Winning the battle, losing the war 1

How to make sound and long-term financial decisions

Agatha from The Wealth Tribe
7 min readMar 5, 2020
Photo by Morgan Housel on Unsplash

John Henry was a slave for many years. When he earned his freedom, he used the chains used on him to make his tool of trade, a big heavy hammer. He got a job as a railroad worker after he convinced the bosses that his hammer was more efficient than all the other railroad workers’ tools.

A drilling machine was later introduced to replace his job. He got enraged and decided to compete against it. His fellow workers, including his son, tried to persuade him against it but he was determined. He was not a quitter and believed that his drilling skills were better.

He went ahead and drilled one side of the railroad as the machine took up the other side. Impressively, he won. The machine broke down after three meters while Henry did four meters in the same time. As his son and the other workers began to celebrate his stellar performance, Henry collapses and dies out of fatigue.

He experienced a short victory for winning against the machine. This classic American folklore teaches us how meaningless his small win was because it cost him his life. He won the battle but lost the war.

“Winning a battle but losing the war is a military mental model that refers to achieving a minor victory that ultimately results in a larger defeat, rendering the victory empty or hollow. It can also refer to gaining a small tactical advantage that corresponds to a wider disadvantage.” -Shane Parrish

This concept is also known as pyrrhic victories. These kinds of victories commonly occur in the military. If you love History, a quick Google search will give you great examples of such wars.

It’s important to understand this principle of winning the battle and losing the war as it can be used in many aspects of our lives such as family, politics, business and in court cases.

In this piece, we’ll focus on the following 10 examples of how we win the battle and lose the war in our finances:

  • Being ignorant about your finances
  • Not having a budget
  • Your fear of investing
  • Consumer debt
  • Financial procrastination
  • Not creating financial boundaries with family & friends
  • The ability to think logically, in numbers
  • Not honouring debts owed to family & friends
  • Thinking independently
  • Not thinking past instant gratification

1. Being ignorant about your finances

A common reason a lot of people give for failing to learn about money and take control of their finances is ‘understanding money is hard.’ Well, that may be true because most of us are either not taught about money at home or in school, or we learn the wrong concepts that end up informing the relationships we have with money as adults.

Being stuck in that comfort zone might work for a short while but in the long game, you lose the war of your finances as you’ll keep making the wrong investments and financial institutions take advantage of you. You’ll also be worried sick as you’ll realize that you’re not making any progress towards attaining your financial freedom. Worse still, you might have to live with debt and its’ sibling; anxiety. The extreme stress that is caused by financial insecurity has led to many suicides, rising cases of domestic violence, divorce and many other crimes.

2. Not having a budget

Without a budget and tracking my expenses, I’d sit and wonder “where did my money go?” at midmonth. Which reminds of the common meme about having more days than money in a month- that will forever be a pain point for you if you don’t budget. A budget will help you differentiate between how much you make and how much you spend. Without this, you’ll be living in a financial cloud.

Budgeting is hard and scary. I have friends who refuse to make one because they insist that they failed to stick to their budgets in the past. You should see me every last Saturday of the month pacing around my living room trying to convince myself not to review my spending for the month. It’s a daunting and uncomfortable task. However, to be a good steward of your resources, you have to budget and be accountable. You might feel okay convincing yourself to YOLO with your money but in the long term, not getting the maximum value of every shilling you earn will de detrimental.

Without a budget, you risk spending more than you earn which is a leading cause of consumer debt. Debt will lead to a financial crisis which might cost you your financial goals. Being stuck in debt also means being stuck in employment longer than you’d wish. Imagine being above sixty and still having to go to a job you hate just to cover basic bills and make financial institutions richer by financing your debt? This is one way to lose the war of your financial life. The fear that I could be a nag to my family in my old age is my biggest motivation to stick to my budget.

“Budgeting isn’t about limiting yourself-it’s about making the things that excite you possible. “The Financial Diet

3. You’re stuck in your fear of investing

Investing is often a risky undertaking.

