What About Money and Happiness?

Are money and happiness related? Does money buy happiness? It seems very easy for some people to say yes, and even easier for most to say no. But I think the the truth is not so simple.

The research is interesting and mixed. Actually, the results of the research mostly agree from one study to another, but the interpretation of those results is where the arguments start. For example, one worldwide survey of happiness levels found that as incomes rose from poverty levels towards the average for that nation (or a little higher), people reported higher levels of happiness. Beyond a certain point there was no gain.

This seems like common sense if we believe that worldly conditions have anything to do with happiness at all. Peace of mind and some level of happiness that we might call joy has much more to do with one’s mind or spirituality, but extreme poverty is stressful to body and brain and of course it can interfere with worldly happiness. It also makes sense that as we meet our true physical needs money has less ability to raise our level of happiness, because other factors become more important.

Studies like this are commonly touted in the press as “proof” that money and happiness are unrelated. It may seem that way to those in the United States who are making an annual household income of more than $50,000 or $70,000 annual household income, since they might notice only the part about no further gains after that income level is passed. But what about the tens of millions of people who are not making that much? They might be more interested in the first conclusion of the studies, which is essentially that it does make a difference when you can pay the dentist, rent a decent place to live and eat healthy food.

Others have looked at the studies on a country-by-country basis and decided that since the United States is number twenty-three or so on the list of happiest nations, thatproves no link to income. Again, though, it’s a matter of interpretation and looking at the whole picture. If we are not as happy as those living in Bangladesh or Columbia it can certainly be for reasons unrelated to money. The more important statistics are the ones showing that Colombians and Bangladeshies who make more money are even happier than the residents there who live in poverty.

Imagine if we studied whether vegetables were good for people by comparing healthy people who ate few vegetables to obese cancer patients who ate many more. It would appear that vegetables were bad for people! The proper comparison would be cancer patients who ate many veggies with cancer patients who didn’t, or just a broad cross section of people to rule out other factors. Looked at properly we find that eating more vegetables is conducive to health when starting with a vegetable-deficient diet, as making more money is to happiness when starting out in poverty.

Now, obviously there is no way that money can directly buy happiness. But it seems clear that it can buy the conditions conducive to a happier life. Take two groups of poor people, where one group is happier than the other on average. Give the unhappy group more income and they may still be less happy than the others, but measured against their prior state we are likely to find that money helped a bit.

Money and Happiness – Part Two

Although this will confuse the issue a bit, I think it is worth adding that perhaps money can buy unhappiness. It is all about how it is gained and how it is used. Certainly we can see that the pursuit of money for its own sake, or for the sake of some dream that a person imagines will bring happiness, can backfire. How happy can you be chasing after money in ways that destroy your true values or at least bring more stress into your life?

More than that, just coming into money can be disastrous for those who don’t have the wisdom to use it properly. I personally know people who have suffered from sudden “windfall profits.” For example, a friend received eight thousand dollars in cash one day, and was left with nothing but debt as a result. That amount of money should improve the life of a person who normally make only twice that much annually. But it doesn’t work that way when it is used to get rent-to-own furniture and to make a down payment on a new car. Suddenly the money is gone and the debt and resulting stresses are greater than ever.

There are two important points here:

  1. To the extent that there is anything we can call happiness is based on circumstances outside our own minds or souls, money obviously can help.
  2. The degree to which money and happiness are related depends on how money is used.

The latter point is one that should be expanded on in another article. Perhaps with wiser use of money one’s happiness level can continue to rise even when one is further up the income ladder. We might get happier all the way up to say $100,000 annual income. On the other hand, with wisdom perhaps the level of income becomes even less relevant to happiness. We may find what we need without so much money, after all.

Finally, there is one more thing worth noting here. When we ask about money and happiness we assume that the question is about how happy the owner of the wealth is. But consider for a moment the billions that people like Bill gates and others use to fight disease and poverty and illiteracy around the world through their foundations. Again, if medical care and healthy food and freedom from ignorance can bring any little bit of happiness, money is the means in those cases, even when it is not directly in the hands of the people it helps.

A Collection of Money and Happiness Quotes

The following is a small collection of money and happiness quotes. Many people have expressed their thoughts on whether having money makes being happy more likely or not, so I’ll add more to this page from time to time. From the serious to the humorous, here are some of the quotes I’ve rounded up so far.

