Wednesday, February 14, 2007

Using Your Money

What's the purpose of making and having money? Obvious to some is that we need it to exchange for other goods and services that allow us to eat, have shelter and clothing. If we were satisfied with that, life would be pretty simple. We could live like the happiest people on earth. Vanuata's economy ranks at the bottom of the survey yet the people live within their means and don't seem to yearn for "more" in the way that we do. Perhaps it is their climate or isolation from the rest of the world (no one to tell them they need an Ipod, BMW or a new home).

Now this "story" was concocted by environmentalists with an agenda to show that people that don't disturb the environment are "happier", so we should all live like them. I'm not sure of the validity of this "survey, but one thing that we can learn from these people is that living within your means can reduce your stress. However, I tend to think that the people of Vanuata are the exception rather than the example of what we as humans really are.

My own view is that we were made in the image of our Creator and hence we are driven to be "creators". This means we are constantly on the hunt to find some way to make our lives better. Imagine that 10 people lived on a island and the only source of food was fish. So each day we go out to sea with our fishing line and hook, catch what we need to eat for the day and sail home to eat. Our days are consumed by working to find food and eating it. This goes on until some creative person gets the idea to weave a net. The next day he catches enough fish to feed all 10 islanders. So, now the other 9 no longer need to fish. So what do the other 9 people do?(Would they all complain about the unfair competition of the person with the net and ask the government to pass a law forbidding use of nets?) Actually, some will figure out how to make clothing, others will learn how to plant vegetables, and one will make some drums to entertain the others. Pretty soon they will barter their goods/services so they can all live a higher standard of living. And so it has gone until our present day when we use money rather than barter. Each of us contributes to improving the standard of living for others and in exchange we receive money we can trade for goods and services we want.

The point of my story is really to illustrate the absurdity of the survey of "happy" people. People are happiest when they can pursue what they want and have the freedom to use the efforts of their work to attain the things that bring them the most joy. Now, for many people, buying things doesn't necessarily bring them joy because they don't know what they really want. But this is not because their environmental footprint is too high.

Liz Strauss wrote a very insightful post on spending money. The main point of the post is that we should spend our money when spending it will give a greater return than not spending it. Money is meant to be used. Stuffing it under your mattress may give you some satisfaction but it is not satisfying and may be morally wrong.

So use your money to invest or buy things that will return a greater value to you. Don't buy on impulse to satisfy some emotional need, but use your rational mind to give yourself the best return on your investment. You work to create your money and you need to make the optimum use of it.

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