A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do. — BOB DYLAN
We live in a world of illusion, and these illusions keep us from our happiness — especially around money. Money drives our world. We organize our whole lives around it: earning it, worrying about it, spending it. Yet many of us are taught next to nothing about it.
The whole point of Buddhism, and all forms of mindfulness, is to deal with what is, to look reality straight in the eye. To sit with it, breathe it in, hold its hand. To “wipe the dust from the mirror,” as the Buddhist saying goes.
When it comes to money, most of us rarely, if ever, deal openly with what is. We spend our entire lives chasing fantasies or running from our fears. Money is the eight-million-pound gorilla sitting in the middle of the town square. We bow to it, serve it, fear it, beg for its blessings, but we don’t discuss it. We behave as if money is our god, and we avert our eyes in deference.
In elementary school, we learn a thing or two about currency. We’re taught how to make change from a five and how to figure sales tax and tips. In middle school or high school, perhaps we take a home economics course that shows us how to balance a checkbook and manage an online bank account. Lesson complete. Whew.
The Simplest Truths About Money
We don’t learn the simplest truths about money itself — such as its nature and how it grows. In fact, many people are actively discouraged from learning. We are taught that money is private. It’s rude to bring it up. Casual questions from a child, like “How much did that cost?” and “How much do you earn?” are met with admonishments, as if the child had just asked, “Why are you so fat?”
Most adults treat money as a private topic, one they are uncomfortable discussing, and children learn that discomfort, not the reasons for it. They are left to piece together the “truth” for themselves. They shuffle past the giant gorilla every day and create their own mythology about it. These myths are based largely on emotion rather than knowledge.
It Doesn’t Have To Be That Way
I was extremely fortunate as a child. My economics education started early. Conversation at my family’s dinner table was different from that at my friends’ tables. We talked about finances. We talked about taxes and investments. We talked openly about how much money my dad and mom made. It wasn’t a lot!
We talked about how much this pair of sneakers cost versus that pair of sneakers, and the relative merits of each. We understood limitations and trade-offs.
My parents walked me through their tax returns when I was nine. I bought my first stock that year, too. I was exposed to the simple what is of money, not the fears and secrecy. It’s no accident that today I find money fascinating and fun.
Many people are not so lucky. They absorb only illusions about money put forth by three main sources: family members, culture and media, and Wall Street.
All of us grow up absorbing our parents’ relationship with and feelings about money. Most of this learning is observational, not formal. Perhaps we learn, for example, to be afraid of talking about money because money makes people fight. Or that money causes anxiety. Or that earning a lot of money is a game we must try to win. We learn these beliefs before we know we’re learning. That’s what makes them so difficult to untangle later on.
When we are formally taught about money within our families, these lessons are usually colored by beliefs inherited from our grandparents or great-grandparents. Many of these beliefs about money are rooted in simple pleasure and pain, in attraction and aversion.
The Buddha observed that life is suffering. That is, life inevitably confronts us with pain and discomfort. When it does, we often react reflexively to try to remove the causes of pain and increase the sources of pleasure. Neither of these solutions are lasting, however, and so our efforts end up generating more pain in the long run. Out of this endless cycle, suffering is born.
Cultural and Media-driven Illusions
Our culture’s all-time favorite illusion is that consumption leads to happiness. This illusion has always had its devotees, but today’s omnipresent media grinds the message into us so relentlessly that many of us never think to question it. We are conditioned, from cradle to grave, to consume.
I remember my son discovering catalogs when he was only six. One day he said, “Dad, let’s sit down and read this together.”
I said, “There are no good stories in there.”
“No, but I want to show you what I want,” he said.
So it begins.
A certain level of material comfort makes life pleasant and relieves anxiety, but once we’ve achieved that basic level, more stuff doesn’t make us happier. Nonetheless, one very healthy growth industry in America today is self-storage facilities. We own so much stuff we can’t fit it in our houses.
Nicer stuff doesn’t make us happier, either. Upgrading our car’s grille emblem to a pricier one gives us maybe a fifteen-minute buzz of pleasure. After that burst, our happiness resets to its default level. A thousand-dollar watch might be one or two seconds per year more accurate than a seventy-nine-dollar watch. How much value do those two seconds add to our life?
Even if we’re cynical about the claims of advertising, we can easily fall prey to the illusion that the popular media is a reliable source of truth and information. It isn’t. Sometimes the financial media genuinely tries to inform us, but it is always trying to capture our attention and keep it captive. It does so on behalf of its advertisers, who are always selling something.
