[Editor's Note: Today's WCI Network post is from Physician on FIRE. PoF and I both feel strongly about being good stewards over financial resources. Being a good steward begins with getting a good financial education then grows past simply wanting to buy more “stuff” to carefully thinking and planning to use money as a tool to bring happiness for yourself and others. I loved this post when it was first written and I'm proud to share it with you here.]
I have a difficult time understanding the level of apathy that so many people have towards money. Apathy may not be the best word.
People do seem to care about money and they certainly want more, but I don’t see a lot of people making the wise and sometimes difficult choices that will help them actually grow their money and achieve financial independence.
My wife and I were talking about this very thing. I was talking about people wasting money in pointless ways and she said “a lot of people just don’t care about money.” I guess not, but how could they not? Without thinking, I blurted out “But that makes no sense to me, because money is everything.”
Money is Everything
I realized what I had said and how it sounded, and I backpedaled a bit. I wasn’t about to launch into a Gordon Gekko style “Greed is Good” speech, but I had a legitimate point.
What I meant to say was that Money is Anything.
Money can become so many things.
- More free time.
- Your children’s education.
- Dinner at a five-star restaurant.
- A life-saving AED for your church or community center.
- Super Bowl tickets
- A well for clean water in a third world country.
- Retiring someday.
- An around-the-world cruise.
- Food and medicines for a no-kill animal shelter.
- A neeeeeewwww car! A neeeewww house!!!
Money is whatever you want it to be.
Who doesn’t care about a single one of those things listed above? Not anyone that I know. But if I don’t know you and if you literally care about none of the above, I’m sure you can come up with a list of things you truly do care about on your own. I promise you there will be things on your list that money can buy. Because Money is Everything.
You Should Care About Money
Money is a taboo topic in many circles; most people don’t like to talk about money. I’m not like most people in that regard. At home, we openly discuss money matters. I want our boys to grow up to be smart with money, and avoiding the topic is not going to get the job done.
There are many reasons I want my boys to care about money, and why I think you should care about money, too. There is the fact above — that money can be exchanged directly for many things that can improve your life, the lives of your loved ones, and of those thousands of miles away. But there’s more to it than that.
The fact is, there are lots of people that actually do care about money out there, and are intent on getting more. Some do noble work or start useful businesses that serve their communities.
Others get more money the easy way — by taking it from those who don’t seem to care that much about money. You don’t want to be on the giving end of a transaction like that, do you?
How can you avoid being among the taken? It starts by caring about money. Not because you’re greedy, but because you care about things other than money, and you understand that those things can be made possible or made better if you become a stronger steward of the money you’ve earned.
When you care about money, and you grow your income and savings rate, you’re more likely to develop a surplus of money. When you have a surplus, you have little need to be greedy, and you can afford to be more charitable without damaging your ability to live the life you want to live.
Without a surplus of money, it’s hard not to be at least a little bit greedy with money. You have to put on your own oxygen mask before assisting others. Caring about money isn’t greedy. In fact, it’s quite the opposite. Caring about money will eventually put you in a position to be less greedy with it.
How to Care About Money
In order to care about money, you must first understand it better. A basic education in personal finance is a must if you care at all about money, and I’ll share some pointers on how to get educated in money matters below.
You must also understand how money enters your life and how it leaves.
Money generally comes to you via earned income from your main job, a side gig, and the returns from your investments. You may receive money in the form of gifts from living friends and family or as an inheritance from the no-longer-living.
Money exits your life in so many ways, and if you’re going to care about money, you really need to get a handle on them.
Taxes are the number one money drain for many high-income professionals. With our progressive tax system, you’ll pay your fair share, but do what you can within the law to avoid unnecessary overpayments. Tax-efficient investing and tax-deferred retirement contributions are two such examples.
Spending is the other primary money thief. Some is necessary, a lot is not, and if you care about money, you’ll monitor your spending. You can track it closely with Mint.com or PersonalCapital.com, track it loosely by using one good rewards credit card and a checking account, or work with a strict budget if you must.
Once you have a grasp on the ways money comes and goes, and the quantity of the flows, you’ll have an idea of your savings rate (calculate yours here). I challenge people to create a wide gap between the two, asking that they aim to live on half their takehome pay.
Finally, know how much money you have. Track your net worth (sum of assets minus liabilities) and aim to grow it. Have goals. Financial Independence is a great one, and there are many steps you can celebrate along the way.
How to Talk About Money
When you care about money and the good things it can bring you, your family, and the human race, you’ll want to talk about money.
Money talk starts at home.
Talk with your partner about money. Have a monthly family budget meeting. Review your net worth from time to time. Calculate how long it will take to pay off your debts and see what you can do to become debt free more quickly.
Talk about your money goals together. Decide to consult with one another for all purchases over a set dollar amount, like $100. If you’re single, write your goals down or talk about them with a confidant. Delay big purchases for 24 or 48 hours. Maybe a week. Make sure that expenditure is in harmony with your goals.
If you’ve got kids, be honest about the cost of things — not only the toys they play with, but the disposable batteries that power those toys, the electricity that keeps the lights on and the heating, cooling, and utility bills you pay to live a comfortable life.
I don’t think there’s an age too young to introduce the concept of money to your children. Your children will need to learn about money, because money is everything.
How to Learn About Money
There are several books that will pay for themselves a thousand times over. If I could pick three that I’ve read, I’d go with The Millionaire Next Door, How to Think About Money, and The White Coat Investor (for physicians) or The Only Investment Guide You’ll Ever Need (for everyone else). For further reading and resources, see my extensive recommended list.
I do my best on this site to educate people on all aspects of personal finance with a focus on the high-income professional. A few posts to get you started would be:
- 20 Steps to Effective DIY Investing
- Investing Basics for Physicians With Little Time or Experience, Part I
- Investing Basics for Physicians With Little Time or Experience, Part II
You’ll find tons of other great material online if you know where to look. For example,
- The White Coat Investor has an excellent Start Here page.
- Bogleheads has a wonderful wiki and forum.
- Rockstar Finance aggregates top blog posts five days a week.
- Passive Income MD (a WCI Network partner) is great for real estate and other passive income sources.
- See my blogroll for many, many more blogs and a number of great podcasts.
As previously mentioned, be sure to learn about how you personally spend your money. You may be surprised by what you uncover when you track every dollar that exits your wallet, checkbook, credit card, and bank accounts if you’ve never closely tracked it before.
There are many ways to learn about money. Whether you learn best from books, audio, video, or in-person conferences, there’s a medium for you.
Is Money Everything?
“I don’t care too much for money. Money can’t buy me love.” The Beatles
OK, money isn’t absolutely everything. Money can’t buy me (or you) love. Nor can it buy friendship (at least not the true love or true friends you’d want to have).
Money isn’t the cry of a newborn baby or a walk through the woods on a crisp fall afternoon. Money is not the sun rising in the east, setting in the west, or being eaten by the moon in a rare eclipse.
Money is, however, a great facilitator, and having money to spend, give, or save will not only improve your own life, but money can make life better for the people and things that surround you.
To quote Farnoosh Torabi from her talk at FinCon17, “The desire to make more money should not be your goal; it should be your obligation. It should be your responsibility.”
If you choose not to care about money, you’re choosing not to care about some of the most important things in this world. Money may not be everything, but money can improve, enhance, or become almost anything.
If you care about yourself, your partner, your neighbors, your children’s future, and the world in which you live, it’s time you start caring more about money.
How much do you care about money? Do you agree with the premise that money can be almost anything? Am I greedy to feel this way?