A RICH MIND
By the time we reach adulthood, we have all developed a specific attitude toward—and relationship with—money.
This is especially true in my case. For the past 24 years, thinking about money has been my full-time job.
I spent 16 years as a research analyst, investment advisor, and portfolio manager. And in the eight years since I retired from Wall Street, I’ve been living what I call “the second half of my life,” writing about world financial markets.
From an early age we’re taught that the best things in life are free, that money can’t buy happiness, that it can’t buy love . . . and so forth. These thoughts are commonplace because they’re true.
But that’s not the whole story.
Money is the most egalitarian force in society, bestowing power on whoever holds it. It gives you the freedom to make important choices in your life. No one is truly free who is a slave to his job, his creditors, his circumstances, or his overhead.
Money may not buy happiness, but it sure steamrolls a whole lot of problems. As essayist Logan Pearsall Smith pointed out, “There are few sorrows, however poignant, in which a good income is of no avail.”
Money also makes it easier to relax, to experience peace of mind. As author Tom Robbins notes, “There’s a certain Buddhistic calm that comes from having money in the bank.”
Overcoming money worries allows you to get on with your life and focus on the people and activities you love. To pretend this isn’t so can be a form of denial, a sort of spiritual snobbery. Or it may mean that a lifetime of comfortable living has blinded us to the hardships that exist without it.
Money is freedom. It’s power, in the best sense. It allows you to support worthy causes and help those in need. It enables you to spend your life the way you want.
Of course, it would probably take a lot of money for you to have and do everything you want. That may not be possible. More importantly, it may not be desirable.
As J. Brotherton said, “My riches consist not in the extent of my possessions, but in the fewness of my wants.”
Once you start accumulating a bit of money, in fact, you’re faced with a new set of problems and responsibilities. You have to grow and protect it. You have to manage risk, stay ahead of inflation and the taxman. You have to decide whom to give it to and when.
These issues were the subject of my previous book, The Gone Fishin’ Portfolio: Get Wise, Get Wealthy . . . and Get On With Your Life.
In this book, I want to share a more personal philosophy of money . . . and of life.
What does money mean to you? What are you working for, saving for? How are you managing your relationship with money? How important is it in your life? What is it giving you? What is it costing you?
These are deeply personal issues. No one can simply hand you the answers. But it never hurts to consider the questions.
ARE YOU SUFFERING FROM AFFLUENZA?
In his 1997 film Affluenza, producer John de Graaf claims there is a virus loose in society that threatens our wallets, our friendships, our families, our communities, and our environment.
Each year it costs us hundreds of billions of dollars, wastes our precious time, ruins our health, and adversely affects our quality of life. What is affluenza, exactly?
De Graff defines it as “a painful, contagious, socially-transmitted condition of overload, debt, anxiety and waste resulting from the dogged pursuit of more.”
He argues that too many of us are working ourselves to death to accumulate an endless array of goods and services we don’t really need.
This creates stress. Stress, in turn, creates health problems, including headaches, stomachaches, ulcers, depression, even heart attacks.
Medical research shows that people in industrial nations lose more years from disability and premature death due to stress-related illnesses than other ailments.
Affluenza drives up healthcare costs, tears at the fabric of families, and shortens our stay on the right side of the daisies.
Before you mistake me for the national scold, however, let me make a couple of confessions.
First off, I’m a libertarian at heart. I realize that personal consumption—roughly two-thirds of all economic activity—drives the economy. Moreover, if someone really wants to devote his life to accumulating more, more, more, that’s his right.
As John Maynard Keynes put it, “It is better that a man should tyrannize over his bank balance than over his fellow citizens.”
(Although, personally, I’ve never met anyone who obtained lasting satisfaction with a Visa or Mastercard.)
Second, I’m not immune to the occasional bout of affluenza myself. I rarely pass a bookstore or record shop, for example, without poking my head inside. And whenever I leave Barnes & Noble, the clerk at the register always asks the same thing:
“Would you like us to double-bag that for you?”
We all have to consume to survive, of course. But Madison Avenue is right there beside us, aiding us, abetting us . . . giving us a not-so-subtle push.
Marketers want to convince us that our lives would be so much better if we would only just drive this car, drink this lite beer, use this antiwrinkle cream, or fly these friendly skies.
Every day we are bombarded: billboards, Internet banners, TV and radio commercials, newspaper and magazine ads. You can’t even get away at a public beach. Single-engine planes criss-cross the sky trailing banners, “Joe’s Crab Shack: All You Can Eat $17.99” or “2-for-1 Drinks All Day at Bennigan’s.”
Advertisers are getting more sophisticated, too. The new science of neuromarketing is designed to help retailers unlock the subconscious thoughts, feelings, and desires that drive our purchasing decisions.
Using magnetic resonance imaging scanners to record brain activity in minute detail, marketers now measure how their products affect the brain’s pleasure centers. In short, they are creating products and advertising that stimulate the production of dopamine.
And it works. Today psychologists routinely talk about “retail therapy,” where consumers shop just to get a short-term high to ward off boredom or the blues.
