"A
man cannot serve both God and Mammon."
I
wanted to write my thoughts on money here, as my views on it are somewhat unique,
and while we are alive it is such an important topic.
Up
until the age of about 25 I really did not think about money at all. I probably
had a few complaining thoughts about wanting to grow up with a little more
space, sure, but I never connected that to the idea of wealth. My sense of
money was one of indifference to it... not seeing it as an ultimate
"end" or goal for life at all.
Once
I started working, I still didn't really think about money. I didn't have a
sense of what money was worth (in the sense of time or what could be bought
with it), for instance. At the same time, I was an excellent saver. I had a
very intensely anti-materialistic view, and as a product of that I basically didn't
spend any money (I did not think it would lead to anything gratifying). So, a
majority of the money I made I ended up saving (at the time, in an extremely
low yielding savings account).
It
took until my mid-20s, after dealing with two extremely dysfunctional
workplaces and being unemployed and forced to work as a bank clerk, when I
started to think about money. It actually hit me one day (it was about three
years ago now) like a thunder bolt.
At
the time I had been tasked with selling a number of the bank's financial
products, and as I investigated each of them I found that they were all crap. I
really could not honestly advocate for using any one of them. For instance, one
program required the customer to make a certain number of purchases a month,
and if they did they would get a higher interest rate on their savings account
(this was when a 1% return on a savings account was considered
"good").
Looking
into these got me thinking about my own savings, and as I did so I realized how
little the interest was on savings accounts. I did not know anything about the
federal funds rate at this time. I had always been told "put your money in
the bank" for years... when since 2000 this had been terrible advice.
This
eventually got me interested in investing, and now I still keep the high
savings rate but I put most of my savings into stocks instead. I practice the
boring but effective buy-and-hold method of Warren Buffett, buying reliable,
large cap stocks, many of which pay dividends, and simply hold them and buy
more year after year. Whenever I get a paycheck, I try to buy more stocks with
them, and at the same time reinvest all my dividends. Generally once I buy a
stock I never sell - I like Warren's quotes "the best holding period is
forever" and "to see yourself as a part owner in a business."
While
I have only had very working class jobs (~35k in income) for the past three
years, practicing this very simple and disciplined method has brought
results... and according to the "net worth" chart for my age I am in
the "top 10%."
Making
progress with this method seems to be mostly about emotion. It is not about
intelligence, but about your personal attitude toward money. There is a paradox
at the heart of this which is the whole purpose of what I wanted to touch on
here...
The Calvinist Work Ethic
I
live in Massachusetts, and my state was founded by a group of hardy people
called the Pilgrims. They were religious dissenters from England, who felt the
Anglican Church was too moderate and wanted to practice a more ascetical
lifestyle. So, they sailed across the Atlantic to build civilization in the
wilderness of New England.
While
I have many problems with Calvinist theology - like its intolerance, repressive
nature, and fanaticism - I do at the same time have a respect for the strength
of a group who built society here in what at the time would have been such
harsh conditions.
I
discuss the Puritans because there is a paradox about their worldview, a belief
that is a part of Dutch, English, and German culture, that I feel gets at the
heart of wealth building. It was
discussed by the sociologist Max Weber as the "Calvinist Work Ethic."
The
paradox goes something like this: wealth is made through hard work and high
savings rates. At the same time, in this view saving is the product of an ascetical
worldview - a worldview that is ultimately anti-materialistic and hates money.
This
is what I am getting at as my view of money is ultimately this. While I
recognize wealth is necessary while we are alive, and the possession of it does
lead to freedom now, at the same time I have an indifferent and contemptuous
attitude toward it.
As
I reflect, I cannot see a more foolish worldview than the accumulation of
wealth. Human life is extremely short and when you die all your possessions
leave you. "Do not store up your treasures on the earth," says
Christ. I know many, many people whose singular goal is the amassing of wealth.
They want to be multi-millionaires. One problem with this view is it becomes
very distracting. Instead of focusing on areas of value, your life becomes
consumed with starting businesses and managing them.
The Inequality Problem
One
of the biggest issues for human beings is providing for their material needs ("stage
1") and then fulfilling their wants ("stage 2") while alive. Often,
we spend most of our waking life looking after these two variables. There is
very little time for thinking about philosophy, religion, and so on.
It
seems there are a few ways one can be wealthy... 1. be born into it, 2. become
an entrepreneur (through which the goal of money consumes you), or 3. practice
the disciplined savings method I mentioned above. Of these, it seems the method
I am advocating for is the best approach.
At
the same time, we are speaking about only one lifetime; assuming we live in a
world where "eternal return" operates, if you achieve wealth in one
life it will leave you in the next, and you will be left in the same situation
as before.
Being
born into money may not be a blessing, as you may not be hit with that
"thunder bolt" I talked about. Born into money, you may not be
indifferent or hostile to wealth (you may actually see it as potentially
fulfilling), and you may not understand how to manage it. So, you might spend
all the money instead.
I do
believe that civilization should have some socialized elements simply out of a
sense of justice for all. Eventually you will be reborn into the lower classes
and will need your needs provided for. That is why as a community I think we
should all come together as taxpayers and make sure there is universal
healthcare, education, and perhaps even a basic income for all.