Money, if it does not bring you happiness, will at least help you be miserable in comfort. – Helen Gurley

Whoever said money can’t buy happiness simply didn’t know where to go shopping. – Bo Derek

Money only buys a small measure of happiness, and then only for those who have the wisdom to use it properly. – Steven Scott

Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy. – Groucho Marx

More money buys more happiness for the poor and more headaches for those who already have too much. – Anonymous

It isn’t necessary to be rich and famous to be happy. It’s only necessary be rich. – Alan Alda

A large income is the best recipe for happiness I ever heard of. – Jane Austen

A business is successful to the extent that it provides a product or service that contributes to happiness in all of its forms. – Mihaly Csikszentmihalyi

Anybody who thinks money will make you happy, hasn’t got money. – David Geffen

I’m going to miss Blockbuster. I’m gonna miss being CEO and all that stuff. We had an atmosphere where everybody was happy. When people make money, they’re happy. – Wayne Huizenga

It is good to have money and the things that money can buy, but it’s good too, to check up once in a while and make sure you haven’t lost the things money can’t buy. – George Lorimer

Happiness is not bought by money, but it can buy circumstances and conditions that improve the chances of a worldly kind of happiness. – Steve Scott

There are people who have money and people who are rich. – Coco Chanel

When people make money honestly, meaning they create and deliver a product or service of real value to offer others, it is the process itself that brings happiness more than the money. – Steven Scott

Money can’t buy you happiness, but it does bring you a more pleasant form of misery. – Spike Milligan

How to Get a Refund

The following is a true story that demonstrates how to get a refund. It also provides an example of what I think is a trend of more dishonesty and poorer customer service in many major corporations. I think you’ll be shocked by the way Federal Express handled customer service in this case.

It started on September 8, 2009. With a four-ounce jar of cream that was meant to help circulation. We needed to get it to a family member in Ecuador, and fast. Not only was it difficult to find there, but we couldn’t even find it where we live. After returning with it from the closest larger city, we brought it to the local shipping store that handles Federal Express packages, and paid $136 to have it arrive in Ecuador in two days.

The important part here, as you’ll see, is that everything we were told indicated it would be with the recipient in two days. It was in Ecuador in two days, but then sat in customs as my wife repeatedly called to hear again and again that it would be just a couple more days. Days turned into weeks.

On September 30, long after the need for the cream was past, Federal Express charged our family in Ecuador $15 to come and get it. That charge was presumably mentioned in the small print somewhere, but we didn’t know about it, and in a country where the minimum wage amounts to about 80-cents per hour $15 is meaningful. At this point I had enough.

I called Federal Express here in the states and started with, “Hi, I don’t want to be rude, but I will be getting a refund before this call is over, so can you get me someone who has the authority to do that?” The woman on the phone assured me that she could help, and proceeded to tell me that the customs delay was not their fault and therefore we didn’t qualify for a refund.

“Let me make this as plain as I can,” I told her. “It is not your fault that customs is slow, but it is your fault that you didn’t mention this possibility. Certainly you have run into this many times, and it is important information for the customer. We paid for two-day delivery, were never told anything to indicate that it would be longer, and would not have used the service if we new it might actually be 22-day delivery. In other words we didn’t get anything near what we paid for. Now, can I talk to a manager?”

She put me on hold and a few minutes later came back to tell me that yes, it wasn’t our fault that they were short on customs agents (not my point at all). A refund could be issued, but she could only send it to the shipping store that processed the order. It would be better to go there and get the refund, she said.

At the shipping store the clerk said she heard something about the matter. I told her about my call to FedEx and that “she told me to come here to get the refund.”

“She who?” the clerk asked.

“I’m sorry, I didn’t realize I would have to take names. But I guess I should.” I pulled out a pen and some paper. “What’s your name, and what’s the name of the owner of the store and his phone number?” She told me.

She called the owner, who first said a claim would need to be filed, then decided that the clerk should call Federal Express. She photocopied my receipt and wrote my number on it, promising to call after she resolved the matter. Then, as I was leaving she added, “But if they decide that it was something beyond their control-“

“Then we will still get a refund,” I finished. “We will talk to whomever we need to or file in small claims court against your company. Don’t take it personally, but you would feel the same if you spent $151 and got nothing close to what you paid for.” She agreed, but still didn’t seem inclined to help.

As I drove home I realized that a refund was never authorized and the the woman at FedEx. It seemed that her purpose was entirely to give me the run around in the hopes that I would drop the matter. No, if you think that’s a pretty awful way to handle customers, wait until you hear what happened next.

At home, I decided to call FedEx again, thinking they could authorize a refund and call the store directly. I spoke to a different woman this time, and forgot to get her name once again. She was very nice, and after a minute or two said she had just credited back my credit card with a refund. Matter resolved – or so I thought.

A moment after hanging up the owner of the shipping store called. I thanked him for the call and told him that FedEx just credited my card.

“I don’t see how that’s possible,” he said. “We don’t ever give them your card number. We don’t even keep it ourselves after the charge goes through.”

