The Law of Conservation of Problems

Conservation Laws

In physics there are several conservation laws. Among them are:

  • Conservation of Energy
  • Conservation of Angular Momentum
  • Conservation of Electric Charge
  • Conservation of Weak Isospin

The laws require the existence of an isolated physical system. The idea is that no matter what happens within the system, the net total of the factors under review never changes. For example, energy could be heat, or light, or stored chemically. Whatever was there in the beginning will be there, possibly in a different form.

Closed Systems exist in more than physics.

Your family, your community, your church, even your country are closed systems. At least to some extent. There is a conservation law for that too. It is the law of conservation of problems.

Suppose you are struggling financially. Your problems are meeting the mortgage payment, keeping the family happy about what you can afford, finding a away to deal with an unforeseen car repair, and setting some aside for the future. Some will even find working to be stressful and unfulfilling. What would be the solution?

More money solves many problems

Like all of the ones itemized above. The problem is the closed system. Why do you suppose so many lottery winners see it as a curse rather than a blessing? Why do heirs often blow their inheritance?

Because of conservation. No life is without problems. Maybe the mortgage is no longer one, but there are the financial helpers and charities beating at the door. New phone numbers required too. Long lost friends and relatives appear. Lawyers to set up structures and accountants to do tax plans. If the numbers are big enough, maybe a security team.

One problem money won’t solve

People need to be moving toward some goal. That is what we do. Seek goals. Solve problems. We don’t handle completed goals very well.

The Money Game is a 50 year old book. A point from it bears repeating.

“I have known a lot of investors who came to the markets to make money, and they told themselves that what they wanted was the money: security, a trip around the world, a new sloop, a country estate, an art collection, a Caribbean house for cold winters. And they succeeded. So they sat on the dock of the Caribbean home, chatting with their art dealers and gazing fondly at the new sloop, and after a while it was a bit flat. Something was missing.”

So what was missing?

The struggle. We need a purpose, even when we don’t need the money. Always remember to have new goals. Always remember to prepare children for an inheritance.

A Warren Buffett thought.

“I will leave them enough money so that they would feel they could do anything, but not so much that they could do nothing.

The trick is in preparing them so that the money is not just a new a different problem. Start early.

I help business owners, professionals, and others understand and manage risk and other financial issues. To help them achieve their goals, I use tax efficiencies and design advantages to acquire more efficient income and larger, more liquid estates.

In previous careers, I have been a partner in a large, international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you. 705-927-4770

One Comment on “The Law of Conservation of Problems

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