To put it simply, having a money philosophy is to know the 'how' (much money is enough), the 'why' (is money important to you) and the 'where' (will you spend it). It should ideally work like this. We all have our goals, both short term and long term, and in most cases, we need money to realise them. In that sense, money is just a means to an end and not the end itself as a lot of us make it out to be. Money, according to well known personal finance writer, Dave Ramsey, is only good for 3 things - creating wealth, having fun with and giving away. I'd largely agree with him. Therefore all we need to do is figure out what our goals are, and then allocate our spending patterns accordingly in the 3 categories above mentioned, the composite result being our money philosophy.
For example, my long term goals involve retiring from active corporate life latest by 50 to pursue interests in the arts, a house in the suburbs of Kolkata and a small independent business of my own. To achieve this over the next 20 years or so, I would therefore need to use most of my disposable income to create as much wealth as possible to take care of my family's future needs as well as to invest in my business idea. Using my money to have fun would therefore sadly have to occupy a much smaller piece of the pie. How this pans out is, of course, open to conjecture and only time will tell of its success or failure.
But having a philosophy of money, and importantly, internalising it, egenders a clear thinking and an internal peace. It helps to filter out all the money noise we hear all around us everyday. " Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like" said Will Smith, very sagaciously, I might add. Having a philosophy in place helps us take a step back from spending money in unproductive areas, areas that will get us no further to our goals, and help to keep us grounded.
Its hard not keeping up with the Banerjees, but the philosophy of money can make a certain contribution to educating us all and helping us remember that the measure of all things must always be human values and not 'stuff'.
Cheers!
Abhishek.
2 comments:
How very true ! When I introspect, I rarely have fun by splurging money. So I make money just for two reasons - To provide for my family and give it away. So technically, I should retire when there is "enough" money for my family to survive. The problem is the " enough" is a moving goalpost !
Very thought provoking. Atleast you know what you want to do after you retire from the corporate race. Fully agree with Cogito, human nature i.e. its never enough is what makes it a moving goalpost. Suggest we continue this over some champagne this weekend that I just brought back (not splurging :o)) Cheers mate.
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