Perspectives on money

[jacob]

We've talked about the "tap water" perspective on money before wrt the ERE Wheaton stages. Something @Walven wrote made me realize just how important one's perspective on money is.

She really thinks of a credit limit as being money that she owns.

I've never heard that one before. For most, [money] is the water that the fish swim in. Most don't see it, don't choose it, and aren't aware of any other way.

Let's make a list:

• "The purpose of money is to be spent." This is probably the most common perspective. "Monkey earn. Monkey buy."
• "You're as wealthy as your credit limit." (See above)
• "The purpose of money is to put it to work and make more money for you so you can increase the amount of money you have." I saw that in the financial world where money is basically used for keeping score. It's a metric to be improved for the sake of improving it.
• "The purpose of money is to put it to work so you don't have to." This perspective blew my mind back in 2002ish or so. You've probably seen the drawings with the arrows in ERE book chapter 7.
• "Money is like tap water". Money is an unlimited resource for all practical purposes (as it relates to your lifestyle). It doesn't mean you have billions but that money is no longer the limiting resource in terms of what you can do. (It's usually skills, connections, or creativity)

What other perspectives are there?

[ertyu]

"Money is security; you're only as safe as your stash"

[Henry]

FU money.

[zbigi]

"Money is security; you're only as safe as your stash"

+1. But also - "It can all disappear one day and there's not much you can do about it".

[7Wannabe5]

I'm actually seeing a bit of a trend in my aging, female, towards liberal-progressive peer group towards spending money rather than emotional/social skills and capital. IOW, they're thoroughly burnt out on directly caring for other humans, whether in personal or professional setting, so they are going a bit Harry Browne in their old age, throwing money around to exit their former social responsibilities. One of these women actually told me that she was self-aware doing an experiment to see how many problems she can simply solve with money, thereby reserving her emotional energy for self-care and self-actualization.

• Money can solve many problems.

• Money can free you from personal or greater community social responsibilities. You no longer have to actively care. You can just Zelle.

An example of what I mean, furthering the Harry Browne mention, would be the typical sort of divorce agreement in which the mother takes more custody and personal responsibility, and the father chips in more financial capital in the form of child support or maybe even alimony. What I see is women actively reversing this after doing the "optimizing" level math, often the hard, experiential way. As in, "Yah, no. I'll just bill some more hours, and you can figure out dinner, the dog, the recycling, and Xmas family plans. "

[Scott 2]

1. Money is a burden. I know a woman who upon receiving an inheritance, immediately spent it on jewelry to give away to family, among other things. She always lived on her last dollar and the pressure of having was too much.

2. Money is only for the next generation. Again, an inheritance situation. This time a trust. The woman needs the trust money, but instead is doing her best to preserve it for her son. To the point of considering overnight work at hotels, for $20/hr. Her generosity with others makes life much harder.

3. Money cannot be retained. You'd better spend it before something or someone else takes it. I've primarily read about this in Matthew Desmond's books on poverty. There, the drains are unbounded - family, landlords, grifters, etc. Better to get yours while you still can, even if the decision looks insane.

[Henry]

3. Money cannot be retained. You'd better spend it before something or someone else takes it. I've primarily read about this in Matthew Desmond's books on poverty. There, the drains are unbounded - family, landlords, grifters, etc. Better to get yours while you still can, even if the decision looks insane.

Probably a psychological result of "it's expensive to be poor." Which is telling as it seems to indicate that this demographic is not a participant in the "enough or not enough" dichotomy plaguing the vast majority of human beings.

[7Wannabe5]

@Scott2:

I suffer somewhat from an odd version of (3), because my rule-of-law, moderately frugal, upper-middle-middle-class salaryman father made good money, but my rule-of-the-jungle mother who exuded the spendaholic symptom associated with bi-polar disease could spend it even faster than he could make it. And they would constantly bitterly fight about money in very large vocabulary spewed at high volume Elizabeth Taylor/ Richard Burton manner.

This may be why I have the tendency to almost instantly convert savings through frugality into free time. Nobody can take the free time you earn/save at the margin away from you. I might even argue that although this flavor of frugal practice is personally dysfunctional, it might actually be a better way to prepare for the coming collapse.

[ertyu]

+1. But also - "It can all disappear one day and there's not much you can do about it".

post-socialism trauma survivors unite

[jacob]

post-socialism trauma survivors unite

During my semi-frequent visits to Poland 20-25 years ago, I remember being told that people preferred to spend their money as quickly as possible [typically on western luxury import goods] rather than lose it to inflation. I suppose this falls under the secure-storage framework. If money is not storage of security, then it's better to exchange it for something that is or simply enjoy it ASAP.