At the same time, the media is also always selling something else: itself. And besides sex, the most reliable way to get the public’s attention is fear. Most media stories about economic matters are intended to scare us — note the tense background music and flashing graphics to keep us clicking the mouse to learn more.
Bad news = good copy, but the media’s pursuit of ratings gains can unfortunately drive short-term market movements. Anyone with a teaspoon of common sense knows that nothing can make an established company like Procter & Gamble lose a third of its value in half a minute. There was obviously a mistake. The stock market had to bounce back, and in this case, it recovered almost entirely by the end of that same day. But that’s not the tack the media took. Dire tones were employed. Average people who owned pretty much any blue-chip stock wanted out after hearing the latest, breaking news. Those who actually did get out regretted it an hour later.
The market responds to our faith in its resilience. Fear undermines that faith, so by selling fear the media retards recovery. As for me, I take the simple route. I reject daily freneticism. I trust that even big issues will resolve themselves in good time. I choose to believe that the market will improve. I don’t know how or when it will happen, but when I’m doing long-term income planning, that’s all I need to know. Thus far in history, panicking out of the market has never worked. Not once.
The media doesn’t only sell fear. It also sells excitement and trendiness. That is how stocks can skyrocket to crazy-high levels virtually overnight. As Warren Buffett famously said at a recent shareholders meeting, “The market is a psychotic drunk.” The media, it seems, is its drinking buddy.
I came into the financial management business almost twenty years ago, and I can’t remember a single time when the media’s hyperbolic approach has helped the everyday investor.
Fear shuts down our higher thought processes and puts the primitive “lizard brain” in charge. The lizard brain is all about survival and attacking immediate threats. It does not possess long-term perspective or use thoughtful analysis.
When the media sells us fear, we don’t have to buy it.
Wall Street Illusions
When we do buy in, Wall Street proceeds to take that fear and run with it to the bank by selling us investment products designed to salve our fears. Even when the economic news is bullishly enthusiastic, fear still does the selling: the fear of missing out on a hot market trend. Wall Street spins out newfangled mutual funds and complicated exchange-traded funds every year, not because these edgy new investment products are truly beneficial, but because it knows we’re too afraid not to buy them.
Wall Street gets paid on every transaction, so its incentive is to keep the client buying something and to keep the money moving. The public suffers on both ends, and as an added bonus, they pay Wall Street to create the next product to sell. Loss for the average investor is turned into opportunity for Wall Street.
The point is not whether any particular financial product is good or bad. It’s that the client doesn’t usually know what he or she wants or needs. Wall Street is aware of this and relies on emotion to entice clients into choosing products. Wall Street knows that people are hardwired to run away from pain and run toward pleasure. On that basis, new products are focus-grouped to determine, “Will this sell today?” rather than, “Is this good for our investors’ long-term portfolios?”
All the tailored suits, the sophisticated financial jargon, and the oil paintings of hunting dogs conspire to create the illusion that staid and responsible money managers are taking care of their clients. But in many cases people are being taken advantage of.
Of course, Wall Street professionals aren’t inherently evil. Many are sincere and well-meaning. Few intend to cheat customers, but when a client walks in the door looking for “safety” or “higher returns,” they will sell the client what he or she wants without necessarily knowing what that person needs. They are salespeople in the business of selling financial products, just like car manufacturers or restaurateurs sell their products.
Becoming A Wise and Thoughtful Shopper Without Illusions
People, in turn, have to be wise and thoughtful shoppers. We need to develop a simple financial plan and stick to it, rather than gobbling up every new product that Wall Street creates to satisfy shifting public appetites.
To understand money’s true role, we need to empty our cups of all the nonsense and misinformation we’ve been fed in our lives. Before we can approach money sanely and mindfully, we must break free from the illusions that have hypnotized us since childhood.
©2017 by Jonathan K. DeYoe. All Rights Reserved.
Reprinted with permission of the publisher,
New World Library. www.newworldlibrary.com
About the Author
Jonathan K. DeYoe, CPWA, AIF, is a California-based financial adviser with twenty years’ experience and a longtime Buddhist. In 2001 he founded DeYoe Wealth Management, which works with families and institutions. His blog can be found at happinessdividend.com, and you can follow him on Twitter @HappinessDiv.