Wisdom and Knowledge – What’s the Difference for Clients and Financial Advisors?
This is a guest post by Don Connelly originally published on the FA Magazine website.
We are living in the Information Era. The government relinquished control of the internet in 1984 and the speed at which we could access information exploded. Each day, information becomes more easily transferable and knowledge more readily gained. Yet things are more complicated than ever.
You’d think that the more information available, the more we’d learn; and the more we’d learn, the clearer and simpler things would become. I find it ironic that the opposite is true.
As we gather information, we acquire knowledge.
Knowledge is a grasp of the facts, the sum of what we know. Knowledge is awareness. But knowledge is not wisdom. Wisdom is knowing what to do with that knowledge.
Too many people fail to realize that wisdom and knowledge are not synonyms.
George Orwell observed that every generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after it. Today’s investors are guilty as charged. Their easy access to information has (mis)led them to believe that they are the best and the brightest. But they remind us every day that that is not the case. Their mistakes are age-old.