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Monday, April 24, 2017

Everyone Has Money Troubles

Posted by Robert on September 13, 2010

A member of my extended family is approaching retirement in the next three to five years. Lately, I have been working with him to prepare his investments for the time when he will depend on them for his source of income. He works in health services and is able to save large amounts each year. As we work together, I realized that people probably never stop worrying about money. People who have money simply worry about different issues than people who don’t have money.

I sometimes work with people who have just enough money. When I talk with them about their finances, I hear about things they would like to be able to do, but can’t. I often hear about traveling or buying a new car or doing renovations on the house. People who can’t afford to do these things generally understand what the trade-off is. They would rather have enough investments to produce their income without worrying about running out of money. Even people who are at risk of running out of money, who are spending down the capital by age 90, not expecting to live that long, say that it would be nice to have more, but they’re doing okay with what they have.

People who don’t have much money, but wish they did, are simply asking to trade one set of troubles for another set of troubles. People who have money also have troubles. They worry about whether their assets are being managed properly. They worry about how much they are paying for professional investment, tax and legal advice. They worry about minimizing the taxes they owe. They worry about people trying to steal from them or defraud them. They worry about how to help those less fortunate. They worry about false friends asking for handouts. They even worry about spoiling their children.

It’s simply not possible to say: “Of those two sets of troubles, I’d rather have too much money.” Take, for example, lottery winners. It seems that many of them start with too little money, and are suddenly granted an exchange of their troubles. When they suddenly have too much money, they unwittingly trade one set of trouble for another. And it is not uncommon to see newspaper articles describing lottery winners who have slipped back into “too little money” troubles after time.

Envy goes both ways. People who suffer, will suffer no matter their circumstances. Wishing for more money is simply a desire to exchange “poor person’s suffering” for “rich person’s suffering”. I firmly believe that we all have the right amount of money for us, at the time. If it’s important to me to have more money, I’ll dream and think and plan and try and work toward getting more money. And as I do, I will slowly but surely learn to handle and manage the troubles that come along with having that amount of money. As I move up through too little, just right, more than enough and too much, I expect to develop abilities in managing the responsibilities that come along with it.

What money troubles do you have? Do you find having money comes with its own set of troubles? What lessons or skills have you learned from managing money?

Comments

5 Responses to “Everyone Has Money Troubles”
  1. Oscar says:

    I agree that folks who find themselves in the situation of either having enough or not enough money at retirement experience different sets of problems. That being said, I strongly suspect that those who have enough have an easier time appreciating the problems of those who don’t versus those who don’t appreciating the other groups problems.

    Personally, We were extremely fortunate to be in the have enough camp before 50. My main worry is balancing a modestly comfortable lifestyle while maintaining our base capital for income generation versus the prospect of laying on our deathbeds with a healthy net worth cursing ourselves for not spending more when we could have lived it up a bit more. I do appreciate that this is not a bad problem to have.

  2. Adam says:

    I find a lot of people always in the camp of ‘not enough money’, even despite gaining more and more of it. Lifestyle inflation keeps them in that camp. I see guys with a new Porsche and flashy ‘stuff’ who don’t have any more money than they did in college becuase they just can’t keep it in their hands when they get it.

  3. Robert says:

    Oscar, I agree that money is one of those things that it’s better to have too much than too little. Thanks for sharings.

    Adam, I have seen the same thing. I know some people who will be rich, no matter how little they have. I know others who will never be rich, no matter how much they have. You’ve summed it up nicely.

  4. Oscar says:

    Re-reading my post, I apologize if I came off arrogant in any way. Truly, we live a modest life on what most wouldn’t consider enough. I’m just happy I have the time to enjoy the time left in a comfortable way (health, roof, garden, enough $ for heat, water etc.).

    Adam and Robert, I know people like the ones you describe. Modern pundits attribute this to generational values etc. I don’t buy it. In my experience people who read blogs like this one appreciate that the hard work saving for their futures is more rewarding than the latest gadget. I know folks who are my seniors who don’t get it and folks who are my junior who do.

    My only fear Adam, Robert and any other readers is that our savings will be eroded by taxation to cover the ones that lived the easy credit lifestyle but weren’t able to pay the tab.

    FWIW

    Oscar

  5. deegee says:

    As an early retiree at age 45, I never had any money problems. I always earned more than what I paid out in my monthly bills. I paid off my student loans and home mortgage many years early and never carried any credit card debt. Even after some major purchases in the 1980s (car, apartment) which drained my accounts, I quickly rebuilt my savings and investments.

    Having more money did not come with more troubles. Instead, it relieved me of my troubles.

    Robert, I would flip your last question around and say that the skills I learned in my years of working helped me to manage my money and plan for my early retirement nearly 2 years ago. Those skills included creating spreadsheets and learning how to write better.

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