The 10th Man

Abundance

May 16, 2019

I am on Facebook, and there is a lot of crap on Facebook. Even the non-political crap is stuff I just do not believe in.

For example, people say that you should spend your money on experiences, not things. There is some spiritual component to this that I don’t get.

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I like spending money on experiences (particularly travel), but I like spending money on things more. Clothes in particular. You feel (and act) differently when you are wearing an expensive suit and an expensive pair of shoes. People who make $150,000 a year and still get all their clothes at Target do this not out of frugality, but low self-esteem.

It is good and right to spend money on yourself now and then.

The other crap you hear on Facebook, and pretty much everywhere else, is that money doesn’t make you happy.

Oh yes it does.

It is not going to fix broken relationships, or compensate for your bad behavior, or cure your addictions, but buying nice stuff makes you feel good, and nobody should make you feel guilty about that.

What I want to talk about today is the concept of abundance, where there is always more than enough in your life. You have enough for the basics—food, clothes, a roof over your head. You have enough for some luxuries—a nice watch, a nice car, some toys. And you have enough that you can give lots of it away.

I’m sure you are familiar with the book The Millionaire Next Door. I hate that book. Anyway, the book implies that everyone should aspire to be a millionaire. No—everyone should not aspire to be a millionaire. For some people, it is simply not attainable, and you are going to annoy a lot of people in the process.

The goal should be to reach a state of abundance. Where you have more than enough for yourself, your friends, your family, and your charity—and you never have to worry about money. Abundance is a state of mind, more than anything.

The magic of abundance is that some people get there with $25,000 a year.

(For me, it took a lot more.)

     
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Hippy-Dippy

This is not some hippy-dippy essay about how you can be like Gandhi and own a pair of sandals and be happy. Lots of people who say they have enough are lying. Most people wish they had more.

Getting to a state of abundance takes a lifetime of work and effort. You have to do all the stuff we’ve talked about in The 10th Man before.

So if you are one of the 59% of people who don’t take advantage of a tax-deferred retirement account, you are probably not going to reach a state of abundance. If you violate the 30% rule when you buy a house, you are probably not going to reach a state of abundance. If you get a car loan with a 7-year maturity, you are probably not going to reach a state of abundance.

None of this is hard. It’s just being smart and practicing a little delayed gratification. In other words, it’s not a skill problem; it’s a will problem. And that’s the main reason the personal finance “industry” continues to fill up with bloggers and influencers, even though it’s really not that hard.

In a lot of cases, abundance isn’t a revenue problem, it’s an expense problem. For many people, more money doesn’t solve the existential problem that no matter how much you get, it keeps disappearing. Abundance doesn’t mean spending it all—it means having enough for yourself, your family, and your causes—and having plenty left over.

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Saul Bloom famously quipped in Ocean’s Twelve that he wanted the last check he wrote to bounce. Cute, but that’s not really what you want. You want to be able to leave something behind to your descendants, at least while you have the ability to do so. In my case, there will be lots of happy cats.

Some People Never Get There

The other thing about that God-awful Millionaire Next Door book is that all the people profiled in it didn’t change their behavior once they became millionaires. They were still rabid CFs. A million dollars may not be a lot of money, depending on where you go in the country. But in a lot of places it is a lot of money, and maybe it’s time to move up from Old Navy to Banana Republic.

I said months ago that you want to be a CF earlier in life, so you can be a High Roller later in life. Most people get it completely reversed, which is the source of virtually all money unhappiness.

I’m a lucky guy. Cool job, great marriage, nice house, fun hobbies—I have it all. It was a struggle in the beginning, but because of hard work and many good money decisions (and a handful of bad ones), it is no longer a struggle. Plenty of people have more money than me. I hear about them all the time, because I have a lot of high net worth financial advisors as friends. You would be amazed at what’s out there.

I have abundance, which, summed up in one sentence, means:

Everything is going to be okay.

Jared Dillian
Jared Dillian

 

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john.norris@oakworthcapital.com

May 21, 2:23 p.m.

