Sunday, March 20, 2005

Money, It's a Trip . . .

This is the Diatom I named "The Big Yellow Box". It's the first one that consumed so many pixels (almost 500 KB.) The name is a nod to our town company, Eastman Kodak.

It takes money to make money. This seems so obvious as to not need repeating. And yet . . . if you don't have much to begin with, it is difficult to acquire more.Most of us who work or who have worked know how quickly a paycheck appears to disappear.

Money is the most valuable commodity in the world. Everyone wants it; everyone needs it. Few can live without it.

You must value your money more than anyone else. Whole industries (and many livelihoods) are devoted to the sole purpose of separating you from your money. Capitalism can be defined as the process by which consumers are induced to purchase products they don't need with money they don't have. (I lay claim to this definition; I used it in a chat room last year and now I discover that it has popped up on at least 1 website.)

The whole "financial services" sector is devoted to earning money using your money, and if you don't have much they will be happy, nay, eager, to advance you whatever you think you need.

For many years, I was financially illiterate. The business page of the local newspaper may as well have been published in Aramaic for all the sense I was able to glean from it (and, I must admit, I didn't try very hard.) The death of my father changed all that. He had an extensive knowledge base of matters financial but, for reasons known only to him, chose not to share it. My introduction to financial lore began when I studied the types of investments that he had included in his portfolio. The investments had to be liquidated, but I learned from them.

In the fullness of time, I was invited to meet with a couple of advisers. One (in the employ of a major brokerage) encouraged me to place my money in a "wrap account" that would pay them 3% quarterly. I politely declined to be sheared so thoroughly. The other (working for a bank-affiliated brokerage) tried to interest me in a variable annuity (he never named it as such, but I had accreted enough knowledge by that time to know a turkey when I saw one) and I declined that also.

What I learned from these "advisers" was that they were glorified salesmen and that they would be working not for me, but for themselves and their companies. I don't begrudge them the wherewithal to earn their livings, but there are plenty of rich, lazy, and stupid people waiting to be fleeced; my paltry sum is as nothing to them, and I prefer to handle it myself.

I received my true education by visiting the library and browsing the financial section. I read Suze Orman. I read John Bogle, Burton Malkiel and Peter Lynch. I read selections from the "for Dummies" series. And I learned.

I encourage everyone who truly cares about their money to at least try this. If you do, you will learn much more than any "adviser" would wish you to know.

A Tale of Two Brothers: A Parable

A patriarch, who for many years had toiled in his fields, died and left his two sons a storehouse of grain. The brothers divided the grain evenly, and each took his share back to his farm. The older brother put most of his grain into storage, biding time until the season of planting, keeping out just enough to feed his family and livestock. The younger brother, foolishly believing himself to be rich, began trading his grain in the marketplace for material possessions, seeking to impress wealthier farmers with his improved standard of living.

When the season of planting arrived, the older brother sowed his field with a quantity of the stored grain, and at the harvest was rewarded with plentiful crops. The younger brother, having saved only a little grain, was forced to go to the wealthy farmers to borrow money with which to buy more seed, as he could not eat the goods he had purchased.

Eventually, the older brother prospered and grew wealthy, but the younger brother lost his farmstead to the wealthy farmers, for he had not been able to grow enough crops to feed his family and pay his bills.

Parable copyright Malcolm Mott 2005

May the sun shine on your crops.


sistercdr said...

Lessons learning. Deep sigh.

lamove04 said...

Dude!  This entry could have been written directly for me.  I am majorly dealing with money issues right now, partly due to an small inheritance.  I've read some of the authors you've mentioned, but am still stuck.  btw, there's a book I read: "The Secret Life of Money- Teaching Tales of Spending, Receiving, Saving and Owning" by Tad Crawford-- it has parables very similar to what you wrote.

Hope you're feeling better!  --Albert