11 MIN READ
Let me start by saying this post is absolutely, positively, NOT a history lesson.
And even better, there’s no math involved.
Since we began recording history, we’ve thought about the same things we’re thinking about today. How do we live a good life? How can we have an excellent career and a great home life without constantly feeling like an old pair of gym shoes?
That’s what this post is about. How to control money without letting money control you.
My profession means I spend what some would call an obsessive amount of time thinking about this. The problem is most “advice” out there is about making money, not about how to enjoy it once you have it.
The popular advice seems to think that money is the great band aid that will solve all of your problems. That it doesn’t matter what you do after you get the money, all that matters is that you have it.
I hate to burst your bubble, but this isn’t how it works.
Sure, we all need a certain amount of money to meet our basic needs. Food, clothing, shelter, and a Netflix subscription. I’m not arguing against that. What I AM arguing is that if you have money left over after buying these things, what you do with that extra money will make or break how happy you are.
Over a thousand years before anyone had ever heard of a stock, let alone Bitcoin, in a faraway time and place called Ancient Greece, there was a group of people asking big questions. They were Hesiod, Xenophon, and Aristotle. If it helps, you can think of them as the Shakespeare, Adam Smith, and Jim Cramer of their generation.
This group of guys got it. They understood the value of money and how to use it to live a good life.
So, without further ado, let’s see what these guys have to say on the topic of money. And maybe, just maybe, we can improve the quality of our lives in the process.
It’s Greek to Me
The ancient Greek word for economics was oikonomia. It comes from the word oikos, meaning household. And nemein, meaning management and dispensation.
Basically, to the ancient Greek’s economics = household management.
They didn’t see economics as a science that should be separate from the day to day activities of their citizens. In fact, the pursuit of “pure economics,” making money just so you could have as much as possible wasn’t going to make you many friends in Ancient Greece. The Greek household was expected to produce enough to satisfy their needs, and instead of funneling their surplus back into the economy by purchasing fancy new chariots and the latest Athenian wine vintage, they were encouraged to use their surplus to further their households philosophical and spiritual development, and to support the country through politics.
In other words, Greek’s were encouraged to see themselves as part of the whole instead of as individuals. And the entire goal of economics was to further the political and spiritual development of the community.
Sounds an awful lot like socialism, except that the Greek economy was about as free market as you could get. The only thing that was regulated was the production of grain, and this was out of necessity as Greek soil was not the most fertile, and grain production was a costly, time consuming endeavor.
In fact, the Greek’s had a graduated tax system like ours, with the wealthiest paying the bulk of the taxes. Based on the surviving texts we have, the Greek’s saw this as an honor, rather than a burden. Having surplus that could be given back to the government was the sacred duty of wealthy Greek citizens. Crazy, right?
Whereas modern economics is neutral between ends, meaning the only thing that matters is both parties agree to a transaction, Greek economics was not this way.
People were only considered to have acted rationally if a sale or purchase was taken towards praiseworthy ends. Helping your neighbor start a business was a rational transaction. Buying the latest silk robe to celebrate your cousins win at the camel track was not.
Modern economics believes means are scarce, and we are in constant competition over scarce resources. Think Gordon Gekko and call to mind the following sayings:
“Greed is good“
“It’s not personal, it’s just business.”
But…And this is a big but. How many of the resources that we compete over are actually necessary for our existence? People, as we speak, are feeding themselves for a year on what can be produced from less than 1 acre of land. This makes a great case for the Greek belief in abundance.
This is one of the biggest differences between modern and ancient economics. And, in my opinion, the reason we run into so many problems with money.
As modern economics is a separate science, it acts separately from ethics and psychology, and therefore does not tell us what to spend money on as it is assumed we will only act in our best interests.
Which totally makes sense. Since we are all rational…and would absolutely never wake up at 4 am the day after Thanksgiving to fight with our neighbor over a TV at Target.
For the economy, this is great. You’re doing exactly what you’re supposed to be doing. Spending your money, funneling it back into the economy, and then repeating the cycle.
