—Bryan P
The Biggest Lies About Money
My poor dad was a great man, an educated, hardworking, honest-to-a-fault teacher and public servant. Yet when it came to money, he was a liar. When he talked about work, teaching, and life, he often said statements like, “I’m not interested in money.” Or, “I’m not doing it for the money.” Or, “Money is not that important.” Every time I heard him make such statements, I would shake my head. To me these were lies. One day I asked him, “If you’re not interested in money, why do you accept a paycheck? Why do you often say, ‘I’m not paid what I’m worth’? Why do you look forward to a pay raise?” He had no reply.
Like my dad, many people are uncomfortable with the subject of money. Many people lie or live in denial about the importance of money in their life. It is often said, “Never discuss sex, money, religion, or politics.” These subjects are too volatile and primal in nature. That is why most people talk about the weather, sports, what is on TV, or the latest diet fad. These things are superficial—we can live with or without them. We cannot live without money.
Many people subscribe to the saying we discussed in the Introduction of this book, “The love of money is the root of all evil.” What they fail to recognize is that, in the context of that saying, money itself is not the root of all evil. Many people believe that money has the power to corrupt, and it can. Many people believe that if kids knew how to make money, they might not want to get a good education, and that, too, is possible. Yet living life takes money, and earning money is one of the facts of life. Most people spend most of their waking hours, and hence their lives, working for money. Many divorces and family breakups are caused by arguments about money.
Keeping people ignorant about money is evil because many people do evil things for money, such as work at a job they do not like, work for people they do not respect, marry people they do not love, take what is not theirs, and expect someone else—like their family or the government—to take care of them when they are capable of taking care of themselves.
Obsolete Ideas
The idea that money is not important is an obsolete idea.
Reader Comment
King Solomon, circa 850-900 BC, the wisest and wealthiest man of his age, wrote in Ecclesiastes 10:19, “A feast is made for laughter, wine will make you merry, but money answers all things!”
—drmlnichols
In very simplistic terms, humans have evolved through four basic societal ages. They are:
1. The Hunter-Gatherer Age: In prehistoric times, money was not important. As long as you had a spear, nuts, berries, a cave, and a fire, your needs were met. Land was not important because humans were nomads and followed the food. People lived in tribes with very little hierarchy. The chief did not live that much better than anyone else. During this age, there was only one class of people, and money was not important.
2. The Agrarian Age: Once humans learned how to grow crops and domesticate animals, land became important. Barter was the medium of exchange. Money was not important because even if you didn’t have it, you could still survive. During this era, kings and queens ruled the land. The peasants who used the land paid taxes in the form of crops and animals to the family that controlled the land. The words real estate literally grew from the term royal estate. That is why we still use the word landlord in reference to the person to whom we pay our rent. During this age there were two classes of people: the royals and the peasants.
3. The Industrial Age: I believe the Industrial Age began in the 1500s. Christopher Columbus, seeking an ocean passage to Asia, defied the idea that the world was flat. Columbus was not looking for the New World, as many schools teach. He was looking for trade routes for resources like gold, copper, rubber, oil, lumber, furs, spices, industrial metals, and textiles, which were essential to the Industrial Age.
People moved off the farms and moved into the cities, causing a whole new world of problems and opportunities. In the Industrial Age, rather than the peasants paying the king, the new capitalists paid the employee. Instead of land, the new capitalists owned corporations.
Corporations were formed primarily to protect the rich, their investors, and their money. For example, before a ship sailed for the New World, the rich formed a corporation. If the ship was lost and sailors died, the rich were not responsible for the loss of life. All the rich lost was their money.
Today, it is more of the same. If a CEO runs the company onto the rocks, loads the company with excessive debt, pays the executives millions in salaries and bonuses, or steals the employees’ retirement funds, the employees lose everything, but the rich are often protected from the losses and liabilities—even the crimes.
Even during the Industrial Age money was not important. That’s because the rule of thumb between employee and employer was a job and paycheck for life—job security and financial security. For people of my parents’ generation, money was not important because they had company and government pensions, a house that was paid for, and savings in the bank. They did not need to invest their money.
All that changed in 1974, when the U.S. Congress passed the Employee Retirement Income Security Act. This act led to what we know as 401(k), IRA, Keogh, and other retirement plans. In 1974, money became important, and people had to learn to manage their own money or die poor, living on Social Security, as my dad did after he lost his government job.
4. The Information Age: We live in the Information Age. In the Information Age, money is important. More specifically, knowledge about money is essential in the Information Age. The problem is that our educational system is still in the Industrial Age, and in the minds of most intellectuals and academics, money is not important. Most of these people are operating on old, outdated, and obsolete ideas of money. But money is important. Today money is a key aspect of life. Today financial security is more important than job security.
Reader Comment
Up until very recently, I have always equated job security with financial security; I never thought about it any other way than that. Now I know better.
—jamesbzc
Financial Education
Today, it is essential to have three different types of education. They are:
1. Academic education: This includes the ability to read, write, and solve basic math problems. In the Information Age, one’s ability to keep up with changing information is more important than what one learned yesterday.
2. Professional education: This is knowledge of a trade in which to earn money. For example, one goes to medical school to become a doctor or to a police academy to join the police force. Today, it takes much more professional education to be financially successful. In the Information Age, professional education is essential to job security.
3. Financial education: Financial education is essential to financial intelligence. Financial intelligence is not so much about how much money you make, but how much money you keep, how hard your money works for you, and how many generations you pass your money on to. In the Information Age, financial education is essential to financial security.
Most school systems do a pretty good job with academic and professional education. They fail when it comes to financial education.
Why Financial Education Is Important in the Information