“So she outright lied to me?”

“I think so.”

He then let me know that it is normal for it to be several weeks to get through customs, but that the package was in Ecuador in two days. I was starting to feel like I was talking to insane people. He asked if we had ever shipped something overseas.

“No, and that’s the point isn’t it. You know about these delays, but we didn’t. Everything we were told indicated we were paying for a two-day delivery. I suggest that you inform customers that there is no such thing. And who cares if it reaches the country in two days? In what way is that relevant to anything? If it went for a cruise around the world for two weeks and then was delivered it would have been faster. The bottom line is that we didn’t get what we paid for and were never told we were paying for something else.”

I was much more polite than my select quotes might imply, by the way. At some point he seemed to realize that if he were in my place he would feel the same way. He called back an hour later to tell me that FedEx decided to refund the money as a “courtesy” even though we don’t technically qualify. He seemed surprised and mentioned that normally it’s almost impossible to get a refund even when a package is severely damaged.

I’m sure FedEx still doesn’t get it. They might claim it was the fault of the store, but the store is acting as their agent. They need to tell their agents to notify customers of possible and especially normal delays. The “fault” of the delay is irrelevant if not mentioned as a possibility at the time of payment. Suppose you had flowers delivered for a birthday and they came three weeks late. Would the cause matter? Unless the flower store notifies customers “you will still be charged if our driver gets lost and delivers dead flowers three weeks later” (or at least some generic disclaimer), you would expect a refund.

As an aside, I have to say that I’ve noticed more and more dishonesty as a “normal” part of many businesses in recent years. Nonetheless, it was still shocking that two employees of FedEx told me blatant lies. I wonder if this is tolerated in the company – or maybe encouraged?

How to get a refund:

  1. Make it clear that you deserve one.
  2. Be persistent (two hours was worth $136).
  3. Be polite, and attack the stupid ideas, not the people.
  4. Put the person you are talking to in your shoes.
  5. Make it politely clear that it will be much more trouble and expense for them not to continue fighting you than to just get it over with and issue that refund. Make it clear that you are committed to your goal and have unlimited time.

Usury – Definition and Another Perspective

What is usury? The term comes from the Latin usuria, and the original definition was simple the charging of interest, which by many religious traditions was considered immoral. Fortunately religions evolve, and most allow for a reasonable interest rate to be charged for the use of money. If not, imagine how few people would own their homes. How long would it take you to save the cash to pay for the average $180,000 house in The United States? For that matter, how would you be able to start some businesses if there were no lending allowed? (Not impossible, but all other systems are less efficient to say the least.)

Usury Definition

The word eventually came to mean either the charging of interest beyond the legal interest rate allowed, or just the charging of unreasonably high rates of interest. What is unreasonable is something determined by each of us as well as established in general by the feelings of people in a given culture. What is reasonable or unreasonable changes with times and circumstances, of course.

Usury – A New Moral Definition

The basic concept is a moral one, regardless of where the particular limits of reasonableness come from. The idea is that it is wrong to charge too much interest because it unfairly takes advantage of the borrower. Now, to the extent that a lender does unfairly take advantage of a borrower, I have to agree that it is wrong. On the other hand, this is certainly not determined by interest rate alone. With that in mind, here is my own working definition of usury:

To loan of money for interest when the lender knows or can reasonably be expected to know that the loan will do more harm than good.

That allows a lot of “wiggle room” for those who wish to rationalize away many destructive loans. Close your eyes and ears, for example, and you don’t have to know that a given loan will fund a gambling addiction. There is no avoiding this, though. Those who wish to make money while helping others to harm themselves will do so under any system, and usury laws generally make the matter worse because laws by their nature cannot consider context or make case-by-case judgments. Let’s look at a couple examples.

I once loaned a friend $200 and charged him a total of $25 for the five weeks it took him to repay. That’s an annual interest rate of 130%, far above the rate allowed by law, I imagine (I didn’t check). Another time I loaned a different friend $300 and collected $350 from him a year later, which amounts to almost 17% annually. The first was an honest loan in my mind, while the second was usurious (we’re all subject to making poor judments).

In the case of the first loan my friend was ready to get back to work after a time of unemployment, but he needed a special piece of equipment or he couldn’t take the job that was offered. Nobody else would loan him the $200 he needed, nor do banks or traditional lenders even make such small loans, especially to unemployed people. I loaned the money, he got a good job, and repaid the loan quickly (it was agreed that he would pay $5 interest weekly). It is difficult to imagine any way in which my loan hurt him, and it seems clear that it was exactly what he needed at that moment in life.

