Self Employed or Bust

How Do You Think About Money? (continued)

July 31, 2008 – 7:00 am

In my previous post, How Do You Think About Money, I presented two hypothetical women who followed two different paths in life and then posed a few questions. I asked you to think about the questions and I hope you did because my own interviews garnered some interesting results.

To recap – one woman leads a modest life, raises a family and devotes personal time to charitable efforts including a very nice contribution (given her income bracket) to her church on her passing. The other woman also raised a family but eventually started her own businesses and formed charitable partnerships through those businesses. She also started charitable foundations. Finally, she ultimately left a sizeable donation to a charitable organization on her passing.

Let’s address the questions I then asked.

1.      Is either person better, kinder, more giving of themselves than the other? If your answer is in line with the majority I’ve interviewed, you likely answered no. While opinions can vary slightly, the overwhelming consensus is that both women did good things for others with their lives. Both sacrificed in their own ways to help their communities.

2.      When Susan goes to sleep at night and when she ultimately dies, do her charitable acts keep giving? I answered this one for you and the answer is, no, not really. At best, only a little. In a manner of speaking, she does leave behind a legacy as her children will likely carry on her tradition to some greater or lesser degree. But when Susan is asleep, she isn’t handing out blankets or feeding the poor. Her giving largely depends on her being alive, conscious and actively working for the good of others.

3.      When Cheryl goes to sleep at night and when she ultimately dies, do her charitable acts keep giving? Yes. Cheryl’s financial success has allowed her to create businesses with charitable partnerships as well as a foundation which continues to work for the good of others whether she is asleep or awake, alive or dead. Like Susan, Cheryl passed her values to her children. If we give Cheryl’s kids the same benefit of the doubt we’ve given to Susan’s children, we can assume some of them will start businesses with charitable partnerships.

4.      Susan led a humble life and did not pursue personal wealth while Cheryl did. Is Susan a better person? And here’s where the answers started to show the first signs of an imbalance. While most folks answered no, some felt the need to elaborate further and say she did invest more of herself directly in her charitable efforts. The point lost on some people I interviewed is that working harder and longer for others isn’t the best thing if working smarter and more efficiently helps more people.

5.      Susan led a humble life and did not pursue personal wealth while Cheryl did. Is Cheryl a greedy person? While most answered no, the answers weren’t as cut and dry as before. Some felt Cheryl was greedy for pursuing wealth (despite her tremendous charity efforts). Others, because she didn’t invest enough time with her children. Both arguments are odd because I never mentioned that Cheryl started businesses in the interest of attaining wealth. Perhaps she was doing what she loved and reaped rewards in spite of herself. Also, I made it a point to emphasize that her business success allowed her the freedom to spend time with her children and work on her charitable interests.

6.      Who do you like more or emotionally connect with, Susan or Cheryl? Guess who most people picked. Susan.

The results didn’t come as too much of a surprise to me. As I mentioned in The American Wealth Gap, 80% of us own only 16% of the wealth in the US. I don’t think that has anything to do with education or ability. I honestly believe that the culprit is more deeply rooted in the way we think. My questions helped validate that as people made wholly emotional decisions in their answers the closer we got to number 6.

On at least some level, most of us associate the pursuit of wealth with greed. Cheryl must have been greedy because she went back to work rather than being a stay at home Mom. She must have been greedy because she started multiple businesses that made her filthy rich. On another level, we associate martyrdom and self sacrifice with goodness regardless how small the comparative impact. Susan, we feel, was the self-sacrificing woman who nurtured not only her family but her community as well. She gave of herself completely. Somehow that just feels better; nobler. Why?

Folks, at the end of the day, a homeless man would rather have a home than a blanket. A starving man would rather have 3 square meals a day rather than a sandwich for lunch. A woman down on her luck would prefer a job over a handout. All of Susan’s individual acts are a darned sight better than no good deeds at all, but if you had it in your power to do more, wouldn’t you feel even better? I assure you the recipients of your generosity would.

Wealth does not represent an automatic membership in the greed club. A greedy person is going to be tight with their money regardless how much of it they have. I’d argue, in fact, that a greedy person with wealth is less stingy with his money than a greedy person without wealth. Why? Because at some level of income, it simply becomes fiscally sound to give up some of your wealth to charity for the tax benefits. The system practically assures the death of greed when one is wealthy whether they like it or not. Furthermore, if a person earns large sums of money through business, he is likely employing others and at least some of those others will be charitable with their money.

I hope this first set of posts on the way we think about money has started you down a more rational path. Wealth is not a bad thing. Pursuing wealth is not an act of greed. Good people do great good with their money. Just look at Oprah or the Bill Gates foundation if you don’t believe me. When it comes to charity, the only thing wealth assures you is the opportunity to do more than you could before you became wealthy. My mother in law, for example, would probably change the world for the better if she were wealthy.

If you wish to be successful in business, the first thing you need to do is change the way you think. And if you succeed? Well, when your mom or pastor tells you they are happy with your monetary contributions but would rather have more of your personal time, remind yourself that it’s the very time they’re asking for, time you’ve applied to your business success, that has allowed you to give so generously in the first place. You may never make them understand, but that doesn’t make them right, and it doesn’t make you greedy.

Stumble it!