There is a lot right with this column, and the overall message is a good one. However, true abundance is far more than monetary, as every fully actualized person I know would happily tell you. To be sure, these people are few in number, and far fewer still in $5,000 suites…if you catch my drift.

jack goldman

May 19, 9:14 a.m.

Jared, I don’t now if you read this stuff but a word of warning. Most of the people I see who have it all, soon do not have it all. “All” seems to come a go quite rapidly. In my case, cancer. I am a CF who got to be a millionaire. I give some away and still a CF but beware. It “All” comes and goes quite quickly with job loss, cancer, divorce, those things we don’t control. Glad you have it all. I too, have it all, but it’s not what I had in mind. It’s like ordering filet mignon and getting macaroni and cheese and realizing both are having it all. Everyone gets the same air, same water, same 24 hours, same life, but some live in a prison of poverty. What money buys is lifestyle. That’s all. I enjoy having that lifestyle and sharing money with my relatives. Remember, money is gold bullion. Computer credits are not money. Wealth is a from the past, not the future. The computer credits and score do not impress people. It’s the reality of real money, minted by the US Treasury as ounces of gold. Federal Reserve computer credits are just that, debt, credits, not money. Please prosper and know the difference between a promise made and a promise delivered. That is the difference between gold and credit. Bit coin is just computer credits and not real money but the fakers, the imitators, are hoping to take over the real world and suppress the true value of other people’s time. I tell my kids, know what you want, know what the price is, and pay the price. Too many people want something for nothing like an over promised pension, over promised bit coins, over promised future. Having it all today is no promise it’s all there tomorrow. People die every day and we live our lives as if we are immortal. Quote from the Mahabharata by Vyasa. Thanks for your message.

lberriz@gmail.com

May 19, 8:40 a.m.

Not sure I entirely agree with this message Sir.

I am all for the “diet now” enjoy the chocolate cake later.  Our society is, unfortunately, wired for instant gratification.  Digital devices are only making our patience quotient shorter.

I also agree to spend money wisely not wastefully.  Like you wrote a couple of weeks ago, if you truly enjoy that daily latte (Dunkin’ Donuts ice coffee for $2.86 sound familiar?) go for it.  If you enjoy traveling or buying clothes, go for it.  I tell others: whatever you do in life, ensure you die happy living life to the fullest. 

However, I disagree on the buying clothes at Target aspect.  Clothes do not make the person any more than a habit makes a monk.  This axiom equally hits both the $25,000 a year crowd or the $150,000 a year group.  If wearing expensive threads or leather brings joy and meaning into your life (at whatever income levels) by all means enjoy the experience.  But wealth is not defined by accumulating material possessions or quantity.  Maybe the $150k a year saver prioritizes real estate transactions over clothes.  Or even Michelin 3-star cuisine experiences.

It is not a self-esteem issue.  Nor do Thomas Stanley’s heroes in “The Millionaire Next Door” need to change their lifestyle.  If they found abundance with what achieved them their goals, why mess with success?

Keep writing.  It is always welcomed.

simon.mason@sxt-eu.com

May 18, 2:58 p.m.

The problem is this… no one gives a lunch break.  You and I had about the same sort of dysfunctional upbringing causing us to focus on your concept of ‘abundance’.  I love the term - and I wholly agree with you - but the simple fact is that when I was thirty or forty years old I wouldn’t have given a batsass about a philosophical concept like that.  Heck you are talking Buddhism (whatever that is!).  At that age what I would need you to tell me is how to max out my 401K.  Jeezz I’m a Brit living in London – I don’t even know what a 401K actually is!  But three weeks ago my defined contribution ‘Emerging Markets’ pensions fund took a lunch break because a bloke with a hair style phased out about an issue that seems to matter to you Yanks but to no one else.  Just give me a heads-up next time that is going to happen.

jkp_home@comcast.net

May 16, 8:10 p.m.

Where do you introduce the abbreviation “CF”.  What does it mean in the context of this essay. 

Generally I enjoy your essays, but Mystery Abbreviations are always a PITA* for this reader.

* PITA = Pain In The Ass

hoynielsens@hotmail.com

May 16, 8:08 p.m.

