Just another celebrity with a high-consumption lifestyle.

Recently everything he’s touched turns to dross.

He can’t even manage to make money with a casino!

And the Amish are free riders on modern society, as a recent WSJ article notes.

Happy to take advantage of high-tech healthcare, but slow or no pay.

Peter Schiff: Oh, he saw it coming

http://money.cnn.com/2009/01/20/magazines/fortune/okeefe_schiff.fortune/index.htm?postversion=2009012310

I think the desire for what we don’t have is a human desire on the most basic level. After all, we would not have moved beyond living in caves and mud huts if we didn’t have an instinctual desire for more.

I think in the modern marketing driven world, it makes it very difficult to realize what amount of betterment we “need” or is healthy and at what point our desire for more, bigger, better, newer is counter-productive or even destructive – of the environment, or what have you.

There’s a reason that pride and vanity are considered sinful in many religions, I think it’s because it can lead to a lack of compassion for your fellow man, but also because it is universal. Rules are made because populations are engaging in a destructive behavior, they don’t come out of a vacuum.

Summary: It’s all about balance. The middle road if you will. It is not natural to be completely hedonistic nor completely “puritan” (i hate that word actually).

I have all these brilliant, witty (and undoubtedly 100% correct comments) to send back to you, but we’re leaving for the evening and I won’t be back till really late. I did want to say that I’ve really enjoyed our dialogue. I’m usually pretty quiet around here. Not only did you draw me out, but it has been both thought-provoking and fun.

Okay… One last comment.

You said: “Although, if a significant culture shift took place such that minimalism was considered impressive, maybe that would change. I don’t know how that would happen or what might trigger it, though.”

On a small scale, this does appear to be happening because of the current economic situation in the US. I’ve long believed it needed to happen (surprise, surprise) and it will be really interesting to see how it pans out long term.

And some people do in fact have far more puritanical ideals than others. Obviously Warren Buffet does. He has the capability to live however he likes, but chooses to live fairly modestly. He’s probably fulfilling his ideals quite well.

But still, I think it’s a part of human nature, more prevalent in some people than others, to want to look impressive, and that does drive society as a whole in the “magnifico” direction.

Although, if a significant culture shift took place such that minimalism was considered impressive, maybe that would change. I don’t know how that would happen or what might trigger it, though.

I think that certain pursuits in the “magnifico” direction, aren’t necessarily bad, though. For instance, if we could build fully-recyclable cars, and fuel them with clean, renewable energy, what’s the harm in providing everyone with a big SUV? Certainly that’s an oversimplification, but if we’re able to follow our pursuit of “big and shiny” in a responsible way (which, historically, we haven’t been good at), then it’s not necessarily something to avoid.

And I hear you on the credit issue, but I don’t think it’s entirely true. The economy is able to support itself. It doesn’t really matter if an individual’s income is high enough to afford an expensive SUV, what matters is that means of production are efficient enough that everyone can have one and it doesn’t result in anyone else starving to death from lack of resources. Whether the work done to pay for the car is done before or after the car is purchased isn’t really relevant, as we’ve demonstrated that we have the capability to provide the whole world with cars and still be able to grow food to feed them all at the same time. If our companies can afford to give cars away to people who haven’t paid for them and just hope that they mostly pay for them eventually, it only goes to strengthen the argument that we have quite efficient means of production.

And as far as I’ve seen in my travels around the world, people in other countries certainly work for more just like we do in the U.S. In India I saw successful engineers living in modern apartments with security guards and gardens — things that many of their neighbors didn’t have. The well-off drove brand new cars, instead of old motorbikes. In Mexico I saw the wealthy retreat to from Mexico City to Cancun to vacation with American tourists. In Germany I saw successful businessmen driving around in BMW 7-series sedans.

Certainly the McMansion is particularly popular in the U.S., but every culture that I’ve seen has it’s rich and powerful with their own indulgences.

Ya know…

Since we cross posted each other and I’ve now read your latest response, I don’t necessarily disagree with what you are trying to say. The moment you switch ‘bright and shiney lifestyle’ for ‘ideals’ we are probably talking about the same thing.

We just (possibly) have different ideals.

Of course, differences in ideals has caused a good lot of the conflict we’ve got going in the US already.

And I suppose I’d add that while money/wants/etc. are becoming more readily available, I believe that there is/will be a price to pay for them. There is always opposition, always positive and negative consequences. That opposition may not be a car vs. a computer. It may not be clean water vs. a car. But it will be something.