The only thing modern economics cares about is that you extra money is always funneled back into the economy, so that the economy can constantly grow.
Interlude: Socrates and Critoboulus Talk Wealth
The ancient Greek’s loved to write books with fake dialogue from Socrates. Around 326 BC Xenophon wrote one called The Economist where Socrates and Critoboulus discuss the meaning of wealth. The language is dated but Xenophon does a great job explaining how money works with fake Socrates.
Socrates: The same things, in fact, are wealth or not wealth, according as a man knows or does not know the use to make of them? To take an instance, a flute may be wealth to him who is sufficiently skilled to play upon it, but the same instrument is no better than the stones we tread under our feet to him who is not so skilled…unless indeed he chose to sell it?
Crit.: That is precisely the conclusion we should come to. To persons ignorant of their use flutes are wealth if saleable, but as possessions not for sale they are no wealth at all; and see, Socrates, how smoothly and consistently the argument proceeds, since it is admitted that things which benefit are wealth. The flutes in question unsold are not wealth, being good for nothing: to become wealth they must be sold.
Socrates: Yes! Presuming the owner knows how to sell them; since, supposing again he were to sell them for something which he does not know how to use, the mere selling will not transform them into wealth, according to your argument.
Crit.: You seem to say, Socrates, that money itself in the pockets of a man who does not know how to use it is not wealth?
Socrates: And I understand you to concur in the truth of our proposition so far: wealth is that, and that only, whereby a man may be benefited. Obviously, if a man used his money to buy himself a mistress, to the grave detriment of his body and soul and whole estate, how is that particular money going to benefit him now? What good will he extract from it?
Some of the language doesn’t hold up to the test of time, so feel free to insert Tinder Hookup, Xbox One, Chocolate Donut, Toxic Ex, or Sexy Coworker wherever you see mistress. It plays out the same way.
Socrates sounds an awful lot like Mari Kondo in this passage. If it isn’t useful, throw it out. Just having money isn’t enough. You’ve got to know how to use it.
We see this every day. How many trust fund babies and lottery winners go broke? Their struggle is the same in a lot of ways with ours. They go broke because they don’t have a plan for their extra money. It’s the old “if you don’t stand for something you’ll fall for anything,” idea.
We must know how to use money.
Luckily, knowing how to use money has nothing to do with economics or math. It has everything to do with our values. Knowing how to let go of the things we don’t care about so we can spend money on what will bring us happiness.
In the words of Mark Manson, “to not give a f*ck, we have to find something to give a f*ck about.
This was easy for the Greeks. They had two choices: Philosophy or Politics.
The purpose of money was to feed and clothe their family and then to use whatever was left to support the “spiritual realm” of philosophy and the “heroic realm” of politics.
If a Greek chose to be a politician instead of a philosopher, it also enabled him to be generous towards his friends, and to support the institutions and activities peculiar to their city. So, for example, if they lived in St Louis that would mean supporting the Cardinals, eating Imo’s pizza, and using the local library.
And to those who do not follow these rules Xenophon has the following to say…
“. . slaves . . . ruled by extremely harsh masters. Some are ruled by gluttony, some by fornication, some by drunkenness, and some by foolish and expensive ambitions which rule cruelly over any men they get into their power, as long as they see that they are in their prime and able to work . . . mistresses such as I have described perpetually attack the bodies and souls and households all the time that they dominate them.”
Mistresses seemed to be a big problem in Ancient Greece, or at least for Xenophon personally. Once again, plug your favorite toxic noun into the passage above and stay with me, because things are starting to get good.
The virtue of “soundness of mind” is the virtue that will ultimately determine if money controls us, or if we control money. This is the antidote that prevents the never ending pursuit of gratification.
Unfortunately, the never ending pursuit of gratification is the cornerstone of modern economics.
To break the cycle we have to get better about controlling our mind.
The best way to control our mind is by becoming crystal clear on what our surplus should go towards. Xenophon saying surplus should go to philosophy and politics was really him saying put your surplus towards what feeds your soul, not your body. The happier, more content we are, the better off society will be.