Investing in the stock market, for example, is literally buying a piece of a company and sitting around to watch as either your money gains value or losing all of it. 80% of the time, you have zero control.

You might win in your financial battle by holding your hard-earned money in a current bank account or in cash under your mattress. Not investing, especially when you’re younger so that you have time to learn, unlearn and take advantage of compounding interest means losing the war.

4. Consumer debt

If you’re in debt, you’re not a free person. I shared my consumer debt story here and also wrote a piece on beating the debt cycle.

Spending money you haven’t earned to buy wants feels good in the short term such as when all your friends are complimenting you on your new phone, outfit or car. This is a classic example of achieving a minor victory while a major failure awaits you as you plunge deeper and deeper in debt. It gets worse if you’re stuck in the unregulated mobile money loans whose interest rates are as high as 84% per annum. A lot of studies have shown that this has led to stress and depression and in some extreme cases, suicide.

“The poor will borrow from the rich and pay them interest just to live like them for a day. Then they wonder why they can’t catch up.” Wealth Theory

5. Financial Procrastination

The high school Math teacher did a good job by teaching us how to calculate simple and compound interest. I wish he’d gone ahead to teach us how we could practically use the magic of compounding interest in our finances as adults. But we’re not going to get stuck in the past-we’ll take responsibility for our own growth now that this adulting thing is here to stay.

A lot of people say ‘I will start saving and investing when I earn more.’ Or ‘I don’t earn enough to save.’ Sadly, nobody ever has unlimited resources. Also,it’s not always true that our capacity to earn more increases as we grow older. If it does, most people tend to increase their expenditure as their salaries grow.So when we get our first job in our early twenties, we focus on spending. If we don’t jump on the investing bandwagon early enough, we lose out on the most important asset: time.

You may somewhat win the battles in your twenties and thirties by owning many shining objects, but you lose the war when you start investing late; which means you have to invest twice or thrice as much compared to those who started in their early twenties. Even worse, some people give up altogether when they realize they don’t have enough time left to take advantage of compounding interest.

The advantage of compound interest

Let’s say you invest 2,500 at 12% simple interest for 5 years.

After 5 years you’ll have:

2,500 * 12% * 5 = 4000

Let’s do the same Math while using Compounding interest

Year 1: 2,500 * 12 = 300

Year 2: 2,800 * 12 = 336

Year 3: 3,136 * 12 = 376.32

Year 4: 3,512.32 * 12 = 421.48

Year 5: 3,933.80 * 12 = 472.06

In 5 years you will get 4,405.86

Compound interest works in your favour the longer you invest. If you start later than people who started in their early twenties, it will be harder to catch up as their interest rates will be working hard on their behalf as you struggle to cut your expenditure in old age when you should be enjoying a bit more comfort and flexibility.

The disadvantage of compound interest

If you’re stuck in debt and not making a deliberate consistent effort to get unstuck, you will realize that compound interest is your worst nightmare.

A friend of mine ignored his HELB loan for more than a decade. By the time he decided that he was finally ‘earning enough’ to pay back, he got his statement and was shocked to learn that he owed close to a million shillings. Interest rates on loans also compound!

The best time to plant a tree was 20 years ago. The second best time is now. — Chinese Proverb

People will often not understand your life choices if you deliberately live your life in a way that focuses on winning your wars (whatever your wars maybe) as opposed to winning small battles. It’s okay, it’s your journey. You need to be okay with being criticized by people who are playing the short game. Learn to turn down short term bursts of happiness in favour of actions that will set you up for bigger achievements or in this case financial freedom.

“Grand strategy is the art of looking beyond the present battle and calculating ahead. It requires that you focus on your ultimate goal and plot to reach it.” — Robert Greene, The 33 Strategies of War

Read part 2 of Winning the Battle Losing the War here.

Originally published at on March 5, 2020.