Why don’t we talk more about money? We complain about it often enough, but as conversation, nothing summons up boredom, embarrassment and helplessness like money. To be clear, this is not an anti-wealth talk. I’m asking us to think more about money and ourselves without casting judgment on wealth itself.
As seniors, you are beginning a lifelong relationship with the most mundane internal monologue of adulthood. Like the animated house in D.H. Lawrence’s “The Rocking-Horse Winner,” we tell ourselves: “There must be more money…there must be more money.” But how do we wrap our heads around the constant demands made by an acultural, apolitical, virtual substance? After all, money, whether seashells or pressed metal discs, is merely an accepted method of payment, a transferable symbol of value. It is an imaginary substance; it is worth what we believe it is worth. In David Mamet’s Heist, a bank robber says, “Of course everyone wants money. That’s why they call it money.” Money has universal importance in our lives, yet it eludes definition.
My own experience with money has been all over the map, so I too remain confused. My single mother was on welfare when I was born, and 21 years later I banked more in Christmas bonus on Wall Street than I would ever make in a single year of teaching. Mostly through luck, I’ve known the giddiness of eating in four-star restaurants as well as the embarrassment of not being able to pay my rent in college. I’ve flown in private jets and ridden on all-night Greyhound buses. Money has made me feel free and special, as well as frightened and powerless.
We live in systems of huge markets that obsess about money’s speculative value. In his book The Age of Turbulence, Alan Greenspan uses the word “psychology” abundantly; our economy, the world’s largest, moves principally according to our fears and desires, he suggests. Stock prices reflect the future value that we think companies possess. When I was on Wall Street, I packaged mortgage-backed securities, huge bundles of promises to pay home mortgages. Someone weighed the probability of these promises coming good. Someone insured this estimate. And someone bought these virtual promises. In 2006, a mountain of these promises brought the U.S. economy to its knees.
Starting without much of a notion of what you want from this virtual substance puts you in the position of chasing money. And chasing is a frightening, anxious business. Take the word of three of my college friends, self-made multimillionaires, whom I interviewed for this talk. I asked them to complete this sentence: “To me, money is…” Stephen said, “never a priority. Don’t make it your goal. Be passionate about something, become the best in your field, and the money will be a happy byproduct of your labor.” Will said, “a sword. It has no moral code. It’s dumb in both senses (speechless and unthinking). Someone can pick up a sword to be violent. Another can use the sword to do good. The sword doesn’t care.” And Tom said, “the public domain. After you have enough to live well, the rest belongs to society. Think of Carnegie. Making money feels good; giving money away feels amazing.”
Consider that you have three main expenses in your adult life: a mortgage, your children’s education, and retirement. What does the extra money represent? More legroom on an airplane? Better hair-care products? More goji berries in your organic Amazonian shampoo? As Tom Hanks said to a young George Clooney, who was on the brink of stardom: “Remember, George: You can only eat so much steak.”
Tony Wagner, an education expert from Harvard, spoke to the faculty this year. He mentioned that in his research in Finland, which has the world’s best-performing educational system, the students, nearly all middle class, stunned him when they spoke of aspiring to be their parents’ socioeconomic equals as members of the middle class. A bigger house or car didn’t really interest them. An American discussion of a child’s future without explicit aspirations is hard to fathom. Are you prepared to make modesty part of your own discussion with yourself about money?
In counterpoint, a friend’s father, a prominent lawyer in D.C., heard me in high school talking of my big plans, and he stopped me cold. Nearly every rich guy he knew “got on the treadmill,” he said. “What treadmill?” I asked. The treadmill of expenses that you rack up with expectations of even more wealth in the future. The second sports car, country club membership, or expensive hobby—expenses will always sponge up money you’ve not yet made.
Let me say something heartening: If you want to become wealthy, it’s pretty easy. Stanley and Danko’s bestseller The Millionaire Next Door, calls out the two real builders of wealth: patience and discipline. Get rich slow. If you want to become wealthy (which I define as meeting the above three lifetime expenses while being able to go out to dinner and take an outrageous annual family vacation), then find what you love to do, and save as you go! You don’t need a big income to accumulate wealth. With patience and discipline, even a high school teacher can become a millionaire on paper. At 18, you have time on your side: Every dollar you save now, you will get back fivefold at retirement. You’ll more than likely have many opportunities to generate an income that allows you to save. Now that we’ve gotten that fear of “I’ll never be wealthy” out of the way, I have one more suggestion.
Let’s talk literacy, financial literacy. Before you finish college, you should learn the value of a dollar (virtual as it is), and so you should read up on the banking system, the markets, how a mortgage works, and the credit system in general. You don’t need to become an econ major; you just need a primer in financial literacy. Learn “the time value of money” and the power of compounding. Understand that there is no such thing as a free lunch: A credit card company that has incentivized you to use their card has already passed on the cost to the merchant, who has already passed it on to you. Speaking of credit cards, they exist as legal usury, that is, lending at exorbitant rates with harsh fees. Do not accept credit card offers by mail or those that promise a free T-shirt if you fill out this form while standing in the cafeteria at college. If you do get a credit card, pay it off in full every month. I know smart adults who don’t really understand how their mutual fund or credit card works and never read the fine print. No amount of ingenuity or high-mindedness will do you good if you leave college and don’t understand the contours of the playing field.
The bottom line is to devote some thought to what money means to you so that you never live in fear of it. Become financially literate. Expand your definition of wealth to include modesty, slow wealth, and psychic income (like spending time with loved ones). Once educated, set good habits and then think of money as little as possible. If you make a metric ton of cash, go all Carnegie on us and redistribute it for the public good. And never let money silence or confuse you. It’s just a concept—admittedly, a big concept—that you can and should master on the way to a fulfilled life. That’s the real bottom line.
Thank you.
–Tarim Chung, Chair, English Department