Bundle of Chinese Coins

Remember What Money is For

Bundle of Chinese Coins
Bundle of Chinese Coins, by Alexander Stein

Dear Son,

People get so wound up and confused about money that it is easy to forget what it is and why it is important.  Young men in particular, can get hung up worrying about money, wanting money, or just trying to figure out what money is about that it becomes a point of obsession.

If you have a healthy understanding and perspective on money, you will be much happier, and far healthier in life.

Money is human energy in crystallized form.  Every coin, bill, and electronic bit is a promise for time, attention and labor.  When you work a job, your employer or client is getting the fruits of your labor (or “the sweat of your brow” as your great-grandfather’s generation would call it), and in return you get money.  The money is a symbol that represents the time, energy and freedom that you have sacrificed for that person.

That money can come from almost any kind of labour, as long as the other person values it.  Usually the harder, more intense, or more dangerous the work, the more another person is willing to give for it – and the more a wise man demands for it, too.  After all, why would someone be willing to work cold and alone miles away from fresh food and a hospital on an oil derrick unless the rewards they received were bigger than the ones they got for walking dogs in the park?

The same is true for work that requires specialized skills.  If not many other people can do something, the person who can can ask more money.  After all, they are’t just paying for your time, but for your knowledge, expertise, and experience, too.

Once you have money, you can trade it for another person’s time; either in work or in the products they have created with their work.  That way you can get things that require skills you don’t have, or time and risks that you don’t wan to take.  Whether that is a chair, a computer, a cup of coffee, or even a helpful conversation.

Without money, a man has to have many skills just to survive.  Imagine if you (and maybe a wife and children) had to hunt or raise your own meat, grow all your own vegetables, cut your own wood, build your own house, weave your own fabric to sew your own clothes, dig and forge your own metal, catch and domesticate your own animals… People have done it for centuries, but it is a hard life, and one where you don’t have much time for creativity, invention, or learning.

With money, we are free to get a lot more out of our labors.  In a way it doesn’t just crystallize our energy, it amplifies it.  Because a good leader who is willing to put some money down can start a business and pay many different people for their skills to create something that even more people will find valuable:  computers, drones, medicine, movies, music… they are all only possible when money lets many people work together wisely… and only possible when some people are willing to specialize in skills, and others are willing to take the risk of investing.

But Why?

All of this might seem pretty self-evident, but people get hung up.  They see other people having more money then they do and start asking themselves “Why does he get more money than me?  He isn’t a better person!”  And that has led to a lot of evils in this world.

The reason a person earns a lot of money is because they have made good choices:  they found skills that other people want, and sold them well.  They have demanded a lot for their labor, and made sure they were trustworthy, honest, and of a character that made others want to pay it.  Or they have been the few brave people to measure the risks and rewards of dangerous investments and won big because of it.

When people talk about money and “fairness”, they forget that money is earned.   They want money without having to learn the skills or doing the kind of labor people want.  They demand that the people who earn the most be taxed, and that the money be given to people who “need it more” (a.k.a. themselves).  These people don;t think of themselves as thieves, and often believe that their motives are pure, or at least more complicated than demanding that the government forcibly take someone else’s money, but 90% of that rhetoric is smoke and mirrors meant to let them make their demands without feeling like a bad person.

That’s not to say every rich man made every penny through honest dealings or being a shining example of humanity.  There are plenty of bastards and sociopaths at the top income bracket, but generally speaking, no one stays rich unless they offer something that makes people happy.

Watch out for talk about “fair shares”, “corporate greed”, and “social responsibility”, sometimes these are very reasonable ideas from very reasonable people, but often they are clues that people have some very hokey ideas about money, and very few scruples about stealing it, hidden under a mask of fancy rhetoric.

I do believe as a culture, that we ought to give people the opportunity to develop excellent skills and sell them so that they get paid what they deserve.  I also see the wisdom in helping the impoverished among us develop new skills to lift themselves up.  But every program we create to help them ought to be voluntary, driven by people who actually want to help because they see it as being in their own best interest,  and be careful that they are a hand up, and not a crutch for the people they help.

