Money Notes

Below you'll find some money notes and ideas. These are things I've jotted down at different times, and there is no real theme, other than that of money in general. Hopefully a few of the thoughts here will open your eyes or provide a useful bit of information.

Money Talk Taboo

Many people feel uneasy talking about money. In fact it is almost a taboo subject in some families. But generally speaking, financially successful people talk about investing, business, and personal finance every day. There are always more strategies to be learned, more opportunities to hear about, more knowledge to share and exchange with others. It isn't about obsessing on money, but about recognizing what an important part of our lives it is. We talk about health issues because they impact our lives so profoundly, so why wouldn't we talk about money as well?

Not talking often leads to relationship problems, especially when a couple has different ideas about how to make and spend money. A lack of communication about these issues can lead to all sorts of financial troubles. If you believe or feel money is a taboo subject, find people who have healthy conversations about it. Listen, and ask questions.

Improbable Goals

I tend to aim for the more probable goals in life in general and in personal finances. But I like to consider other perspectives, like that of Timothy Ferriss, author of The 4-Hour Work Week. He points out that there is less competition for improbable goals, so they can actually be more achievable (or at least pay higher rewards) than common goals. I was reminded of this by the couple in the news who snuck into a white house party with President Obama. If everyone was trying it this would never work. I also recall the young man in Canada who started with a paper clip and through a series of strategic trades turned it into a house within a year or so.

Work Time

Ferriss also asks the question, "How is it that everyone in the world needs eight hours to get their work done?" He reminds us how arbitrary these standards are. One person might do as much in two hours as most do in eight, so why does everyone report to and leave work at the same time, especially in jobs that do not require a physical presence for all those hours? The important lessons here are to find a way to do more work in less time and then find a way to get paid for the work instead of the hours. The time freed up could be devoted to any other goals, including other work that is more enjoyable.

Fake Money

In the game of Monopoly you buy rental properties that get you more money. With enough you can win the game. What do you get for winning? Actually you get to have some fun, and so it makes sense - otherwise why play? But what about the money games some people play in real life? If you're getting wealthy and buying homes and cars and other ways to impress others, but nothing important to you, why not quit? What can you lose if you have actually gained nothing of value from playing in the first place?

Money Problems

Many people think money is a problem, and it can be if you make it one. You can choose to use it in ways that cause more trouble. But you can also choose to use it in ways that contribute to your most important values. Is money a problem for a child who needs an operation to survive, or is it a solution? Is it a problem for a town which wants a new library, school, or hospital, or is it a solution?

If on some level you feel that money creates problems, you'll probably have a difficult time with it. Look at better examples of what it can do, like the ones above. Look also at your own ways of using it. It does tend to amplify the results of habits, both good and bad. If you have trouble dealing with people or with drugs, getting rich can make matters worse. But the problem is personal, and though accentuated by wealth, not caused by it. In fact, money can be part of the solution, even if only by way of a $20 book that helps you see what you are doing wrong.

Helping With Money

I know a poor family that just spent their last five hundred dollars in savings for a big birthday party for their child. These are some of the nicest people you could meet, and they will be facing financial troubles in the future, as they have in the past. It would be nice to help them out. Sometimes a little bit of money can really make a difference. This isn't one of those times.

Most of the time money won't help people in financial trouble, because the trouble comes from their lack of understanding, not from a lack of money. To spend the last of one's savings on a party for a baby that would have enjoyed a day in the park with parents just as much - that's a perfect example of poor money habits. Education might help if people are willing to accept it, but more money in a case like this just enables more bad decisions.

Cultural Pressure

If an engagement ring must be examined under a magnifying glass by a jeweler in order to know if the diamond is real, what makes the real diamond better? Obviously not appearance. It is not the resale or "investment" value either, since spouses generally don't plan to sell it and two-thirds of the value is lost the day of purchase in any case. It seems that it is nothing more than the need to impress. A man wants to impress his wife-to-be and she wants to show a "real" and large diamond to her friends.

Some people would be happier to not spend thousands for a ring that looks the same as one which cost a hundred dollars. They might prefer to use those thousands for the education of their future child, or for a vacation, or to start a business. But all they have to do is imagine the wife telling her friends that her husband bought her a cheap fake diamond ring, and they suddenly want the virtually-identical but "real" one. That is the power of cultural pressure.

This may seem very unromantic to some, and if it really is that important to impress others, buying the diamond is certainly understandable. In any case, even when both are very practical people, it seems unlikely that many couples will be willing to bring up the subject (Um, honey, can we buy a fake ring for you and use the other money pay off the car loan?). Of course, most people would be wealthier and happier if they could talk openly and honestly about money issues, and could get past those cultural expectations - at least those that are not really important to them. But don't hold your breath. And by the way, the birthday party mentioned above was another example of cultural pressure defeating the true interests of people in matters of finance. It was an expected event in the culture those parents were a part of.

If you see some truth in what I'm saying, but still feel trapped in the culture around you, this may be a bit depressing. If so, maybe this can cheer you up: you can find a compromise. For example, in the case of the ring, why not have it made? It is generally much cheaper to buy a diamond or gemstone and have it set in a ring by a jeweler, rather than buying a ring that is already made. In fact, if you buy your diamonds wholesale from a reputable dealer, you can save hundreds of dollars. You can also honestly say you had it specially made for her, which makes this option just as romantic too.

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