While there are worse things than spending your free time participating in philosophy and politics, this isn’t the end all be all. The Greek’s really wanted their citizens to be active participants in the betterment of society.
Until recently I thought this idea was dead. And then quarantine happened. Our neighborhood Facebook page was more active than ever. Some of our neighbors would ask if anyone needed anything before going to the store to keep people from having to leave the home. The was a godsend for our neighbors in high risk groups. Other neighbors would ask to borrow sugar and bread so they could stay at home.
Our neighborhood came alive during quarantine. We got to know some of our neighbors for the first time. There was constant activity outside with children playing, people jogging, and dogs walking their humans.
As annoying as it can be on social media sometimes, celebrities often act an awful lot like the Ancient Greek’s. The use their position and money to become socially active. This used to irritate me before. You’re an actor, I would think through clenched teeth, why are you telling me who to vote for? Just yesterday I saw you pitching new skin cream made with ethically sourced dolphins on your Instagram feed.
Looking at this like a Greek, this seems virtuous. Rather than ONLY using their position to buy more dolphin face cream, they are using it to proactively make changes to our society. What if the rest of us started doing that?
The thing is…many of us already are. In a year with more social unrest than any other in recent memory, more people than ever have starting using their voice to create change.
A Festivus for the Rest of Us
Consider this. We don’t need to be as outwardly charitable to create a better life for ourselves.
Can’t we accomplish the same by writing that book we’ve been putting off? Or starting that business? Or working less so we can spend more time at home with our children?
At its very core, money is just a tool. And honestly, it’s the best tool that has ever been invented. Money is how we fulfill our wants and needs.
Businesses understand this all too well. They start by finding a need and then create a product or service to fill that need.
What skills do you have that others could benefit from? Don’t think about money. Think about your unique mind and your unique skills. How could those be placed into service to make the world better?
Sure, eventually you’ll reach a point where you have to consider practical concerns: should I quit my job? How much inventory do I need? Should I have W-2 or 1099 employees? But we’re really putting the cart before the horse there.
Values Based Spending
Maybe politics and philosophy don’t interest you. Maybe you don’t have the next Great American Novel or an idea for a business burning inside. Are you just out of luck?
Most of use are able to meet our basic needs. We run into trouble when it comes to our wants, which we use our surplus to satisfy. The problem, which Xenophon highlighted in the last passage is not economic as much as it is mental. Having the right “soundness of mind.”
Basically, being laser focused on what we value. Spending money is not a guarantee for happiness.
Most people have no idea what they actually want to spend their money on. This is where a Values Based Budget can really help. Before I sat down to do this I, like most people, had never given much thought to how I should be spending all of my money.
I’m not going to lie. The first time you do this it’s going to feel a little uncomfortable. At least it did for me.
The best way to describe this is to think about two words: Happiness and Pleasure. Pleasure is instant gratification. It’s the candy bar you buy while waiting in the checkout line. The Amazon purchase you splurge on after having a bad day. It’s going out to eat because you’re too tired to cook.
Pleasure = Instant Gratification.
There’s nothing wrong with doing these things. Where we run into problems is when these are the only expenses we have. Ones that give us temporary pleasure.
Happiness is the exact opposite. Happiness is not temporary like pleasure is. Happiness = Long Term. I think we can agree that we all want to be happy. But constantly chasing after pleasure is not the way to get there. To use our money to buy happiness we have to know what’s more important to us than anything else. We have to know what we value. The values based budget is the best tool I know to get us there.
To do this you’re going to need to spend some time figuring out exactly what your values are. There are some great tools out there like this one we developed for our client’s in-house here at Oakview: Values Based Wealth
This is Where I Leave You
Times are different. The world and our values have changed. But I wonder how our lives would change if we viewed surplus as a way to better the world, to go after what we truly value, rather than consume newer and shinier products that we’ll only enjoy for a month.
Stay wealthy my friends.
About the Author
Stanton Burns works with families to help them eliminate debt, invest smarter, and retire faster. When he's not helping clients live their best lives you can find him watching Auburn football and working on his lawn, which is immaculate.
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