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Book opens by talking about how shitty people are with their money and how life sucks these days. People spend too much and save too little, and rack up thousands of dollars of debt. “To have savings is to be free.” “We shift from ‘more’ to ‘enough’”
“When a job is the only way to get money, healthcare insurance and respect, having a job is crucial.” (Sad, huh.) Financial independence isn’t about rolling in $$, but about unhooking yourself from consumer culture + the assumption that you must buy your way through life
Joe D wanted to do “his service to the money economy” the way young men do military service – w integrity, yet for a limited amount of time. “There’s more to life than 9-to-5-till-you’re-65”. He ‘saw reality clearly & made dispassionate, wise choices based on a long, deep view.”
According to a 2005 study, people who’ve simplified their lives (?) are less materialistic, less status conscious, more interested in personal growth, friends, family, and participating in the life of their community.
When we’re not taking our identity from our jobs, we are identified as consumers. Shopping is considered recreation. We spend so much time earning in order to spend that we don’t have the time to examine our priorities. Our old financial roadmaps lead us to webs of dependencies.
(Story about a daughter asking her mother why she always cut off both ends of the ham before baking. Mum says its because grandma did it. They go to ask her why – and it’s because the pan was too small! Reveals the utility of questioning inherited habits and dogma.)
“We’ve joined the “real world”, the world of compromise. For all the hype about “going for the gold,” we’re so weary at the end of the day that going for the sofa is as good as it gets.”
“Our jobs have replaced family, neighbourhood, civic affairs, church and even mates as our primary allegiance, our primary source of love and site of self-expression.”
How do you feel when responding to “what do you do”? Do you feel pride? Shame? Do you want to say “I’m only a ___,” if you aren’t meeting your own expectations for yourself? Do you feel superior? Inferior? Defensive? Do you tell the truth? Do you give an exotic title to +status?
Work is stressful People are increasingly unhappy job satisfaction is down Money in the bank is down Debt is up We can’t afford to quit + in people living in cars or on streets We spend more than we make on more than we need.
If we could sincerely believe that our jobs were really making the world a better place, then we could sacrifice sleep and social lives without feeling deprived
Authors asked 1,000 seminar participants to rate themselves on a 5-point happiness scale 1- miserable 3- can’t complain 5- joyous Average score was consistently between 2.6 and 2.8 – regardless of whether the person’s income was under US$1,500/mo or over US$6,000/mo
Answer to “how much money would it take to make you happy” was always “more than I have now”, by 50-100%. (Selection bias, of course – why would people happy with their earnings attend a financial seminar?)
10-year study of 1,000 lottery winners (Roy Kaplan) – very few felt greater happiness or had any idea what to do with the money – many were less happy 6 months later, particularly if they left jobs that were a source of self-esteem – many felt isolated and even turned to drugs
“We are the most affluent society to walk the earth, and we do it with our noses stuck to the grindstone, our lives in a perpetual loop between home and work, our hearts yearning for something that’s just over the horizon” (One must imagine Sisyphus LOL-ing)
If this were just a private hell it would be tragedy enough – but there are environmental costs to all this consumption. We haven’t just borrowed from the bank – we’ve borrowed from future generations, and our planet
1958 – JK Galbraith described USA as “the affluent society” -9.5% of households had air conditioning -4% had dishwashers -<15% had >1 car 1980, Reagan ran and won on #MAGA, sense of economic suffering -5x aircon -8x dishwashers -3x >1 car People genuinely felt worse off
Assumptions about growth: – growth is good – solves poverty – increases standard of living – reduces unemployment – will keep up with inflation – relieve boredom of rich and misery of poor – will ‘bolster the GNP, boost the Dow, beat the Japanese’
“We don’t have to change because…” – technology will save us – government will save us – not my problem – reports are probably wrong – scientists are liars – journalists are liars – what can I do anyway – anyway I’m in debt, so sorry
“Money has become the movie screen on which our lives play out” (I’m reminded of a similar point from The Communist Manifesto) We project onto money the capacity to fulfil our fantasies, allay our fears, sooth our pains, send us soaring to new heights. Hope can be bought
Interesting to consider whether the phrase “citizen” has been replaced with “consumer”. Strange American moralizing, puritan/Protestant work ethic (idle hands do the work of the devil) tied up with industrialism and the fetishization of factory output and economic growth
Consider the phrase “disposable income” Consider the role and goals of the advertising industry “It’s easier to tell our therapist about our sex life than to tell our accountant about our finances” (Really? hm) More marriages are wrecked by money than any other factor
“Enough is the peak of the fulfillment curve (with its diminishing returns). Enough is a fearless place. A trusting place. And honest and self-observant place. Alertness, creativity, freedom.” Beyond enough lies clutter.
(This book has several great examples of internal monologue that are extremely realistic in their fragmented, flitting ways.)
A friend had a garage full of junk. If he cleaned out his garage, he’d have to admit that his house was too big for him+wife sans grown kids. Then he’d have to move. In moving he’d realize his marriage had died years ago but he was too scared to leave. So no cleaning the garage!
Meaningless activity can also be a form of clutter- power lunches, cocktail parties, social events, long evenings glued to the computer or TV… todo list items that never get done…
Step 1: Make peace with the past. (While it’s the first step, you don’t have to do it first.) A: find out how much money you’ve made in your lifetime B: find out your networth by making a balance sheet of assets and liabilities Inventory all your stuff and get a clear picture
It’s interesting to hear what an emotional process this is for people, to discover how much they’ve made, what they own, what they already have. Emotions of guilt and shame but also gratitude and appreciation. We typically bury these feelings to avoid dealing with them
4 perspectives of money 1. Street level: basic financial transactions – allowances, salaries, checking/savings accts, mortgages, deductibles, riders, premiums. Credit cards, retirement planning. Wills. Stocks and bonds.
2. Neighbourhood level: emotional/psychological realm. Are you impulsive? Curious? A worrier? Snob? Ostrich? Hopelessly helpless? Did your family consider itself rich, poor, average? Secure? Not? Was money discussed openly or was it impolite? Did you have an allowance? Do chores?
Money Coaching Institute’s archetypes: Innocent (ostrich) Victim (blame others) Warrior (hustler) Martyr (protect others, neglect self) Fool (gambler) Artist (starving variety) Tyrant (controlling) Magician (best of all worlds)
3. City level: cultural realm. 4,000 yo history. Assumptions like growth=good. “We take indicators like GDP personally. We feel poorer when economists tell us the cost of living is up, though past luxuries are now included in the consumer price index.”) Federal Reserve priests
“Our Lady of Perpetual Growth hasn’t brought us the security and happiness we trusted would be ours for believing in her.”
“A and B were different psychologically, but both children of ‘more is better’ America. A complied and B rebelled. But neither was freely choosing a mature relationship with money. If asked, neither of them would’ve acknowledged they were living out their cultural programming.”
4. aerial drone view: personal responsibility. You are not a prisoner of the city – the known and familiar. You may have been born here but you stayed by choice. Money is something we choose to trade our life energy for. Time and resources and psychological-emotional bandwidth.
John Stuart Mill: “Men do not desire to be rich, only to be richer than other men.” As soon as rich becomes available to the likes of us, it will no longer be rich.
FI = freedom from unconsciously held assumptions about money – guilt, resentment, envy, frustration, despair. You can have these feelings but are free at any time to take them off. Clothes, not tattoos. Money doesn’t happen to you; you include it in your life purposefully
Spending money can be a way to respond to feelings of resentment and powerlessness. Stopping the spend can mean confronting how much you hate your life, and consequently how much you hate yourself. This is a psychologically painful process for many