The Big Cincuenta

And this one makes 50.

“Well, that escalated quickly,” you say.

And I applaud you for the reference. Now, after having sucker-punched my fine readers with half-a-hundred essays, I thought I’d use this opportunity to break from tradition and share some very brief FinanciaLibre FL-osophy on the role of money in life.

The Big Cincuenta

Economics is pretty explicit about money being a medium of exchange, a store of value, and some other stuff that is all well and good and – from a day-to-day perspective – useless. It’s true enough, but it doesn’t really get us anywhere.

That’s because it doesn’t describe what money really means in life, and it doesn’t really imply what we ought to do about it.

I’ve said before, and I repeat here, that I view money primarily as a tool to modulate happiness. This money orientation applies neatly to lots of us in wealthy and privileged first-world countries like the United States. And it probably doesn’t have much merit as a working definition in some other parts of the world where daily survival remains a primary goal for some people.

Which, without trying to sound preachy, means virtually anybody reading this has it pretty damn good. The fact that we’re even able to concern ourselves with the intersection of money and happiness, or hedonics, or hedonomics, or whatever we’d like to call it, means we’ve already won the lottery in life. Which means we’re fortunate enough to have money play a very, very minor role in the quality and nature of the lives we lead.

And that, to me, suggests we need to take a very skeptical view of concerning ourselves too seriously with what I term “marginal money matters.” If financial choices or interventions or schemes are not fairly important or large, then unduly concerning ourselves with them can result in slightly better financial results at a cost of lots and lots of worry. In other words, if we’re not careful with how we handle money matters in these privileged lives of ours, we can dramatically erode life quality in an effort to ever-so-slightly improve our balance sheets. Which is probably not very smart.

So, if we view money as a tool to modulate happiness, it’s important to recognize both sides of the – ahem – coin. On the one side, we have the straightforward imperative of obtaining more money since, all else equal, more money seems to improve the odds and depth of life satisfaction. But on the other side, we have the admonition against forsaking the accumulated benefit of money we already have in the pursuit of yet more. When we become preoccupied with gaining more wealth we can lose sight of how good we’ve already got it.

Where’s the dividing line? When is enough really enough? How do we know when a little more is worth the effort (and “happiness” cost) to obtain it?

Conventional economics has some pretty sweet and useless answers here as well. You know, expected costs and expected gains, marginal this and incremental that, and probably a bit of hand waving when it comes to the complexity of happiness.

Happiness is a messy subject. And, when it’s paired with money, it just gets messier.

So what do we do about all this?

I suggest a simple and robust strategy. Allow an amount of worry and concern and stress in money matters commensurate with money’s importance in your life’s overall “results.” This is a personal thing to do, and nobody can tell you how important money is to you. But you probably have a pretty good intuition about it. And, as you think deeply about the topic, you might come to a realization that money isn’t all that big a deal when it comes to the quality and nature of your life. And so you might identify the same simple and robust strategy I advocate here when it comes to most money matters, and especially the marginal ones: Don’t worry. Be happy.

Cheers, Luchadores. Much love and peace, yo. 


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