On the other hand, when I made the other loan for $300, I knew that friend was not only in financial trouble because he was irresponsible with his money, but it was also clear that he hadn’t yet changed his ways. I can honestly say that if I gave it ten second’s thought it was clear my loan would only compound the problem. In fact, it was quickly wasted like the rest of any money that went through his hands, some of it on gambling. No surprise.

I was just looking at the $60 in interest I expected to make in a month (it wasn’t supposed to be a year). The way I see it now, whether it was the 240% annual return I expected or even if I had made the loan at a 4% rate, it would have been usurious in either case. Why? Because I was profiting off of a loan that I clearly could see was more harmful than helpful.

As these two real cases suggest, it isn’t the interest rate that makes a loan usurious. Usury should be seen in context and strictly by the moral definition as it applies to each case. In other words, whether or not there are laws about this, each of us should consider our own actions both in lending money directly or even in supporting lenders who practice what we consider to be usury.

Determining Usury in Practice

I really only care about usury as an individual moral issue. I think the law is too blunt an instrument to be used in this area. It would have prevented my friend from getting that job, for example (at least if I obeyed the law), while perhaps allowing for the other friend to be more self-destructive. But whether there are laws or not, we still may have personal judgments to make about loans and lending, so how do we do it? My own thinking on the subject follows.

It seems to me that we cannot always know about the particulars of how a person will use money. A borrower may lie, but that’s not the only reason. As a practical matter a person or business that lends money regularly won’t have the resources to ask all the right questions and verify the answers. So, for example, it isn’t necessarily wrong for a pawn shop to make high rates of interest without knowing the purposes the money lent is put to. On the other hand, I would consider it usury if the owner of the shop knew the money was going to a gambling or drug habit. To me the moral choice in that situation is to refuse to make the loan.

In fact, a pawn shop presents a good example of a service that can easily do good orcause harm. This was the only other likely alternative for my friend who needed the $200 to get a good job. These businesses loan to people who have few if any other options, and sometimes those loans make a real difference in a person’s quality of life. Furthermore, the financial harm they can do is very limited, since they can’t really put the borrower into more debt. The “debt” they incur is covered by the collateral they leave, and losing ones favorite stereo, gold ring or gun does not have the potential negative consequences of taking on more real (unsecured) debt.

On the other hand, as much as I always liked the general business concept of a pawn shop, I also would feel a bit uneasy about ever owning one. It seems – from my experience with friends who use these places – that most of the loans made just fuel bad habits and make problems worse. And were there a way to easily screen for loans that actually helped the borrower, I suspect that the business would be far less profitable. Although there is nothing wrong with the concept, in practice it seems that pawn shops fall into a gray area in terms of usury. (A clear case of usury would be opening a pawn shop next to a casino to profit from people’s gambling addiction.)

A clear example of usury in my mind is credit card companies that target borrowers who are irresponsible with their money, as evidenced by their credit reports. In fact, I know of a friend who just had his rate increased to 48% annually. It was due to a changed due date – a tactic some companies may be purposefully using to trick people into paying late so rates can be raised. Encouraging people to go into debt for consumer items when they have already shown themselves unable to handle money responsibly, and then tricking them in order to raise rates – that’s usury.

Again I have to point out that high interest rates alone are not the issue. For example, in the world of real estate investing there are people and businesses called “hard money lenders” who some would call usurious, but when you take a closer look you see the real good that is done. An investor cannot get a fast loan from a bank to both buy and fix up a house, so he goes to a hard money lender. Let’s look at a quick example.

The house costs $62,000, and the investor will also need about $18,000 for repairs, closing costs and the expenses of selling. He expects to sell the home for $110,000 when finished. He has only a few thousand dollars of his own money to invest. He would want to check with Summit Point Roofing to see what project would give him the biggest return on investment with what money he has to work with. The hard money lender looks at the numbers and lends 70% of the ARV (after repair value) of $110,000, or $77,000. These are risky loans, so he charges accordingly, taking adding a $5,000 fee to the loan amount and charging 18% annual interest.

The home is repaired and remodeled – notice that there is real value added – and sold to a nice family for $107,000 about two months after purchase. The investor makes a net profit of $19,500 after paying all costs, including a total of about $7,500 to the lender. Now, the lender, who risked $77,000 to make $7,500 in two months, got an effective annual return of 58%. Is that usury? Not by my definition. Notice that the lender, the investor and the new home owners all benefit.

Of course there are gray areas in determining when a loan is for good an when it does harm. Is it harmful to loan money to a couple to go on vacation when they already have a fair amount of debt? Tough call – maybe they need the vacation to reenergize themselves and their business. The law certainly can’t make such fine distinctions, but you and I can make decisions that take into account everything we know about the case. With or without legislation, usury is a moral law in my mind, and the moral definition is the one that matters most.

