“For the love of money is the root of all evil…” 1Timothy 6:10
In my profession as a Wealth Manager, I have had the opportunity to meet many people who ask me questions about their finances. However, the vast majority inquire about a stock. Within the first 5 minutes of the conversation, the curtain pulls back, and their real agenda becomes evident, “Give me something, inform me about an investment that can make 20 to 30% in a year.” Most continue to communicate the reason why they need a 20 to 30% return, and it can be for a number of reasons. I need a vacation; I overpaid for my car. I need a new car; I started saving late for my retirement. My daughter is getting married; my kid is going to college; I am recently divorced. I lost my job; I took a huge loss in the last market downturn and so on and so on… All of this leaves me to conclude that many people have no real understanding of money. They don’t understand what it is; how they should use it; how to save it; how to invest it; how to grow it and how to keep it. Their lack of understanding is not entirely the individual's fault, much of this has failed to be discussed in the home, school or church, and many of the financial professionals have no clue.
While watching Bloomberg, several commercials of public advisories, brokerages, and investment banks are running ads where clients are asking, why should they have to pay fees in a market downturn, or when their account has lost money. The setting for the commercial is often held in a serene place over a cup of coffee, between a father and son or husband and wife. So the son asks the father, or the wife asks the husband, do you have to pay fees when the account value is down? The father or husband turns around with a bewildered look on his face as if he is in deep thought and says good question. The whole time I am watching this, I am thinking this is “un-believe-able.” I have often wished I could get my money back when the premium is paid for insurance that I never actually use. If that is a real question, maybe I should contact State Farm about the 20 years of premium I have spent, without ever making a claim, perhaps they will give me that back. “Ridiculous,” investing in stock is ownership, which means I must go through adversity to reap in good times. I understand that experiencing losses teach valuable lessons that are far more valuable than what is typically lost. I am convinced that if an individual got their money back every time something didn’t go their way then, the failure would occur again and again. My point is, if you get that frightened during a market downturn (when there are two consecutive quarters of loss), then you shouldn't be investing. Furthermore, if you cannot shoulder a year of losses, you shouldn’t be an owner, because apparently, one doesn't believe in the business they are participating. Many people want to treat investing as if it’s merely speculating or they treat the market like a casino. Investing is the art of ownership in successful and fruitful businesses.
Money is simply a medium that can be exchanged for goods and services and is used as a measure of their values on the market. Money is not evil in and of itself. Money is a tool, it's neutral, it can be used for evil or for good. It serves the needs and desires of its owner. Its use rises or falls to the character level of its owner. It can act as a mirror, displaying what's right or flawed in a man's character. Money is an amplifier; it will enhance what is already there. For example, If you are a drug addict with little to no money, and somehow your money increased, you will likely use that extra money to purchase more drugs, so the additional funds amplify the drug addiction. An increase in funds does not solve the problem. If you are a giver and that individual have a limited amount of money, and suddenly you had additional money to give, you would likely give more money. For an evil person, more money would allow them the opportunity to do more evil. For an individual who does good, with more money, would likely do more good. In most cases where there is a lack of money, more money would not improve the situation; and in many cases, it would likely make it worse.
A lack of money is a result; it's not the cause. No matter how small the amount is, realizing you have something to work with is the beginning of thinking soberly about your finances. Very few people are born with all the money they would ever need. However, throughout our lives, many of us will have a fair amount of money that will pass through our hands, but it's what you do with it that matters. I have always believed that building wealth is often tied to a person’s life philosophy; your life philosophy will determine how you would use the money. The above statement brings me to a story I heard about the Governor of California and Governor of Texas. “Ever wonder about the different political and life philosophies of two of the largest states in the United States? It's apparent that California's, and Texas' leaders have different world views. It may be a long topic of discussion, of why they differ at times. How each state governor deals with an unexpected problems, and their respective solutions?
The Governor of California is jogging with his dog along a nature trail when suddenly a coyote jumps out and attacks him and his dog.
#1. The Governor starts to intervene, reflects upon the movie "Bambi" and realizes he should stop; the coyote is only doing what comes naturally to him.
#2. The Governor calls animal control. Animal control captures the coyote and spends $200 testing it for diseases, and an additional $500 to relocate it.
#3. The Governor calls a Veterinarian for his dog. The Vet collects his dead dog and spends $200 testing it for diseases.
#4. The Governor goes to the hospital and spends $3,500 getting checked for diseases from the coyote, and to get his bite wound bandaged.
#5. The running trail is shut down for six months while the wildlife services conduct a $100,000 survey to make sure the area is clear of dangerous animals.
#6. The Governor spends $50,000 of state funds implementing a "coyote awareness" program for residents of the area.
#7. The State Legislature spends $2 million investigating how to handle rabies better, and how to eradicate the disease possibly.