When I look around at the community I live in, I have to agree with you. Bigger, shinier, better is the rule of unacknowledged law in the US. My siblings who live overseas tell me that this is one of the reasons that Europe (at least) looks down their nose at us. My guess is that this is a cultural problem in the US, not a universal one of humanity.

I do disagree with you on two other points.

While advancing technology and standard of living are partially responsible for the movement of US culture toward Magnificos, I would argue that the greater influence is credit. If everyone in my community was forced to live on what they actually earn, almost no one could afford to live here, and the huge advances in technology would disappear, because no one could afford them.

Second, I disagree that those who chose to be Puritans are just lying to themselves.

I am a puritan. And while my life is complex and exceptionally wealthy compared to most of the world (having lived overseas, this is part of the reason I believe in living a more puritan lifestyle), I chose to keep it as simple as possible within the boundaries of functioning as a citizen of my community. Why do I do this? It isn’t about ego or even really money itself. For my husband and myself it is because we find joy in self-sufficiency. We like to do things ourselves, and we think it is one of the most important traits we can pass on to our kids.

Neither is it about ‘sounding like Ghandi.’ It *is* about humility. Not humility for humility’s sake or humility for self-glorification. But humility because of my personal understanding of where I stand in the world. I am not Amish or an African Farmer. That is not the world I belong to. I am responsible for how I live / consume / behave.

You can tell me that if I suddenly had $50 Mil in the bank that there would be changes in my life and you are probably right. But those changes would not include becoming shinier-flashier. Instead they would be based around creating an even more fulfilling, more self-sufficient life than we are able to on our current income.

But, if you didn’t need to make the choice, and you could choose time, freedom *and* the mini cooper, you’d have all three. Your ideal, and the ideal of pretty much every other American (and citizens of every other country, for that matter), is one in which they can have all the things they want, including free time, and not have to compromise other things by sacrificing one desire for another.

An “ideal” as I’m using it in this post, is a collection of all our needs, and all our wants, such that you don’t have to sacrifice *any* of them. There is no compromise — that’s what makes it ideal.

The question originally posed today was “Which America?” I don’t think the possible answers to this question are just “Buffet’s America” or “Trump’s America”. Those may be anchors at each end of the spectrum, but where I think America will really go is towards our ideals. J.D.’s includes time, freedom, and a mini cooper. Mine includes sailing. Everyone has different ideals, but each need or want that makes up our ideal is shared by many people. Many other people besides J.D. and I want time, freedom, a mini cooper, or a sailboat. And many of those people will work towards making each of those more attainable for everyone who shares that ideal. As each goal becomes easier to attain, we no longer have to make as many compromises. We can sacrifice less, and be closer to our ideals.

America is a country which, despite its flaws, has steadily moved towards these ideals over the course of its history. This is not a uniquely American phenomenon, but an attribute of the human race. Almost all nations have moved forwards towards the ideals of their citizens over time.

There’s a measurement called the Human Development Index that is used to rate countries’ development. The criteria it uses are life expectancy, literacy, educational attainment, and GDP per capita. These are all very basic goals (certainly more basic that a mini cooper or a sailboat). Some countries do better than others right now, but the interesting thing to note is that if you look at America now, and America 100 years ago, we’d score better now. So would China, or India, or the UK or Mexico, or probably nearly everywhere.

The world continues to improve. More and more people are meeting their basic goals, and the fortunate among us, including most Americans, are able to meet more “magnifico” (so to speak) goals, even when they far exceed basic needs (like a sailboat). I see no reason for this to slow. As more people worldwide increase their education, and technology spreads, and efficiency of production everywhere increases, that means we will all be able to meet more goals, and bring us closer to our ideals.

We will continue to make compromises when striving for our ideals, but the things we compromise for will change. 25 years ago, the average family may have had to compromise if they wanted a computer. The original Macintosh that went on sale in 1984, adjusted for inflation, cost over $5000. Maybe you couldn’t have a computer and also a new car. But now you can buy a new computer for 1/10th that price. You can get your new car *and* a computer. That’s one less compromise you have to make. But now, you have to make a compromise because you can’t also get a new HDTV, which wasn’t even a compromise you had to consider 25 years ago.

When we don’t need to make these compromises anymore, then this state becomes the status quo. It’s pretty much a given now, 25 years later, that American families have computers.

We’ve nearly reached 100% literacy already, life expectancies continue to improve, more and more people are able to go to college. We’re meeting these basic needs and even more. Other things that have already become status quo: two days off every week, personal transportation in the form of cars, air conditioning, television. What’s next? May be universal health care? Clean, affordable electricity?