When you feel jealousy at what others have, take a moment, and first remember that all a man needs is a few good things, and then change the way you frame the question.  Rather than “Why does he have more money than me?” Ask yourself, “What is he doing that I could do, too, so that I can make that kind of money?”  And if you have the moxie, ask him.

The Real Truth About Money

Why would we want to create something that lets us crystallize and multiply our time?  Because we can do so much more and be so much happier if we can spend some of that time on other things.  One of the three great philosophers who shaped our culture in its earliest days was Aristotle.  And in his great book The Nichomachean Ethics (or just Ethics), Aristotle talked about what he believed was the best way to spend one’s life.

What he saw was that when people had time for leisure, it made living in that community a better place.  Men with time on their hands could stop working, and find smarter, easier ways to work.  They could stop worrying about problems and put their heads together to solve them.  Rather than rest on what they know, Men with free time want to learn new things.  Men with enough time on their hands also made beautiful communities filled with art, music, drama, and stories.  When you give a man unstructured time, he uses it to explore his inner world, and them make the world around him more like it.

And so Aristotle came up with the notion of the good life:  for a civilization to be good, the people in it needed time for leisure.  If a person had a good living using the skills he was most gifted in, he could raise those skills higher.  If he had a supportive community, he would push to make it a better one with some of his free time.  And if all men had the time to educate themselves, then we would invent better and better ways to live and work.

Download: The Nichomachean Ethics

And so Western Civilization set out with his ideas in mind, and thanks in part to his vision of the good life, we have created cultures that give unparalleled freedom, time, and creativity.  It is also why we have created elaborate systems of business, money, and finance as well – because money more than anything else, buys us the time for creativity and invention.

Aristotle Quote
Aristotle Quote

And there lies the truth – we work to make money so that we can provide for ourselves and our loved ones, and then with the rest buy time for the things that really matter:

  • Creativity
  • Inventing
  • Learning
  • Art
  • Playing
  • Lovemaking
  • Community Building
  • Volunteering
  • Starting Businesses
  • Raising Happy Children

Once you have enough to live, money only matters so far is allows you to have the experiences and create the things that bring you joy, so that at the end of your life, you can look back and know that you lived it well.

I have know men who made very little money, but because they had a joyous spirit and remembered that what is really important, were truly wealthy in the most important sense.  I have also known men who make a quarter-million dollars a year, but who paid the price in 80-hour work weeks, stress-related illness, and feeling like a stranger in their own home with wives who no longer loved them and children who barely knew them.  For those latter man, they had money, but they were not wealthy, and their expensive lifestyle, beautiful homes, and fancy cars owned them, not the other way around.

My Money Tips

Son, I am no financial genius.  I can’t tell you how to become rich, but I can tell you about the the way to approach money that will bring you the most happiness:

  • Learn a skill that is in high demand or special knowledge that other people need.
  • Try running a small business when you are young, and see how it changes your relationship to money.
  • Always try to put some money away for an emergency.
  • Debt is slavery and a slow poison – for some things – a house, a car, furniture, etc. it is a necessary evil, but for the rest, spend only what you have.
  • A fancy and expensive lifestyle won’t make you happy: happiness comes from within, and is inspired by time spent with other people.  Live within your means, so that you can enjoy them.
  • An adventure is a far better investment than most things will ever be,
  • Never undercharge for your skills – demand to be paid what you are worth!
  • The best retirement plan are people who love you.  Pensions, stock markets, even whole economies come and go, but a home, friends, loving family – these are the things that will shelter you and are for you in your old age.
  • Character is an income amplifier – if you are social, warm, open, and trustworthy, people will prefer to do business to you than the cheaper guy who is miserable, or the more skilled guy who is condescending.
  • Marriage is the best wealth amplifier of them all:  not only do you and your wife share the burdens of earning a living and supporting a home, but it provides you with the love, companionship, and inspiration that makes the good life possible.

Son, I may not have a lot of riches, but the success stories of my clients, the happiness I help other people achieve, the love of your mother, the family that cares for me, and the love I have you make me a very wealthy man indeed.

Humbly,

Dad

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