What is the Value of Time?

In one sense the value of time cannot be measured. After all, your time in this life is the one thing that makes all other things of value possible. But is is also true that you must trade your time for things of value. This is what you do when you go to work to pay the bills. You trade five hours of time working for a month’s worth of electricity, for example (unless you use very little electricity or make a lot of money per hour at work.

Why is it important to measure your time according to the money you can earn with it? Here is one reason: If you can work an extra hour and make enough to pay somebody for some task that would have taken you two hours to do, you just freed up an hour to spend with your kids, read a good book or do whatever is of value to you. The following excerpt from my ebook, Money Saving Secrets will make this a bit clearer.

Know the Value of Your Time

In the end, time is the ultimate limit to what you can do in this world. In that sense, your time is your most valuable asset. However, to make that idea meaningful when it comes to anything involving money, you have to understand the dollar value of your time. Knowing what your time is worth lets you make the right economic decisions.

For example, a few years ago my wife and I went to South America for six weeks. We lived in Michigan at the time, and the tickets were fairly expensive when we checked. However, by playing around with the online ticket sites we noticed that they were very cheap if we left from Miami.

We realized that we could take a bus to Miami, pay for a taxi ride to the airport, and return the same way, for a savings of about $400. I should mention that I could take time from whatever jobs I had as needed, and we considered a two-day bus ride more of an adventure than an ordeal.

How do you make a decision like this? We chose the bus, by the way, and the whole six-week trip cost us a total of $2,200 for everything (and only that much because we had $200 stolen). My reasoning went like this: it cost 3 days extra time, and at that time, I couldn’t make more than about $300 in that amount of time, so it made sense to trade the time for a $400 savings.

Today, we wouldn’t even consider doing it again. Our standards of comfort have changed, but more importantly, I can make more than $400 if I sit at my computer here and work on the next project for three days. The point is that your time has value, and you have to consider that when making decisions about saving money.

If you make $25 per hour at work, should you spend an hour to mow your lawn, just to save the $15 that a neighborhood kid charges for the job? Not unless you really enjoy hard labor. It would make more sense to stay at work for an extra hour if you can. You’ll be $10 further ahead AND have the lawn mowed.

On the other hand, if you work for $10 per hour, and you can fix your broken toilet yourself in two hours, why pay $65 for a plumber? You’d even be better off taking off from work early to get the repairs done.

Some more examples:

– If you make $100,000 per year, you should never waste time clipping coupons.

– If you make minimum wage, you should probably take grocery bags to the store for the 5-cent credit they give you.

– If you make millions per year, you probably shouldn’t take the time to save money on anything that cost less than $100.

– If you are homeless, you should go to Sam’s Club on free sample day.
This is an easy principle to understand, but how often do we think this way consistently? What is your time worth? Put a number on it.

Suppose you just got your auto insurance bill. Should just pay it, or should you spend an hour and a half to call different insurance companies in order to find a less expensive policy? First answer two questions.

1. How much money can you normally produce with that time?

2. How much are you likely to save by doing this?

If the answer to number 1 is higher than number 2, just pay the bill and forget about it.

Of course you have to guess at these things. You can’t always know beforehand how much you will save. The point isn’t to waste even more time analyzing everything to death. The point is to understand and apply the principle involved. Once you consciously think this way for a while, you will develop an intuitive grasp of when – and when not – to trade time for money savings.

Am I am telling you not to use everything that you read in this book? Exactly. Use what works for you. Saving money is not an end in itself. When it serves the purpose of bettering your life, do it. Otherwise, why bother? The value of time is a personal matter and a personal decision.

More Quotes About Money

Here are some more quotes about money and financial matters. Two other pages of quotes are linked to at the bottom of this page as well. You might recognize some of these from one of the various newsletters I publish. The sayings range from the spiritual to the funny to practical.

Never invest your money in anything that eats or needs repairing. – Billy Rose

Men are more often bribed by their loyalties and ambitions than by money. – Robert H. Jackson

When it is a question of money, everybody is of the same religion. – Voltaire

Bankruptcy is a legal proceeding in which you put your money in your pants pocket and give your coat to your creditors. – Joey Adams

Civilization and profit go hand in hand. – Calvin Coolidge

Corporation: An ingenious device for obtaining profit without individual responsibility. – Ambrose Bierce

Don’t be seduced into thinking that that which does not make a profit is without value. – Arthur Miller

The amount of money you have has got nothing to do with what you earn… people earning a million dollars a year can have no money and… People earning $35,000 a year can be quite well off. It’s not what you earn, it’s what you spend. – Paul Clitheroe

Money is neither my god nor my devil. It is a form of energy that tends to make us more of who we already are, whether it’s greedy or loving. – Dan Millman

