“I’m tired of hearing about money, money, money, money, money. I just want to play the game, drink Pepsi, wear Reebok.”Shaquille O’Neal
Okay, look. I’m usually able to keep a cool head, but I will admit, I’m slightly disappointed. This matter has been sitting heavy with me. In everybody’s interest, I will do my best to keep this from becoming a rant, but I make no promises.
Sound good? Good.
Here’s the thing, we’re taught from a young age that we only have so much money and with time, you could have more. We’re taught that when we grow up, we’re going to be working jobs where we will be exchanging our time for money. Then, when you finally get your paycheque, you should be careful about how you use it. We’re taught that money is scarce and time is plentiful.
Here’s the reality, money is worthless. It is what money can provide to us that we truly care about.
We only have so much time on Earth and the amount of money one could earn is, in theory, endless. If this is the case, shouldn’t we be focusing on our scarce commodity, time, and how we want to spend it?
I think the best way to express what I’m trying to say is through an example. I want you to meet the three friends Ron, Hermione, and Harry (I’m doubtful you’ve heard of these people). They each inherited $1 million from a former mentor when they passed away. Their mentor felt that they had promising futures and wanted to give them a head start. Three different people; three different mindsets.
Ron took his money and decided that he wanted to quit his job and live a lifestyle that he was never able to have while working after graduating school. Ron quit, purchased a brand new sports car, moved into a new house, bought new clothes, and continuously went out with friends. It wasn’t long, but after the first two years, Ron spent nearly three-quarters of the money that was left for him. You don’t have to be a math genius to know that his lifestyle will be difficult to maintain as funds continue to be spent on short term comfort.
Hermione read lots and learned that she needed to save for retirement. She already was working at a job that she felt was good enough to fulfill her expenses, so there was no immediate need for the inheritance. Hermione took her share of the money and decided to place it into an investment that was historically going to earn about 10% per year. She was excited about so many things that she wanted to do in retirement like travel, going back to school, and reading. She doesn’t have the time to do all of this as work takes a lot of her time but has decided that she is going to try to retire as early as possible once she has enough money. After two years, she has seen her money grow and is becoming even more excited to finally do what she loves in retirement.
A smart decision she made, right?
Is there something better she could have done with that money?
Let’s take a quick look at Harry. Once Harry received his share, he decided, like Ron, to quit his job. Harry felt it wasn’t fulfilling his purpose, but he still didn’t know exactly what that was. Unlike Ron, Harry didn’t spend his money on short term comfort. Harry used his downtime to learn more about himself and felt the best way to do this was by traveling the world, enrolling in fitness classes, and reading books that interested him. It took Harry almost a year to find some of his true passions. Through this development, he chose to use some of his inheritance money to start his own business that he felt was in line with who he is. After two years, he was left with half of his inheritance money, but by turning his passions into a purpose to serve others, he hopes to create years of income while serving what he feels is a greater cause.
When looking at Ron’s spending habits, it’s common to see that we can have the temptation to choose short-term purchases for momentary comfort, but somehow forget the long-term cost when it comes to finding a better connection with ourselves. Does that mean we shouldn’t spend on short term purchases?
When comparing Ron and Hermione, you might feel as though Hermione made the best decision by saving for a future goal rather than blowing it all. Reality is, saving for the future is great! What we see is her money has grown over the past two years, but, like Ron, hasn’t personally developed.
Seeing the differences between Hermione and Harry is where we begin to see who is on a path to true wealth. Now, Hermione decided to use the money to fund her security of retirement which is not wrong, but could she have used that money differently?
Could Hermione still do what she loves before retirement?
There is a distinct difference being that Hermione was finding security through external measures while Harry was finding security through internal growth. Though after two years, we can see that Harry has less money than Hermione, he is beginning to find something fulfilling and quite possibly more valuable than a 10% annual return. If we pretend for just a second that the value of a dollar went right down to zero, Hermione’s investments would be worthless, while Harry would still be able to find a purpose for his passions. Sure, this may sound like a lot of “fluff”, but the reality is it’s true if we take a few moments to really think about it.
Now, I already know you’re thinking about how not being able to spend like Ron will take all the “fun out of life”. Ask yourself, are you truly receiving pleasure or are you experiencing a short, quick high followed by a low because you’re looking at external things for happiness?
Money is simply a tool as a means to fulfill what we care about. It’s time to honour yourself and your true value with the decisions you make.
Today is the youngest you’ll ever be, so it’s entirely in your hands what you decide to do with it. What would you change today if you could?
Josue Dubon, QAFP, B.Comm (Hons)