Thanks Jared for all the good writing, thought inducing commentary and wit at large. With that out of the way, I disagree with a few sections.

” people say that you should spend your money on experiences, not things. There is some spiritual component to this that I don’t get. “

This is babyboomer and Gen X thinking. Millennials and even more so Gen Z’s are the cohort wanting experiences rather than things, they are the share economy and gopro generation - even neuroscience backs them up. 
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” but I like spending money on things more. Clothes in particular. You feel (and act) differently when you are wearing an expensive suit and an expensive pair of shoes. People who make $150,000 a year and still get all their clothes at Target do this not out of frugality, but low self-esteem.”

This is simply preference and opinion, your model of the world so to speak. I just spend a six digit amount on a new aircraft, but nevertheless shop clothes in Target, not because of low self esteem, but because clothing and Rolex watches simply do not interest me - again, just my modus operandi and preference. In fact… suited all up I feel fake and eerily foreign to myself. 
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“The other crap you hear on Facebook, and pretty much everywhere else, is that money doesn’t make you happy”

Absolutely right - but only up to a certain income level after which there is minimal to no gain in happiness, The dollar threshold ofcourse varies with zipcode or country. But the numbers are no higher than upper middle class in their respective setting. This to me at least makes perfect sense.     
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....and for being a lucky guy - thank your intelligence first and foremost, the pre-eminent determinant. Had you been born 30 points lower, things would be quite different.

Cheers and thanks for the great writing, Tom      

thom.wright@gmail.com

May 16, 7:46 p.m.

Jared, I got there.  I saved and saved while young and now, old, spend and spend.  I did retire (mostly) at 56 though. 

Your thrill it seems, is clothes.  Not so for all of us.  I drive a hot rod (Challenger Hellcat) and fly hot air balloons, and scuba dive, and travel and…..

I kept 15 of the last houses I built (I retired from being a builder after 30 years) as rentals. It really is an education.  Most tenants cannot save a dime though they spend on stupid stuff.  They cannot be educated, they think they are the ones that have it figured out.

One tenant paid a 10% (of monthly rent) penalty every month so she could pay 1/2 the rent in the middle of the month. She did this for years.  I explained to her how much she was throwing away, she was not interested. 

I built my rentals out of pocket and earn a good retirement income from them.  I know buildings, I invested in what I know. It works for me.

steve_maher@putnam.com

May 16, 1:58 p.m.

Abundance aka Financial Independence

ColeDahle@gmail.com

May 16, 11:22 a.m.

I disagree with his characterization of how people spend their money:

“People who make $150,000 a year and still get all their clothes at Target do this not out of frugality, but low self-esteem.”

I often see the opposite. People often spend money on things they personally don’t value, but other people do. Essentially, they spend money on the image they want to project to others. This seems more correlated to low self-esteem than the reverse.

“The other thing about that God-awful Millionaire Next Door book is that all the people profiled in it didn’t change their behavior once they became millionaires. They were still rabid CFs. A million dollars may not be a lot of money, depending on where you go in the country. But in a lot of places it is a lot of money, and maybe it’s time to move up from Old Navy to Banana Republic.”

If you don’t value nice clothes, then it is a waste to spend more money on clothes. I hardly think that having your spending priorities figured out is a bad thing. When looking at discretionary spending, you should have two simple rules:

1. Spend money on the things you value.
2. Don’t spend money on the things that you don’t.

cpaforerp@yahoo.com

May 16, 10:58 a.m.

I believe that your opinions are well thought out, but I must disagree on one point:
“People who make $150,000 a year and still get all their clothes at Target do this not out of frugality, but low self-esteem.”

Clothes are important to you, they are not that important to everyone.  I am a CPA and when I worked at a “Big 4” firm, I was required to wear a nice suit every day.  I did not like it.  I do not wear suits anymore.  I am one of “those people” who wear a Jos. A. Bank suit to the occasional wedding I attend.  Target is probably a “step up” from Costco or Kohls, but I am fine with their togs.  I made over $200K last year.  Clothes are not important to me.

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