Media mogul and CNN founder Ted Turner once said that “life is a game; money is how we keep score”.
I don’t necessarily disagree with Mr. Turner because his comment highlights a fundamental outlook that most people have about life, at least subconsciously. However, I posit that most people let money control them rather than the other way around.
I present 15 facts about life and money that adds some perspective to Mr. Turner’s statement.
1. Things are worth exactly what someone is willing to pay for them.
Every time a Pokémon card goes for $460k or Tom Brady’s “last touchdown” ball goes for $500k, this fact is validated.
2. Anything in life worth having never comes easily or cheaply.
This fact applies to anything.
3. Money is not the root of all evil; most evil deeds are motivated out of need or greed.
The Merva-Fowles Study validates this fact.
4. People are paid in exact proportion to the value they provide, whether the value provided is real or perceived.
Credit to Earl Nightingale for this bit of factual wisdom. The successful person never stops improving themselves. Wages are stagnant because most people are stagnant.
5. “Rich” is a relative term. Most rich people don’t realize that they are rich.
You don’t have to be a millionaire to be rich. If you have enough income or wealth to meet your basic needs many times over, then you are rich.
6. The miser is no better off than the person living paycheck to paycheck.
Whether you hoard money or let it run through your fingers, you are letting money control your actions rather you controlling the money. It is quite possible to save and invest while living comfortably. Being miserly or feckless with money prevents you from truly enjoying life. Plan wisely for the things and experiences you want in life.
7. Money DOES buy happiness!
However, the happiness is in the short-term. We all have a hedonic set point, the equilibrium between being happy and being sad or despondent, that we return to after experiencing the highs and lows that life brings.
Money will solve just about every problem a poor person has and bring about euphoric, short-term happiness. However, once the problems a lack of money brings is solved, one has to deal with the problems money can’t solve. This is when internal happiness and fortitude are required.
8. The Joneses don’t know or care that you are trying to keep up with them.
Personal debt is mostly driven by personal consumerism. I add that the Joneses are also trying to keep up with their neighbors and friends, so you will never catch them.
9. Money enhances both qualities and flaws.
Just look up what happens to most lottery winners and professional athletes who come into sudden wealth.
10. Money creates as many problems as it solves.
So make sure you focus on being a person of value and seek happiness from within.
11. The most important debt you owe is the debt you owe to yourself, so pay yourself first.
People who save and invest will never have to live paycheck to paycheck even during economic downturns or inflationary spikes.
12. Home mortgages and car notes are not the same as consumer debt.
I’m talking buying rather renting or leasing, which only makes the people to whom you are paying rent or lease payments to richer. We all need a roof over our heads and a means of transportation and buying both creates value in the long-term. Even a car that depreciates upon purchase is an asset worth buying rather than leasing
13. Financial literacy = Freedom
Financial literacy, both personal/micro and macro should be taught in school. However, you should learn it yourself and start seeing money and the world for what it is.
14. Most people don’t realize that the Industrial Age is over and it’s not coming back.
Never stop improving your education and skills. Factory jobs are scarce because labor is cheaper overseas. We all have to evolve and adapt to ever-changing times.
15. You can’t take money with you when die, so fully enjoy the fruits of your labors while you are here.
-The Rational Ram