Business is the art of extracting money from another man’s pocket without resorting to violence. – Max Amsterdam

Always borrow money from a pessimist, he doesn’t expect to be paid back. – Author Unknown

It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy. – George Horace Lorimer

Waste your money and you’re only out of money, but waste your time and you’ve lost a part of your life. – Michael Leboeuf

This planet has – or rather had – a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small green pieces of paper, which is odd because on the whole it wasn’t the small green pieces of paper that were unhappy. – Douglas Adams

A wise man should have money in his head, but not in his heart. – Jonathan Swift

I’d like to live as a poor man with lots of money. – Pablo Picasso

The real measure of your wealth is how much you’d be worth if you lost all your money.

Two Dozen Money Quotes

You’ll recognize some of the following money quotes from one of the various newsletters that we publish. We will add to the collection from time to time.

The more you learn, the more you can earn. – Steven Scott

Money never starts an idea… it is the idea that starts the money. – W. J. Cameron

Empty pockets never held anyone back. Only empty heads and empty hearts can do that. – Norman Vincent Peale

Do not value money for any more nor any less than its worth; it is a good servant but a bad master. – Alexandre Dumas

To suppose as we all suppose, that we could be rich and not behave as the rich behave, is like supposing that we could drink all day and stay sober. – Logan Pearsall Smith

A nickel ain’t worth a dime anymore. – Yogi Berra

If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability. – Henry Ford

A man is usually more careful of his money than of his principles. – Oliver Wendell Holmes, Jr

Inflation is taxation without legislation. – Milton Friedman

Money does not pay for anything, never has, never will. It is an economic axiom as old as the hills that goods and services can be paid for only with goods and services. – Albert Jay Nock

People are living longer than ever before, a phenomenon undoubtedly made necessary by the 30-year mortgage. – Doug Larson

October: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August and February. – Mark Twain

Money is human happiness in the abstract; and so the man who is no longer capable of enjoying such happiness in the concrete, sets his whole heart on money. – Arthur Schopenhauer

Money is much more exciting than anything it buys. – Mignon McLaughlin

Money is power, freedom, a cushion, the root of all evil, the sum of blessings. – Carl Sandburg

A man’s soul may be buried and perish under a dungheap or in a furrow of the field, just as well as under a pile of money. – Nathaniel Hawthorne

It frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy. – Groucho Marx

They deem me mad because I will not sell my days for gold; and I deem them mad because they think my days have a price. – Kahlil Gibran

The waste of money cures itself, for soon there is no more to waste. – M.W. Harrison

It’s a kind of spiritual snobbery that makes people think they can be happy without money. – Albert Camus

When it is a question of money, everybody is of the same religion. – Voltaire

Money is like manure. You have to spread it around or it smells. – J. Paul Getty

Money is better than poverty, if only for financial reasons. – Woody Allen

I don’t like money, actually, but it quiets my nerves. – Joe Louis

Money Trouble – Ten Reasons

Different people have money trouble for different reasons of course, but there are some mistakes and bad financial habits that are common. They explain why some people have problems with money over and over again. Why not see if any of the following apply to your own life. Here are ten common reasons for financial problems.

1. Refusing to think about money seriously…

What if you refused to pay attention or think about where you were going when driving. You might get lost and have accidents more often, right? Well the same is true of money naturally, but nonetheless many people just don’t like to pay attention to it or think about financial matters. It may be that something from their past has caused them to think it isn’t right to think about it, but the results are continual trouble, so give it some thought right now and regularly.

2. Valuing appearances over understanding reality…

Want to look wealthier? Go get a loan and buy that new car. But if you want to actually be wealthier, that’s the worse choice you can make. It may surprise you to know that 40% of millionaires buy used cars, but this certainly isn’t just a lesson about buying automobiles. Building wealth and using your money wisely is the deeper lesson. In fact, you might not guess who around you is a millionaire, since many do not go for appearances. Quit trying to create the illusion and start working on the reality of creating wealth.

3. Blaming…

Often a person is partly right about whose fault it is that they are broke or facing financial problems. Unfortunately for them though, blaming outside forces it is the absolute worst approach to overcoming their troubles. To blame is to give away power to others and to outside factors. Look at what your role in the problem is and what you can do to correct or improve things.

4. Thinking you get more with debt…

Yes, you can have more things right now by putting them on your credit cards, or taking out a home equity loan. But this makes everything more expensive, and if you pay more for everything you buy, doesn’t it make sense that over the course of you life you can’t buy as many things? Not only do you get better prices for cash, but you also save the interest charges. Use debt for homes, business and investments, and pay cash for everything else you buy.