#8. The Governor's security agent is fired for not stopping the attack and for letting the Governor intervene.
#9. The Cost: $75,000 to train a new security agent.
#10. PETA protests the coyote relocation and files suit against the state.
The Governor of Texas is jogging with his dog along a nature trail when suddenly a coyote jumps out and attacks him and his dog.
#1. The Texas Governor shoots the coyote and keeps jogging. The Governor has spent $0.36 on a .380 hollow point cartridge.”
The above story shows that your life philosophy can have a significant impact on your finances.”
“You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it.“ WARREN BUFFET
Warren Buffet’s investment principles have to do more with his investment philosophy rather than strategy. One of his most powerful quotes is "if you can not control your emotions; you can not control your money."
The "Good Book" says that the love of money is the root of all evil. For many years, I have heard others recite this same passage but without the word "Love" leaving the implication that money alone is the source of all things not good. In this passage, the word "love" is critical not to leave out, because it describes an emotional connection that will ultimately lead to one’s demise if omitted.
Many of us blame the lack of money for a lot of the financial hardships that we experience in our everyday lives. It may be the reason that we can't take that much-needed family vacation. Why we are not able to save for retirement or contribute to our children's college fund. Or the reason why we can't put funds aside to open a business, buy a new home or donate to a cause that we care for deeply.
Let's be honest with ourselves for a moment. If we look more deeply into our individual situations, we will find that the lack of money is a symptom and the real problem is our emotional connection to satisfy our temporary hunger. Ironically if we think about it, our brief hunger exist no matter how much money is available to us. In reality, money is neutral, a tool that we use to amplify our inner most desires. That's why a person can receive a raise on their job but still continue to have the same financial struggles; living with debt and from paycheck to paycheck. Or a family can win the lottery and years later end up broke. The consensus is that more money will solve our problems but our issues have deeper roots: fear, lust, anger, grief, hunger, guilt, jealousy and yes, love for example.
“In its famous paradox, the equation of money and excrement, psychoanalysis becomes the first science state what common sense and the poets have long known- that the essence of money is in its absolute worthlessness.” Norman O. Brown
“Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has, the more one wants.” Benjamin Franklin
“ A fool and his money are soon parted.” Thomas Tusser
“Do what you love, and the money will follow.” Marsha Sinetar
“A man with money is no match against a man on a mission.” Doyle Brunson
“Wealth flows from energy and ideas.” William Feather
We must come to terms with the real origin of our relationship with money and what causes us to lose control of our finances. Many times the source of our money problems has nothing to do with money but has everything to do with our life philosophies. Marcel Laborde, a French financial journalist who was an acquaintance of John Maynard Keynes, an English economist, wrote Keynes a letter in 1920. He states “ it is self-evident that man will never be able to know what money is no more than he will be able to know what God is or the spiritual world. Money is not the infinite, an astounding complex of all sorts of psychological as well as material reactions.” Laborde is just stating that money is a result of reactions. Money is for the individual, the sum of his thoughts of money. It's difficult to define for each what money is because it totally depends on their perception.
The creation of money exists within a legal order; it is a political act. As President Lincoln said, “Money is the creature of law, and the creation of the original issue of money should be maintained as an exclusive monopoly of the National Government.” Paper money is backed by the national government, however, if there is a lack of confidence in the federal government then money will lose its value. Paper money, without the cooperation and trust of the people using the exchange, will return to its original value, paper.
1Timothy 6:10, “For the love of money is the root of all evil…” It is simply a realization that money is just paper and holds no real value of its own. But, it's value is granted through laws and confidence. Therefore, to love paper over people or to value it above ideals, honor, character, loyalty, is the beginning of perversion and the root of all evil. To place your faith and confidence in a medium of exchange above all else makes the paper your source or your God. This trust is severely out of order and fosters the emotional attachments. It is the foundation of wrong thinking that allows a person to kill for it, steal for it, lie for it, cheat for it, and deceive for it. When a purpose of a thing is not known or forgotten abuse is inevitable. Many who read this article may say that I will not kill for it or steal it. Therefore I am ok. However, if a lack of money in your bank account changes your emotional state from happy to sad, from peace to fearful, from secure to insecure, this is a sign that your relationship with money may be out of order. If the thought of you losing money brings you into a complete panic, where you cannot eat or sleep, perhaps your relationship with the paper is out of line. If you become enraged with a family member or friend over a $100 loan and refuse to speak to them until the debt is paid, check your relationship. Only when a person places money in the proper perspective can that individual think soberly about money. If that individual stays in their emotions, then their money will manage them instead of them managing their money.
AUTHOR: MARCUS TURNER, DEXTER SAMUELS
EDITED BY: THOMAS GOINES, PAT MCELYA, TIMOTHY BLIGE
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