As each of these things goes from extravagance to status quo, that opens up room for us to consider a new extravagance, and as that becomes status quo, we do the whole thing again. So, “Which America” will we see in the future? The one where today’s extravagances are considered necessities, and the extravagances are things we can’t even dream of today. It happened over the last 50 years, and it happened over the 50 years before that, and it’ll happen in the next 50 years, too.

“In which direction do we want to go?” is exactly the right question, because I have no question as to whether we’ll go where we want. I’m sure of it. The question then is, are we honest with ourselves about what it is we really want?

If we really want simplicity, we can get there, but I think what we really want (many of us anyway) is to look just a little bit better than our neighbors. We all want to be impressive, in our own way, whether it’s through having the biggest house, or the best stories about traveling the world, or be well-known as a leader in our field. I think that’s human nature, and it’s why we’ll probably continue in the “magnifico” direction. I don’t think it’s necessarily a bad thing, either, if it’s done responsibly.

I hope this isn’t too much repetition from my last post. I was trying to clarify a bit, but I may have just said the same thing over again in different words. Sorry if you read both of these (very long) posts entirely and found the second one to duplicate the first.

I think there’s another factor to consider. Most of us have life partners (spouses, etc.), but partners don’t always agree on what lifestyle to lead. It used to be, for example, that Kris wanted to live a more modest lifestyle than I did. Now things have changed. It’s not Kris who has changed — her tastes are still relatively modest — but I who have altered my value.

As part of my experience over the past five years, I’ve transformed from magnifico to puritan. (Not wholly puritan, but much more so.) I do want a Mini Cooper, but whereas I would have bought one new in the past, now I’m willing to wait until I need a new car. I think our house is too damn big. (I like the land, but the house feels wasteful.)

The fact is, I do have the money to buy a lot of the things that I want. But now that I have the money, I find that maybe I don’t want those things after all. I’d rather have TIME or FREEDOM. To some extend, buying a Mini Cooper would be a sacrifice of some amount of time and freedom, and so I’m not willing to do it.

Anyhow. I’m rambling. I just think Tyler’s question is fascinating. It’s actually closely related to finding your “number” for retirement. That mythical magic number is the one at which you have enough to do whatever you want for the rest of your life. What is that number? It’s a question I’ve been wrestling with lately…

Our financial cushions are definitely dependent on what we consider “needs” and “wants.” I certainly think all the time about how at least half of my “needs” are actually just “really really wants.”

If only the government would help us be Buffetts before being Trumps. Many people have learned the value of thrift but I fear over-stimulation of the economy will force many people into Trumpish behavior.

Most of us want to live like Donald Trump. Maybe not quite to the same level as Trump, but we do want bigger and shinier and more exciting.

If what we really wanted was humble minimalism, we have groups that we can look to for an example. The Amish for example. They live perfectly fine lives, although simple by the standards of the American mainstream. We could all do that if we wanted, but we don’t really want to.

Yesterday you ran a column on appliances, written by a person who purports to value environmental responsibility highly, but can’t get by without a special purpose water-heating appliance. This doesn’t seem excessive to us, but it would to the Amish. It’s not necessary at all, it’s an extravagance.

What about you J.D., and your Mini Cooper? It feels like just a bit of an extravagance, but compare it to the Amish, and it might as well be a Bentley, which is the sort of car that Trump might drive.

For me, it’s boats. I own a boat. It’s small and old and relatively humble, but if I had millions of dollars, can I honestly say I wouldn’t buy a brand new one with all the fancy electronic equipment? Probably not.

We never tend to think of our own lifestyle as excessive. It always feels comfortable and “normal” to us, because it’s what we’re used to, but if we try to take the viewpoint of someone who lives with less than we do, once again say the Amish, or an African farmer, or Afghan nomads, we have to look towards our own lifestyle and say “Wow, look how lavishly they live! Television! Air conditioning! Cars! Cars *with air conditioning*! Fruits shipped in from other countries to eat when they’re out of season!”

The middle class in America is already “magnificos” when compared to most of the world, but we don’t really realize it because we’ve grown up with it. That’s the way that that American society works. The “standard of living” as we like to call it, has constantly shifted in the “magnifico” direction.

We rode horses, then we drove cars, then we drove multiple cars, then we put radios in our cars, then air conditioning, and then televisions and video games.

We listened to the radio, then we got TV, then we got color TV, then we got satellite, then our TVs got bigger, and bigger, and bigger, and we attached surround sound to them and added HD.

Fifty years ago, we had small two or three bedroom houses with one bathroom, they averaged about 1,500 square feet. Now we build houses twice as big, with more bedrooms, and one bathrom for each bedroom, and we have fewer children than we used to.