5. Ignoring regular expenditures…

Some expenses can be easily stopped at any time, like going out to eat or buying magazines, but what about your more or less fixed expenses, like rent, electricity, gasoline for the car, insurance and such. When these expenses are too high you are in trouble every time your income dips or is interrupted, or something expensive comes along. Why not consider renting a smaller place if necessary, getting a high-miles-per-gallon used car, and trying to keep all the fixed costs in your life to half of your income or less.

6. Ignoring where the rest goes…

Many people have money trouble because they have no idea where the money is going. A friend had pizza delivered three times per week for about $20 each time. Did he know he was spending over $3,000 per year on that one habit? Not likely. The solution? Pen and paper. Record everything you spend and what you spent it on for a month or two.

7. Ignoring the real cost of things…

When people decide they want something, they sometimes play games with their own judgment. “It only costs…” they say, referring to the initial price, but ignoring all the ongoing expenses. Buy a boat, for example, and you have not just the payments, but the cost to operate it, insurance, annual license and registration costs, repairs and maintenance, and more. Some people are paying $200 for each use of their small boats without ever knowing the truth. The solution? Star doing the math honestly.

8. Pretending things are more unpredictable than they are…

If car repairs or other surprises that cost less than a thousand dollars are the source of your money trouble, you need to start thinking in new ways. It may be true that you don’t know when the washing machine will die or when your insurance rates will rise, but you do know that these “surprises” will happen at some time. That means you can plan for them by setting aside money every week for such “unpredictable” expenses. Put it in a separate account so it will be there when it’s needed.

9. Being too generous with friends and family…

Many people get into money trouble because of their generosity with friends and family. Whenever they have a bit of money saved a friend or family member has a need for it, so they help. At least they think they’re being helpful, but then money rarely changes people’s situation if they don’t know how to use it wisely. Also, when you never quite get your own financial situation right you are less able to help others when you truly can. Get your own house in order first, and then give wisely when you do give to others.

10. Expecting to get rich quick…

I’ve known people who spend thousands on seminars that promise to help them get rich quick, and then find themselves as poor as ever. It isn’t that it is impossible to get rich quick, but it isn’t likely, and the fantasy often gets in the way of getting rich at all, because it helps us avoid doing what needs to be done for long-term financial success.Look for ways to make more money, but be prepared to do what it takes and work as long as it takes. Schemes that promise an easy solution to your money trouble usually ignore the root of the problem, which is in your mind.

The Essence of Wealth Creation

Many people speak of wealth creation as though it’s just about accumulating assets and money. Find a way to get the money coming in, then invest it to grow your net worth; that’s the most common conception. But there is a difference between creation and transference, and “getting” money can be mistakenly called “making money,” which is often not the same process at all.

For example, suppose you make a bet with a friend on a football game and you win. No new value is created, except the minor pleasure of gambling perhaps. The money is simply moved from the your friend’s wallet to yours. On a larger scale, we can say the same when credit default swaps are used by financial institutions not as insurance, but merely as a form of gambling. Large banks and funds became gamblers in the years leading up to the real estate slump that started in 2006, using these derivatives in that way. Some were no longer creating any real value, instead just moving wealth around by way of speculative bets.

Wealth Creation is What?

If it isn’t just getting rich, then, what is wealth creation? For an easy example, let’s get back to the small scale; you buy a couch and there is real value created and traded. A company creates a comfortable piece of furniture that people want to use, and buying materials ranging from wood to cloth and nails in the process. Such things are real created values. You, meanwhile, have to create and trade something of value to get the money needed to buy the couch or other furniture. That would be your labor and skills if you’re an employee, or your product or service if you own a business. Wealth creation takes place every step of the way.

Basic speculation can create value in the right circumstances. Those who trade futures contracts, for example, create a way for farmers to guarantee a price for their crops months in advance. That way they don’t go bankrupt if the market price is down when it’s time to harvest. Meanwhile, a tortilla chip maker can know ahead of time what his corn will cost, and so plan effectively for his future production. It is the speculators who take on the risk, creating a valuable system that allows more consistent production and planning.

The crucial test is that any honest wealth creation serves the needs of people in some way. Swindle a man out of money and you can profit in a financial sense, but nothing new is created. You have to make something of value to create wealth, and trade it to create financial riches. It isn’t difficult to understand the idea, but it is often forgotten or ignored.

When many people think of how to make money they think of a job or business, but do so in a mechanical way, meaning they think of the steps to go through to gain money. Get a job, do as you’re told and collect a paycheck, or start a business, follow what others have done and make a profit if all goes well. Nothing is wrong with this approach in itself, but it is very uncreative and limited. After all, someone else has to provide the job to be done or the business model to be imitated.

