“Working to help parents raise money-smart kids.”
Hello, friends!
You know how there are those quotes you just can’t shake? Ones that feel like they hold a fundamental truth. This one has stuck with me ever since I first read it in Greg McKeown’s book, Essentialism: The Disciplined Pursuit of Less:
“You can’t underestimate the unimportance of practically everything.”
– John Maxwell
This week, I want to present “3 Ideas to Share and Save” I know are important and worth helping our kids begin to comprehend.
— 1 —
Less envy. Happier life: Said in other words, “Comparison is the thief of joy.” While this quote has been attributed to many folks, I last heard it uttered by Seattle Seahawks backup quarterback Drew Lock. Backups must prepare, wait their turn, and do their best not to envy (in Lock’s case, the Seahawks’ current starter, Geno Smith).
Smith himself was a backup for seven years until his turn came last year and he had the breakout season no one expected. Smith displayed wisdom beyond his 32 years when he was asked last year about his struggles going from first-round pick in the 2013 draft, to career backup, to finally, a breakout star. He told a reporter that “other people would kill to have my problems.” In other words, he was living a relatively charmed life. He wasn’t envious of the many others who succeeded while he toiled in relative obscurity.
Let’s move from football to finance. While Warren Buffett gets most of the press as the head of Berkshire Hathaway, his partner Charlie Munger is as much a font of wisdom as Buffett, if not more. Did you know it was Munger who set Warren on the path to transcendent wealth? Yes, it was Munger who advised him to stop buying okay businesses at great prices and to instead focus on buying great businesses at fair prices; companies like See’s Candies, Nebraska Furniture Mart and Coca-Cola.
Munger and Buffett both like to say the world is driven less by greed than by envy, and I have to agree. We see the ever-widening gap between rich and poor, and greed easily comes to mind. At the same time, it’s easy to forget how much progress we’ve made in the past hundred years. Modern medicine, electricity and many other technological improvements have made the life of the average person immensely better than just 200 years ago, in what amounts to a cosmic blink of an eye. It’s easy to miss the relative abundance in which we live. We’re like the proverbial fish who asks “What’s water?”
Of course, technological progress is also part of the problem. With feed after social feed making it seem that everyone but us is on vacation or at a Taylor Swift concert, we forget the markedly better lives we lead. It’s not greed, but envy that causes us upset about this state of affairs. We don’t compare ourselves to our 200-year-old ancestors. Instead, we compare ourselves to our friends posting pics at Stonehenge or belting out Anti-Hero. Research shows that however much lip service we might pay to being happy for the wins of others, we ache psychologically when we’re doing worse relative to our neighbors or family members.
So what’s a human to do? While a gratitude practice won’t eliminate envy, it can help us (and our kids) break out of the grass-is-greener trance that often clouds our minds to the reality of our pretty good lives. PodFriend Ellen Rogin talked about a wonderful idea of “Volunteer Vacations” to help her kids learn the importance of service, and perhaps also discover through experience that their problems possibly paled in comparison to the difficulties others might be experiencing.
— 2 —
Live beneath your means: Had Moses come down from Mt. Sinai with a tablet of money maxims rather than life commandments, perhaps “live beneath your means” would have topped his stone tablet. Because we are imitative creatures who often want what others have, (see idea #1 above!), this is much easier said than done. There’s a reason that I didn’t immediately follow this exact advice when my grandfather doled it out the day I graduated college.
It’s easier to hear this maxim than it is to stick to it. Our willpower is limited, and while some folks truly are better at tapping into willpower more consistently than others, we can’t assume that we (or our kids) will be above average when it comes to this resource. Systems play a big part in helping us overcome ourselves. The more we systemize (or automate), the less we have to rely on our often weak willpower reserves.
This is why we start an allowance and require our kids to put some in the Save and Share jars for longer-term goals and charitable giving, respectively. We’re helping them learn to build systems. These early lessons can become later reference points.
For example, when they get a job, we can remind them of these systems we helped them establish early, and “nudge” them to put some of their income into an “adult Save jar,” like a 401(k). Or, to put some money aside to be prepared when Uncle Sam comes calling. As PodFriend Bobbi Rebell explains, however, even when they fly the coop, fully separating from us financially, our job still isn’t over.
— 3 —
Use money as a tool: “Caffè sospeso” is a wonderful Neapolitan tradition. Literally translated, it means “suspended coffee.” When you buy coffee in Naples, you can leave money with the merchant so when another customer who can’t afford coffee stops by the stand, she’s covered. It’s a caffeinated way to “pay it forward.”
While the benefit is obvious for the person who gets to enjoy a suspended coffee, research from the book Happy Money: The Science of Spending, tells us the giver is also receiving a gift, because spending money on others has been demonstrated to make us happier.
Another way we and our kids can use money as a tool to improve our happiness is to buy experiences in advance. You may have already taken advantage of this opportunity to double your pleasure. Have you ever noticed that when you pay for a vacation in advance, you not only enjoy the experience itself when it comes around, but you also get to bask in the anticipation of the experience? Funny enough, the anticipation is sometimes better than the experience.
I hope you enjoyed this week’s three ideas. They pass muster for me as important money maxims. I’d love for you to email me the three ideas you’d etch on your stone tablet!
Until next time, enjoy the journey.
John, Chief Mammal
P.S. Please consult with a financial or investment professional before engaging in any decisions that might affect your own financial well-being.
Like what you just read? You can sign up for the newsletter here.