Money: It’s Not That Complicated

‘The consumer is simply an income stream and exploiting that is the purpose of the banking organization.’ - David Mooney, a former JPMorgan Chase banker.
— Pound Foolish (2012) by Helaine Olen, p. 109.
[The Financial Literacy movement] is led by the very people who have the most to gain by society’s continued financial ignorance: the financial services sector.
— Pound Foolish (2012) by Helaine Olen, p. 199.

There’s been a recurring theme in what I’ve been reading and watching lately. From The Big Short to Pound Foolish to Four Horsemen to Requiem for the American Dream to Frontline's Retirement Gamble, the message is that the only reason money management is complicated and expensive is that we allow it be by believing what the financial services industry (aka Big Banks) tells us about it.

And it’s a big fat lie.

Money, like everything else in life, is only as complicated and expensive to manage as we let it be. And, like everything in life, the more complexity and obscurity there is, the more likely it is that we wait, second guess, procrastinate…the more we do nothing. Sometimes for months, sometimes years, and for others still, even decades.

But it doesn’t have to be that way. We can do things differently. The key is in developing the understanding that our difficulties are not attibutable to our lack of financial literacy

We need to redefine our relationship with money.

What money is:

  • A tool to help shape our lives
  • Security
  • Peace of mind
  • Flexibility
  • Independence

What money is not:

There are many things money can buy, but the most valuable of all is freedom. Freedom to do what you want and to work for whom you respect.

Those who live pay check to pay check are slaves. Those who carry debt are slaves with even stouter shackles. Don’t think for a moment that their masters aren’t aware of it.
I may not have owned a Mercedes, but I owned my freedom.
— JL Collins, The Simple Path to Wealth, p. 32.
  • Something to be chased at all costs
  • Something to be worshipped
  • A substitute for strong relationships
  • A goal in and of itself
  • Really yours if you have to pay for it

This redefinition / recategorization is key to understanding the “why” behind the activity we call saving. Many of us drown in the mechanics of it all and forget to consider the reasons we’re wanting to save in the first place!

Unfortunately, these mechanics are a smoke screen that leads us to: 

  • believe we need to incur debt to get what we want and to 
  • pay dearly for the financial services of those who we’ve been convinced know better.

The sooner we can see beyond the disinformation, the sooner we can start living life on our terms.

That’s why books such as The Simple Path to Wealth are so important, despite representing a tiny fraction of all money & investing books published every year. They remind us of why saving is such a powerful tool not only for the future but for how we choose to live our lives in the present.

JL Collins,  the book’s author and personal finance blogger, has been a saver/investor for decades. He’s kept his saving and investing formula simple and, as a result, he’s been able to live life on his terms for decades.

It's time to leave the hype and the fear mongering behind and pay attention to solid, BS-free advice from the one who coined the term "F-You Money".

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