Yin and yang of personal finance

IN the world of martial arts, especially kung fu, the basis is the symbol of the yin and yang. The most famous advocate of this principle is the greatest martial expert to have lived, the late Bruce Lee. Proof of this is in the The Tao of Gung Fu by John Little.

In the West, it is common to mistake yin and yang as being one the opposite of the other, but in the Tao they are seen as complementary.  One cannot exist without the other.

Bruce Lee explains yin and yang like this:

“They are conceived of as essentially one, or as two coexisting forces of one indivisible whole. They are not cause and effect but should be looked at as sound and echo, or light and shadow. If this “oneness” is viewed as two separate entities, realization of the ultimate reality of kung fu won’t be achieved.”

“Yin” represents negativity, passiveness, gentleness, internal, insubstantiality, femaleness, moon, darkness, night, etc.

“Yang” represents positivity, activeness, firmness, external, substantiality, maleness, sun, brightness, day, etc.

Joined together, yin and yang illustrate the balance that is necessary and inherent; nothing can survive long by going to either extreme, being pure yin or pure yang.

From the said book, Bruce also quoted, “Extreme heat kills as do extreme cold. No violent extremes endure. Nothing lasts but sober moderation. Notice that the stiffest tree is most easily cracked, while the bamboo survives by bending with the wind. Firmness without pliancy is like a barrel without water, and pliancy without firmness is like water without a barrel.”

Another great example of this is riding a bicycle. It is impossible to move forward without simultaneously pushing down on one pedal (yang) and releasing the other (yin). Both seemingly “opposite” motions are needed to go forward. This yin and yang action results in the bike moving forward. Note that neither extreme will get you anywhere on its own…if you simultaneously push down on both pedals at the same time or “release” them both at the same time, you will most likely fall over.

In the world of personal finance, yin and yang is also applicable. There is a need to be balanced in the choice of instruments to meet our financial goals. Getting just one type for all objectives will mean a disastrous financial plan. As an actual example, there was once a question to me about an inquiry on how to build a fund intended for the down payment of a real estate two years into the future. I was informed that an insurance agent suggested VUL for that purpose. The agent is not balanced in his suggestion. This is just similar to asking for a yin and getting a yang response.

Just like Bruce Lee, he applied the yin/yang principle and made his martial art method balanced by being a multidimensional fighter. He studied and exchanged ideas with masters of different disciplines and used whatever is useful during an actual fight. The result is an almost perfect form of martial art, where he is almost unbeatable. Knowing either one of these in the absence of the other will absolutely ensure failure just as a one-dimensional fighter is sure to lose to Bruce no matter how hard he trains.

The same follows for a student of personal finance. He has to learn the different types of investment vehicles so that he personally knows what will be the best for him and at the same time not be misguided by those pretending to be real financial advisors whose goal is just to sell. Instead of becoming an ally, these types of financial advisors are enemies of your financial freedom. Choose the right people who can help you grow financially the way Bruce chose Taky Kimura and Dan Inosanto to help him grow his school. Having the right people around you can help much in balancing your financial decision and reduce the risk of getting wrong advice.

Knowing the industry and the instruments combined with strategies obtained from different experts is crucial to your financial success, just like the yin and yang.

Finally, here is a final word of wisdom that you can apply:

“Kung fu is a way of life as well as a mode of self-defense. It is based on yin [negative] and yang [positive], where everything is a complement. Examples are softness with firmness, night with day and man with woman. It is a quiet awareness of one’s opponent’s strength and plans, and how to complement them.” —Bruce Lee, The Warrior Within


Edmund Lao is a registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 73rd program this November 2018.

To inquire, e-mail info@rfp.ph or text <name><e-mail> <RFP> at 0917-9689774.



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