The Book – Money for Life…How to Thrive in Good Times and Bad
Money for Life…How to Thrive in Good Times and Bad is a dangerous book – in a good way.
On the surface
it appears to be a personal finance book, and in a sense it is. It addresses such issues as how you manage your money and what you use it for. The consequences of your answers to these questions reach into every aspect of your life. And, if you follow the tenets of Money for Life, you find the magic of compounding working for you to create life-long wealth that you can pass along to your children and grandchildren, and even more importantly, you find yourself in a position to pass wisdom along to them as well.
So, in one sense, this is a very practical book, with tactics that help you to set achievable goals and measure your progress toward reaching them, not that much different in some ways than a thousand personal finance books that came before it and a thousand books yet to come.
Here’s the Difference
Money for Life…How to Thrive in Good Times and Bad is so much more than that, and therefore, so much more powerful than most of those other books. Money for Life demands that you look to the past in order to see a clear path into the future. It expects that you’ll remember that the Money Monsters and the Behemoths (you’ll find out what these whimsical terms mean as you read the book) work for you, and not the other way around. Most importantly, it challenges you to connect your decisions about your money to your philosophy of life. If you think deeply about the book as you work through the practical, tactical exercises, you’ll find yourself rethinking your relationship with money, and by extension, with the whole economy.
Aristotle, in his work Nicomachean Ethics, probed the question of what the ultimate good is. He had this to say about wealth: “The money-maker’s life is in a way forced on him; and clearly wealth is not the good we are seeking, since it is useful, only for some other end.” For Aristotle, the other end is the “good life,” which includes security and independence, as well as civic virtue and public service.
Positive Psychology
There is a modern strain of this kind of thought as well. It can be found in recent discussions of “positive psychology.” This is the term used by the American Psychological Association to describe the study of what makes people happy. A recent paper describes the progress that has been made in understanding “positive psychology”. The authors studied people who described themselves as happy, to find out if they had common characteristics. Using a combination of questionnaires, surveys, interviews and human subject reports, they find “…six overarching virtues that almost every culture across the world endorses: wisdom, courage, humanity, justice, temperance, and transcendence.”
The authors describe three robust, apparently universal empirical findings. For our purposes, the third finding is the most relevant. They write,
“[S]trengths “of the heart” – zest, gratitude, hope, and love – are more robustly associated with life satisfaction than are the more cerebral strengths such as curiosity and love of learning. We find this pattern among adults and among youths as well as longitudinal evidence that these “heart” strengths foreshadow subsequent life satisfaction.”
The View of Economics
This is quite a different view of people than that taught in economics! Economists start by assuming that rationality and self-interest are the best way of understanding why people make the decisions they make (as if people only made rational decisions!). Consumer choice theory assumes that people derive utility, (defined as well being, satisfaction, happiness, or whatever) only from consumer goods. Of course, most economists recognize that there are limits to this view, but nonetheless this is the view at the heart of most discussions of trade, and is not far below the surface in most other discussions. The economic point is that how you spend or manage your money can be thought of as an extension of your deepest self, your core values.
And this realization lies at the core of the Money for Life philosophy. When the choices you make with your money are in alignment with your deepest values, your money and the decisions you make regarding it are more likely to make you happy. Your money, and the Economy is serving you and the ideals you hold dear, not vice versa.
Jeffrey Reeves asked me to write this foreword a year and a half ago, and I told him I would have to think about it. And the reason I decided the answer would be “yes” is that Jeff and I are both ultimately on the side of Aristotle regarding the utility of wealth. The acquisition of personal wealth is well and good, and this book is an excellent guide to that pursuit.
Financial Self Defense
But Money for Life also serves as a financial self-defense manual. My daughter’s jujitsu instructor emphasizes the concept of situational awareness and the role it plays in preventing trouble. If you pay close attention to what is going on around you, you avoid problems. You can anticipate and prepare. The same can be said of your financial dealings. Prudent people can and do set aside money for contingencies. Money for Life helps you focus on what is going on around you, and plan for the best and the worst. Finally, Money for Life is a timely reminder that the personal and national economic gains that this pursuit engenders should be working for each of us in good times and bad and not the other way around. And that idea is what makes this book so dangerous – and so valuable.
John Jeffrey Zink, Ph.D., Economics
October 2007
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Aristotle. Nicomachaen Ethics. Terence Irwin, Ed. Indianapolis, Indiana: Hackett Publishing Company, Inc. 1985. p. 8.
Seligman, Martin E. P., Tracy A Steen, Nansook Park, and Christopher Peterson.“Positive Psychology Progress: Empirical Validation of Interventions.” American Psychologist. Vol. 60, No. 5, July-August 2005. p. 410-421 Most of what follows relies heavily on this article.
Ibid., p. 411
Ibid., p. 412