I’ve been thinking about money lately. I’ll start by saying that we’re not poor — we have a safe place to stay, plenty of food, and health insurance. But we’re not rich, either, by most definitions. We have to be careful about what we spend, and although we have everything we need, we can’t afford everything we want.
There is a lot that gets pulled into the discussion when we talk about money, most of it emotional. I can get jealous, frustrated, proud, and embarrassed when I think about my financial life — all in just a few minutes.
There are elements of my situation that are out of my control — where I was born, the choices my parents made, the economic status of our country and our world — and other elements that are fully my responsibility. I decide where and how to spend my time and the money that I have.
I recently shared some personal information about my financial situation with people that I trusted, and three things happened: I received some unsolicited judgment about some of my investment choices, I got angry and felt demeaned, and I learned that for some reason, in this part of my life in particular, I am particularly sensitive to criticism. Part of this sensitivity is due to my own choices — I was successful at a young age in business, but I decided more than 30 years ago to become a pastor. I knew that this was also a choice to leave the business world and earn much less money. I remember talking to a friend from my childhood church who had left a big law practice to enter the ministry. He told me, “There is a big trade off. It’s a good life, but the decrease in income is really significant.” This trade off was even more severe than I anticipated. I earned so little that I struggled to make ends meet, and I eventually found a way to shift my ministry to make more money as a psychologist. My friends in the business world, meanwhile, became wildly successful.
I’ve done my best to keep up, but from a severe handicap. My risk profile changed. Because I didn’t have as much, losing money had a greater impact on our day to day life, and so became more painful. I developed a longer term, value investing strategy. I learned Warren Buffett’s two rules for investing: 1. Never lose money. 2. Don’t forget rule number one. This isn’t as easy as it sounds in a world of fluctuating markets and short-term stock price targets.
Practically, what this means is that I don’t take on the risk associated with choosing individual, high-flying stocks. You won’t hear me bragging about my “big winners,” because for the most part, there aren’t any. I believe that it is too risky for me to try to beat the market, so I don’t even try anymore. My investment strategy is boring. I buy a diversified group of index funds, and I let them ride.
This decision has other consequences. I get criticism from others who think I am missing out, or more derisively, being stupid. I also isolate myself from all those exciting and entertaining discussions about the next big thing, or the great trade that just made a bunch of money, or how bitcoin is the future. I often feel like an outsider.
I learned Warren Buffett’s two rules for investing: 1. Never lose money. 2. Don’t forget rule number one.
The people who participate in those conversations generally are in a different financial position than me — they can afford to take bigger risks, and they generally have incomes that can insulate them from any potential losses. I also notice that their talk revolves around their winners. I don’t hear as much about any money that they have lost.
I’ve had some psychology patients who had problems that involved money, and almost always, I try to guide our discussions to talk about meaning. Most people haven’t thought about it in this way. They have turned money into a metaphor for something else — happiness, maybe, or security. Often, we find that it isn’t a good substitute. They are disappointed to find that more money doesn’t make them happier, or that it comes with complications — how it should be spent, how to protect it, and even moral questions about where it comes from. It also doesn’t buy them the things they really want, like health or love or purpose.
Another issue that comes up occasionally is when someone experiences their value as a person as related to their wealth. This has come up a couple times when someone has lost a great deal of money, and feels that their life is over. The harm that they feel comes in the form of lost relationships or social status, and our discussions focus on more fundamental aspects of life — those people whom they love, sights that bring them moments of awe, and work that gives them purpose. I need to remember these things when I am judged by someone about my financial choices and I begin to feel insecure or angry or resentful. There is much more to life than my bank balance, and I am grateful for all of life, not just money.
Most of us want similar things. We want our children to have better lives. We want strong, loving relationships. We want safety and security. We want to make a difference. There are some ways that money can make a difference. It can alleviate suffering, for example, or create opportunities. This happens usually when money is transferred from someone who has a lot to someone who has very little. Those who are the beneficiaries of generosity can have their lives changed in radical ways. I’m thinking now of people who haven’t previously had clean water or food, or those who had fistulas or cleft palates repaired.
Some folks may criticize me for this or conclude that I am a poor money manager, but every year Fruitful Detours makes some charitable donations. I’m not going to get any buildings named after me, but I feel good about helping others, and it’s one way to make a difference.
There are a lot of organizations that do really great work. You can help me decide where to give by nominating a charity in the comments.
The winner(s) will be announced in a future post.