The constant magnific-ation of America is what we also call an increasing quality of life. No one is fighting it, and we all welcome it with open arms, except for a few, like the Amish. The means of production get more efficient as technology advances, and that’s why everyone is able to have more than they used to, even when they do the same amount of work

How many of us think that, when we buy our next car, we want it to have *fewer* luxuries than the car we drive now? How many people are thinking of moving to a *smaller* house than the one we already own? How about getting rid of your television in favor of an AM radio? Especially given the fact that you know you can afford these extravagances, and you’re getting rid of them simply for the sake of, well, what? Puritanicalness? Idealism? Will you impress yourself if you do this? How about your friends?

We don’t move backwards in extravagances, because once we have them, we cease to see them as extravagances, and they become status quo, and after a while, the status quo looks like necessities.

If you could imagine a life such that money was immaterial — one in which everything was free and you cold have anything you wanted, what sort of life would you choose? Does it still feel puritanical to you, or is it a bit “magnifico”, at least in the areas that you’re passionate about? If you have billions to spend on anything you like, then this is nearly the case — a 50 million dollar yacht is cheap if you have $50 billion in the bank, so why not get it if it suits your fancy?

This last scenario is where America is headed. People are going to work towards their ideals. We will never reach them exactly, but people are going to strive towards the lifestyles they’d have if economic issues weren’t a factor. Be honest about what you’d have and where you’d live and how you’d spend your time if it was all free, and then tell me how reserved it really is.

That is absolutely true about inheritence!

My great-great grandfather was worth about 1.2 million in 1899… he passed on some of his wealth to my great-grandfather who became a successful real estate investor in the post-war years. He then passed on all of his wealth to his three daughters (my grandmother and her sisters) I’m not sure of the amount but it was probably a couple of million all together.

There is to date one building that is owned by my mother and her cousins out of perhaps 15 or 20 40-years ago. They will probably sell it sometime in the next 5-10 years at which point my mom wil have a relatively small sum to put into her retirement holdings and will most certainly be gone by the time it gets to me.

However, my great-great grandfather’s 1908 mansion in Seattle is still in my family so that’s nice, but it will probably be sold when it passes to the next generation. Also we still own the house my mom grew up in and have great tenants in it right now. My mom plans to move there when she retires (it’s out in the country).

Anyways, yeah, if I build-up a large estate I believe I would donate most of it to charity as well… it really does more good that way than going to children who should be making their own way anyway.

There are a lot of things I might end up regretting in my life – most of them have to do with relationships, finding joy in life, living with a clear conscious. I can’t even imagine regretting not making a purchase or not spending money. Money is about responsibility and security to me. It has NOTHING to do with happiness. You couldn’t pay me to live like Trump. I don’t see him / his lifestyle as better than my rather financially humble one (speaking in terms of dollar signs).

1. People who amass a large estate will generally pass it on to their children, their children will consume much of what was given to them and pass what is left to the next generation. By the third generation the estate is nearly gone and there will be little if any to pass on. He described it as “shirt sleeve to shirt sleeve in three generations.” As I thought about he’s correct in nearly every family of wealth that I could recall.

2. The average amount of time it takes for heirs to spend money that has been passed down to them is 13 months, regardless of the some of money.

When you consider these averages I love the fact that Buffet is going to give his money back to society. He knows that the effects of his wealth will be multiplied exponentially if he passes on his wealth in this manner. What an example for the rest of us.

@KC
Money doesn’t provide happiness, it provides comfort and security against needs. That comfort provides us happiness. At some point your comfort level becomes maxed out and spending more money cannot make you happier. So what do you do with the money? Help others build a higher level of comfort in their own lives, thereby making them happier. (Not giving money away but providing them opportunities to increase their well being, think community centers) The result, you will then find that you are happier. Make sense?

Chett
5k5k.org

Ironically many of these magnifico’s also try to use their power & fame & to make the world better. They use their fame to encourage others to donate to charity (not that they donate much themselves) and they try to use their fame to encourage us to take up whatever their causes may be. It seems like the puritans just get invovled in causes and don’t flaunt it.

Perhaps there’s a personality or emotional issue when it comes to being a magnifico or a puritan. Perhaps introvert/extrovert? or something along those lines?

One could not exist without the other. They both have their place.

WB is awesome. The dude’s a sage… On the other hand, isn’t Trump in financial trouble? haha!

What an odd thing for our country. We should be more thrifty, but our economy is based on all of us been hyper-consumers.