Monday, December 19, 2011

The Wealthy Barber Returns

Not your expected post on this blog.  I just finished reading the barber returns, and its actually quite amusing, pretty sound advice, "save and save more and save now", I usually balance living with this and maybe a little too much, as living frequently wins, an unfortunate effect of keeping the friends I have, in the words of Tyler Koyl "you only live once."  There was one particular chapter that really stuck out for me, "Consumed with Consumption".  I am going to recite a bit of it here:

     Obviously there are certain basic needs we all share - shelter, food and clothing being the big three.  Naturally in a wealthy, developed economy like Canada's, our desires will run well beyond our stream of needs into our pool of wants.  That's understandable and even healthy.  Our quest for "the good life" and the possessions and experiences it brings is part of what motivates us to work hard, innovate, embrace risks, grow our talents and then take full advantage of them.  However maybe we have gone a little too far...
     Nothing is ever enough.  We want more.  And when we get it, we want more yet again.  We want what we see on TV.  We want what our friends have.  Hick, we want what rich people have.  We even want what we already have but in the newer, fancier, bigger models... We want with such emotional intensity that we're able to convince ourselves that our desires aren't wants at all, but instead integral components of our future happiness.
     Nothing could be further from the truth.
     In reality, all our stuff weighs us down.  And our pursuit of 'more' often distracts us from what's truly important in life.  No, I'm not having an Oprah moment here.  I genuinely believe that our never-ending material quest is not only sabotaging our financial tomorrows, but also negatively impacting our psychological todays.
     The brilliant philosopher Bertrand Russell once noted, "It is preoccupation with possessions, more than anything else, that prevents us from living freely and nobly."
     I couldn't have said it better myself (which, is, of course, why I quoted him).  One of the most damaging misconceptions in personal finance is that saving for the future requires sacrifices today that lessen people's enjoyment of life.  Surprisingly, it's quite the opposite!  People who live within their means tend to be happier and less stressed.  That's true not only for the obvious reason - they know their financial futures look bright - but also because they're not consumed with consumption.  They're not in the emotionally and financially draining race to acquire the most stuff they possibly can.  A race that, it should be noted, has no finish line and thus no winner.
     Too many people are possessed by their possessions.  As Seneca said 2,000 years ago, "These individuals have riches just as we say that we have a fever, when really the fever has us."
    On status:  when you hear that John is successful, what jumps to mind?  He's a great parent?  He lives a balanced life?  He's a man of character?  Of course not.  We all think the same thin:  "Wow John's makin' the big bucks!"
     "success is synonymous with financial success"  Many times I have asked people how are the kids doing, well, "Mary is a successful dentist and Fred is a struggling mechanic."  Perhaps Fred's a struggling mechanic.  Perhaps Fred is a dud around cars and somehow his mom and dad found out through, I suppose, but more likely, they're letting their children's incomes determine their adjectives.
    Whats more, we even mismeasure this mismeasurement.  We gauge people's financial successess not by their not-worth statements (that would be bad enough), but instead by their material possessions.
     Is it any wonder conspicuous consumption rules?  
   Many of our purchases are made with others in mind, whether we realize it or not.  From the sizes of our homes to the logos on our clothes to the brands of our cars, we're trying to make a statement about ourselves and , at its core, that statement is very basic:  "Look at me - I'm worthy"
     Geoffrey Miller one of the foremost experts in evolutionary pscychology, "modern consumers in particular strive to be self-marketing minds, feeding one another hyperbole about how healthy, clever, and popular they are, through the goods and services they consume."
One of Chilton's greatest tips, don't buy more house than you can afford.  The book was good and these two sections were excellent, Chilton is accurate with his assessment of conspicuous consumption and our pursuit of status...  Now the process of going the other way, redefining who Fred the mechanic is and what our vision of success is.  A friend at work shared with me today that she only works 60% she doesn't miss the money, spends more time with her family and can't even imagine going back to 100%.  I applaud employers who allow this, I applaud them even further if they promote it.



Friday, December 16, 2011

To Give or Not to Give

It tis the season, or is it?  Continuing with my thoughts from my last post.  Should we give to others?  Where should we draw that boundary on who we give to and how much and what our own community, our country, money or time and how much? Is 0.7% of our before tax income the right amount (this is the amount urged by the United Nations for the developed world to give to the developing:, should we give for religious reasons or because we feel lucky or guilty or simply because we can?  Or contrarily why should we give at all?  I am reading Butter Down the Well  a Saskatchewan tale set in the dirty 30s and during WWII, times were desperately poor in Saskatchewan and for the most part (anecdotal evidence) people worked the dirt fields as hard as they could and managed to scrape by...People were extremely proud and took charity from no one (anecdotal).  My parents also grew up poor and for the most part raised us with modest incomes.  And now, how the times are a changing in Saskatchewan.  We have quickly become a have province and one of the wealthiest (in terms of dollars) places to live in Canada if not the world.

So if I worked my butt off to get here, why would I want to give it away?  I'm thinking the answers have a lot to do with context, how you were raised, how much affluence you grew up with, who asks you for a donation and when and if they catch you at a good time or on a good day... In a world with seven billion people, an evolution of acquire hardwired in us, does giving stand a chance?  If we can profit from that giving, in terms of feeling good, or status, or if it fits with our vision of ourselves thereby making us the person we think we are/ought to be (this is seen as very powerful in psychology, we dislike cognitive dissonance), perhaps...

Other thoughts that parallel these, is money the right thing to give?  Do the less fortunate socio-economic class in Saskatchewan and other parts of the world even need more money?  food?  housing?  clothing?  jobs?  education?  Are we even giving the right thing?

All questions and no answers, getting to be pretty typical of my posts, sorry about that.  I would like to think about these things more deeply and discuss them, empathy comes to mind, and can we as William McDonough says, "can we love all the children of all species for all time"...

to give

and if you haven't watched this video, you should, three minutes...