Get Rich Slowly reader Drake says, “I thought you'd be interested in a portion of an email I sent to my college-age nephew several months ago. It expresses my attitude about money.”
Money is very important, but only if it is understood properly. Most people don't understand it at all. They don't understand how money fits into a full and complete life, how it needs to be controlled, how one should relate to it.
Money is a servant, not a master. It's a tool, a vehicle to get you from one place to another. It is not a good in itself, nor is it an evil in itself. It is simply useful, and even then only up to a point. A certain amount of money gives freedom, the freedom to choose alternatives, the latitude to control your life. Above all, understanding the purpose of money gives the freedom to focus on things other than money.
Many people misquote the Bible when they say, “Money is the root of all evil.” But what the Bible actually says is, “The love of money is the root of all evil.” There is a huge difference between the two. Love of money is a common disease. After all, how many people do you know who are focused on buying and having things? Lots, right? For some people, it even seems that's all they think about. Clothes, car, apartment, watch, electronics, whatever. It consumes their every waking hour. It's a very common and pernicious disease, and our culture encourages it. It's the love of money, not money itself, that enslaves people, that controls their behavior and makes them self-centered, angry, and always dissatisfied.
What we want from money is happiness. But money can't give happiness any more than a weed-whacker can. It simply helps clear obstacles out of the way. That's where people get confused. It's not true to say there is no relationship at all between money and happiness. But it's also not true to say money is happiness. Money is a tool. It's helpful in getting happiness just as a hammer is helpful in building a house. But no one would mistake a hammer for a house. By the same token, we shouldn't mistake money for happiness.
Because money is a tool, you want to always keep some around. That means saving money. You save it. You don't spend it as soon as you get it. The more you save, the more freedom you have. It's possible — even fun — to think of ways of being happy without spending money. You know, for example, that I like hiking. I like it in and of itself. But I also like how little it costs. I like the thought that I'm out there having a great time, enjoying beautiful nature, getting exercise, being together with good friends, seeing new things, and all the while I'm spending zero dollars. I'm sure other people get an equal amount of happiness playing golf or sailing in their sailboats. But I'm spending less money per unit of happiness, and I like that.
That's a concept I have, you see: “Unit of happiness.” I have no idea how you measure happiness, or what one unit of it would be. But I know when I'm happy, and I know when I'm spending money, and I know that there isn't necessarily a relationship between the two. Sometimes I spend money and I'm happy, like going out to a fine restaurant. Sometimes I don't spend money and I'm happy, like hiking. So I devote more time to the inexpensive things that make me happy, only occasionally spending money on other things.
That, I think, is the proper attitude toward money. You save it. It gives you freedom. And with that freedom every now and then you spend a bit of it, just because you want to.
Outstanding advice. If all uncles gave advice as sound as Drake's, young people would be in better financial shape.