but the previews didn’t look bad! Definitely gotta read it, doesn’t take much time at all!
Great post, another one that gives great lessons is Clausewitz’s “On War”
Yes I’ve heard of that one as well. Definitely will need to get to that one in the near future
Great application of a famous book to modern day finance. Winning the battle against debt is definitely akin to a war.
Absolutely! Sometimes it takes that kind of mindset to get ahead and “conquer” your financial struggles
You are dead on about this book. 20 years ago when I was still an officer in the military, this book was required reading for young officers. I read it then, and re-read it every couple of years. I consider it really to be a book about conflict resolution, and the lessons can be adapted to any conflict situation. I suggest it to everyone.
I have never heard it talked about this way, and now I have to read it again with that in mind.
I know there was a movie about another book but let me suggest Ender’s Game. Its a story about leadership, and the isolation thereof. It’s another one that applies to conflict, really talking about leadership versus management, and the different styles. I wonder if you could make a case for it to apply here as well. It’s another one I have read since those days.
Wow yes I could imagine this would be required reading, it’s so useful! But absolutely it has everything to do with conflict resolution.
Enders Game is a great book though! Awesome example of how these thoughts and ideas all tie together
Wow, I can’t tell you how many times I read that book while in the military and I’ve never thought about it in terms of Personal Finance or FI.
Thank you! Yes definitely a different way of looking at it, but hey this book is all about handling conflict, and the battle against debt and lifestyle inflation is a huge conflict most people face in their everyday life!