[urgud]

Money, or rather capital, is a limited resource, so spend it wisely. Assuming I work full-time for 40 years (from now until the officially designated retirement age) with no real (= after inflation) wage increases, it comes out to about 10 million DKK or ~1.5 million USD in after-tax income in present day value, in other words, the total value of my remaining human capital. Let's assume instead that I want to retire in 20 years, so it'll be 750k USD instead. Now, it is up to me to manage that limited resource in a way that will sustain me both now and in the future. This has to cover both housing, consumption, goals and investments.

So, the 750k-1.5m is all I've got to "play with", so to speak. I have to figure out a sustainable housing situation that minimizes the drawdown on this amount. A rent-controlled rental apartment is probably optimal due to no/low cost of capital. Alternatively, a cheap housing co-op apartment.

Some people borrow from their future selves, taking up debt and paying the associated interest costs. In doing so, they get access to more of the use value of that money now, but obviously pay more, later.

Conversely, it also shows the importance of saving and investing early and aggressively. It's the only way of extending the limited resource. (Compare this with the popular FIRE mindset of "why don't you just get a raise?")

[ffj]

At a certain point having to always think about the best way to manage your money is a burden. Right now in front of me I have a grand in cash on my desk that needs to go somewhere other than an easy picking for a thief. Do I invest it? Spend it? On what? Donate it? Who is worthy enough? Being a good ERE'er I don't have debt so what do I do with it? These decisions take up way more bandwidth in my brain than I like.

When you don't have to spend money, have made your life very efficient in regards to finances, and don't want to be wasteful, these small decisions are hard for some reason.

[mathiverse]

3. Money cannot be retained. You'd better spend it before something or someone else takes it. I've primarily read about this in Matthew Desmond's books on poverty. There, the drains are unbounded - family, landlords, grifters, etc. Better to get yours while you still can, even if the decision looks insane.

Oh man, this is my dad's perspective. I hate it. This person is a money pit if you ever try to help them by giving them cash or valuable items (eg a car, etc) because they don't think anything will be around longer than a few months, so maintenance, savings, or regular certification paperwork (eg car insurance, vehicle registration renewal) won't be prioritized like they ought to be and then breakdowns and repossessions ensue.

[Laura Ingalls]

Very interesting topic.

As someone who has struggled with anxiety over money most of my life I think I currently am the most mellow I have ever been about it. For the first time in my life all are income is unearned too. Our income robustness score is terrible

I often think that if the SHTF that we are so much better situated that most. The exception is health/fitness. I can be hike the Camino fit. I can’t be Navy Seal fit that ship has sailed. I can be resourceful and know how to fix things, garden, forage. I have pretty good social capital.

My aging mother and IL’s all have their own perspectives on money.

My mom keeps fixing her house like she is going to live forever (which is mostly good). She spends the bulk of her monthly pension and social security. She has a small RMD each year and it serves as her church/charity fund. The rest just sits there. No interest in giving to her kids or grandkids with a warm hand.

My MIL seems very afraid of death and overly fixated with legacy. Every
nicknack in her house is special. She is convinced that my SIL is going to spend any inheritance she gets in 47 seconds.

FIL just can’t resist a good deal. He wanted to looked at houses in nearby small towns to buy. He couldn’t even clarify if it was a place for him to live or a rental property? I think he thinks we need a house even after we tell him that zero houses are the amount we want at the moment. He has like 20 cars.

[loutfard]

- "The purpose of the other's money is to pay for _my_ comfort." Jealousy as psychological pain killer. It shuts up the cognitive dissonance of a completely untenable "The other's money is mine because <insert batshit crazy crooked reason>". Applies whatever the ideological framework-du-jour.

[black_son_of_gray]

It's also worth bearing in mind the messiness of people: I imagine that it is quite common to have multiple, even contradictory perspectives about money pretty much all the time.

E.g.: "Money is a store of value!" vs "Inflation is eating it all away/ Cash is trash!/It could go away at any time."

"Money is optionality / FU money" vs. "Having to decide what to do with it is such a burden"

And on and on... Almost all of these perspectives come in dichotomies, both sides of which can "feel true" in a given context.

[IlliniDave]

I sort of look at money as a charge on a battery--potential to be tapped as needed, generally to accomplish some sort of "work". Hopefully it is a self-charging battery if invested prudently. Not terribly different from the tap water analogy.

[loutfard]

- Money as a store of sweat. If working poor, one's own sweat. If not working poor, other people's sweat.

[Henry]

Money, or rather capital, is a limited resource, so spend it wisely.

I think the ability to see money as capital is a demarcation point in one's own perspective as well as with those who can't/don't see money as capital. I don't think it's purely finacialese. I think it's indicative of perspective.

[Jean]

Money Is a way to keep tabs with society. If I have savings, I contributed enough, I a have debt, I didn't.