As children we all learn the saying, “Money doesn’t grow on trees”. In schools and childhood, however, very little time is spent on financial planning. If the skill is not learned as a child, then commonly the result in early adulthood is uncontrolled debt. Acquisition of this skill either occurs due to good parenting or an enlightened teacher, or more commonly it results from the school of hard knocks. Poor planning, faulty decision making, bad luck, or pure greed can all result in a downward spiral of debt.

 

In Eastern traditions, the concept of going into debt in order to live a certain way was considered absurd. People lived within their means comfortably and with dignity. Money was never considered to be a status symbol. Grace, friendship and wisdom were the Gods that were worshipped over possessions and riches.

 

In a capitalistic society, all roads lead to more, more and more. Francis Bacon once said, “Money is a great servant but a bad master.” This is the fundamental problem. As long as money is treated as a utility rather than chased as a goal there is no issue. Materialism refers to one’s attitude to possessions rather than the possessions themselves.

 

In society today, credit has become part of the normal mindset. “Which account would that be?” The kneejerk reaction is almost always “credit”. Buying a car? Take out a loan. Buying a house? Take out a bigger loan. Purchasing a new TV? How about 24 months interest free? The credit culture has created  a situation where we set a certain standard of living that we feel we can afford. But in order to finance that, it forces us to work a certain number of hours. As a result, many people get tied down to jobs that they hate, simply in order to maintain the status quo.

 

Economists consider the Global Financial Crisis of 2007 and 2008, otherwise known as the GFC, as the worst economic crisis since the Great Depression of the 1930’s. As a result there were massive losses on the stock market, huge depreciation of housing assets, wide scale unemployment and unprecedented business closures. Many causes were suggested and these included excessive borrowing, speculative investments, as well as the subprime bubble.

 

Clearly there is a balance point here that we need to be conscious of. Additionally and more importantly, we need to have a very clear view on what is important to us . Do we want huge wealth at the expense of family, friendships and love? Do we wish to sacrifice lifestyle, passions and hobbies in order to make enough money just to pay the interest repayments on a house mortgage?

 

Though there is truth in what Epictetus said, “Wealth consists not in having great possessions, but in having few wants” , there is no need to fully renounce all material desire in order to remain debt free. We do, however, need to be financially savvy enough to understand what is acceptable “good” debt that will ultimately lead to increased equity that maybe subsequently compounded, as well as how much risk we are prepared to take, versus “living within our means”. Parents and schools must take responsibility for instilling this in our children.

 

Groucho Marx, who always had something funny to say said, “While money can’t buy happiness, it certainly lets you choose your own form of misery.” There is an element of truth in this, however, why choose misery at all?

 

An enlightened person will choose the path to greater states of freedom, contentment and happiness, so that they may give of themselves more, and compound the asset of happiness many times over!

 

In Health and Wellness