What’s the alternative to this? Start by looking at what value you actually can create and provide to others. At the simplest level, forget about the paycheck for a moment and ask if you are providing much value to your employer. Ask what you could do to create even more value. If in business, consider what customers want and need and if there are better ways to provide those products or services. Explore the possibilities of other needs people may have.

The essence of wealth creation starts with original thought. You can of course also copy what others have done and in doing so provide real value to people. Either way, providing something of real value to people is a much more satisfying way to make money than to simply look for the quickest way to move dollars into your pockets. Naturally you want to “get paid,” and there are always ways to do that, but wealth creation comes first if you want to do that in an honest and healthy way.

Money Questions and Answers

I get money questions from subscribers to the Money Matter newsletter, as well as from those who get my Unusual Ways (To Make and Save Money) newsletter. Here are three recent ones, along with my answers.

Q: I just bought your course (You Can Make Money Writing, which is no longer available). You and other marketers talk about creating ebooks and then creating websites for them; sometimes that adds up to 20 or 30 websites. To me, that sounds expensive. Although domains are fairly cheap, hosting fees, on a monthly basis really add up if you have many websites. Is there any way to get around this?

A: If you have a decent sales you might do well with only a couple ebooks and websites (we could pay all our bills with some of our sites by themselves). You can also start one and use the profits from that to pay for the next and so on.

But hosting isn’t that expensive. At Hostgator, for example, they have a plan for about $8 monthly that allows unlimited websites. If you go to hostgator.com you’ll see a link that says: View Web Hosting Plans . That will get you to a page that shows several plans. You are limited in bandwidth, but we could put a dozen of our sites on a server like that, meaning it would be less than a dollar per month each. We currently use a plan with them that costs $25 per month and we have about 25 active sites on that. In any case, if you pay by the year you can get the cost down to $5 per month and then upgrade once you start making some money off the first site.

The other way around the problem – if you are really short on cash – is to start with a free blog at blogger.com. No cost except a bit of time figuring it out (the technical stuff is my weak point so my wife does most of that). Then you could create an ebook, list it for sale at Lulu.com (it cost nothing last time I looked) and use your blog to promote the ebook. Find a free PDF converter (there are few online) and you can start your internet business with no money at all (assuming you have a computer and internet access already).

We probably spent about $600 on our business before we started making money, plus $100 for a used computer. But hosting and almost everything else has gotten cheaper. There really are ways to start with nothing or speed it up with just a couple hundred dollars. Good luck.

Q: Is money really that important?

A: Money is more important than people realize but overvalued at the same time. Although that may sound contradictory, it isn’t. We tend to ignore the power of money for good and bad. It’s all about how we use it or abuse it and how we could use it. Certainly if we love people and want them to eat, get medical care, etc, money is important. Even spiritual pursuits often involve money, since we cannot buy a good book or visit a good teacher or build a meditation retreat without it. And the ways in which we spend it powerfully impacts lives around the world for better or worse. It is important in this life if this life is important.

But at the same time most people put too much value on money for it’s own sake. It’s easy to get caught up in chasing after it while forgetting that the value is in what it can be traded for. We wish we had time to pursue this or that worthy goal for example (time with children, writing a book, traveling, attending a retreat, starting a school), and money would buy the time for those things if it was used that way, but instead we fall into debt and then spend more time going after more money (and how valuable can it be if we don’t know how to use it wisely in any case?). Then money becomes not only without much value or true usefulness, but it actually helps lead us away from what is valuable.

Money is a very important tool in life, but like any tool it is not valuable because we can look at it, own it or show it off. And it is not useful if we try to use it for the wrong purposes, any more than a hammer is valuable for cutting wood. The value is in what we create using it.

Q: I’m a natural procrastinator, and I’ve had a great business opportunity for the past month, but each day I say I’m going to do something about it, then put it off another day. That seems to make it more and more difficult to get started. Any advice?

A: Motivation is one of those mysteries of human nature, and what works for one doesn’t for another. But procrastination unfortunately trains you to procrastinate more (you basically convince your brain/mind that action doesn’t have to follow intention), so I would either quit the goal completely for now or do one of the following things that have worked for me and others:

1. Be sure that you want to do it and have good reasons, then focus on those reasons.

2. Find anything else that excites you (a plan, a vacation, a political opinion – anything) and talk about it to someone, and then go back to the task at hand (this is a way to create energy and then transfer it to what you want to do).

3. Finally, what seems to work best is momentum. The second you finish this email do something towards your goal, however small. Later take one more small step, and do the same tomorrow. If it is a small enough step you shouldn’t have any trouble overcoming your inertia, and yet it will create a bit of momentum. At some point the movement itself creates motivation.