How do we resist?
First by recognizing our limits, both financial and material. After all, it really doesn’t really take a lot of money to meet our needs.
Many of the other things we covet don’t hold our attention long. Recognize that and you may conclude that they aren’t worth the time and trouble it takes to acquire them.
As the philosopher Bertrand Russell wrote, “The man who acquires easily things for which he feels only a moderate desire concludes that the attainment of desire does not bring happiness. . . . He forgets that to be without some of the things you want is an indispensable part of happiness.”
A well-lived life cannot just be about competing against others for resources. He who dies with the most toys doesn’t win.
As Laurence G. Boldt writes in The Tao of Abundance,
The psychology of plenty differs fundamentally from the psychology of scarcity. If I view my life as a struggle to sustain my existence in an unfriendly world, then intimidation, competitiveness, and greed make sense. If I view life itself as a gift, attitudes of praise, thanksgiving and responsibility naturally follow.
It’s only human to want to better our material conditions, of course. But the relentless quest for more often undermines our quality of life. Successful lives are built not bought. And an over-consumptive lifestyle ultimately limits our choices.
As Russell said, “It is preoccupation with possessions, more than anything else, that prevents us from living freely and nobly.”
Curing affluenza means dropping the chains of mindless consumption. It means recognizing that lives based on having are less free than those based on doing or being.
Wise men and women have known this for millennia.
In 400 B.C.E., the Greek philosopher Diogenes taught that no man needed much—and that we shouldn’t complain of material loss. He once went to Athens with his slave Manes, who ran away. Diogenes shrugged off his ill fortune saying, “If Manes can live without Diogenes, why not Diogenes without Manes?”
In It’s All In Your Head, Stephen M. Pollan and Mark Levine relate another story about the famous ascetic:
Diogenes is sitting on the side of the road eating his simple meal of porridge. A court philosopher sees him and comes over to chat. “You know, Diogenes, if you learned to play up to the king like the rest of us, you wouldn’t have to live on porridge.” Diogenes doesn’t even glance up from his bowl; he just says, “If you learned to live on porridge, you wouldn’t have to play up to the king.”
Reasonable, affordable consumption means less struggle, less debt, less hassles, less stress.
It also grants us more time—and with it the opportunity for new experiences, better relationships, and greater personal freedom.
As Oscar Wilde said, “The true perfection of man lies not in what man has, but in what man is.”
WHY MONEY WON’T GET YOU TO “LEVEL THREE”
In the Declaration of Independence, Thomas Jefferson argued that life, liberty, and the pursuit of happiness are our inalienable rights.
You have life and more liberty than your ancestors could possibly have imagined. Not just freedom from tyrants and feudal lords, but freedom from backbreaking labor, forced conscription, arranged marriages, widespread banditry and injustice, religious persecution, economic privation, and the threat of dozens of now-curable diseases.
Happiness, on the other hand, is a little trickier.
Notice that Jefferson was wise enough to say we don’t have a right to happiness itself, just the pursuit of it. After all, it can be elusive . . . especially Level Three.
According to Daniel Nettle, a lecturer in Psychology at the University of Newcastle in Britain and the author of Happiness: The Science Behind Your Smile, there are three levels of happiness.
Level One is the happiness of momentary feelings. This is the enjoyment we take in a good movie, a game of tennis, or a meal spent in the company of friends or family. This type of happiness is immediate but transient. Whenever you experience joy or pleasure, you have reached Level One.
Level Two is more cognitive. It involves judgments about feelings. If you are satisfied with your life, if you reflect on your pleasures and pains and feel that, overall, the balance is positive, you’ve reached Level Two. You are likely to report a general sense of satisfaction or wellbeing.
And Level Three? According to Nettle, you reach Level Three only when you feel like you are flourishing, fulfilling your life’s potential. Level Three is about living the highest quality life.
What is that, exactly?
I’m tempted to paraphrase Louis Armstrong. Asked by an interviewer to define jazz, he replied “Man, if you gotta ask, you’ll never know.”
Clearly, however, a high-quality life is not synonymous with simply making a lot of money.
I’m not an idealist arguing that money doesn’t matter. It does.
Money determines your neighborhood and the house your kids grow up in. It determines whether they go to college and where. It can decide whether you get a good doctor or an amazing doctor. If you need a lawyer, it determines whether you get an ambulance chaser or the best defense attorney money can buy. It provides freedom, security, and peace of mind.
In short, money matters. But it doesn’t buy genuine love or friendship. It won’t solve your problems, end your worries, fix your marriage, make you “a success,” or even make you more charitable. People without money often imagine it will do all these things. It won’t.
That’s because money doesn’t change you. It magnifies you, making it clear to everyone who you really are. In the end, you are who you are because of the choices you make, not the amount of money you have.
As author and TV personality Larry Winget says, “If Paris, Britney and Lindsey weren’t rich, they would still be crashing cars and acting stupid at Wal-Mart instead of on Rodeo Drive. You ...