Wednesday, November 5, 2014

How to Worry Less about Money - John Armstrong

Continuing my research into my relationship with money, I now find this fine book titled 'How to worry less about money' written by John Armstrong, who was Philosopher in Residence at the Melbourne Business School and author of several books. Raja gave it to me on the last visit and I am happy to delve deeper into this subject that mystifies me.

At the very beginning John Armstrong differentiates between money troubles and money worries. Money troubles are urgent and real and need action to set them right. Money worries on the other hand are about what we have in our head. It is about our thinking patterns, on what we pay attention to (if I buy coconut water my money might run out). It is the scheme of values we carry, our culture, that makes us worry so.
We can have a lot of money and still worry.
We can have no money and not worry.

Some questions that he asks. What do I need money for? How much do I need? What are my economic responsibilities to other people? What's the link between money and the good life?
If we can answer them truthfully we can get some clarity. Armstrong for instance talks of how his car is old, but reliable and he is happy with it. But its only when he sees it in comparison with other cars that he feels unhappy. (I can identify with him, everyone seems to be telling me to change my car. Why? Carlos is perfectly fine! But the world feels that I need to be urged to upscale my life.) Or a particular hotel in Vienna that he identifies with great writers. In his mind he feels he cannot stay there, because somehow he cannot think that he is also like them. Too much thinking. But that's just to show our pattern of thinking. Many of these signs constantly remind us of some gap in the head. I have a hundred such.

I loved this line about training and education. Armstrong differentiates between the two. In the field of teaching he says "training is when one teaches how to carry out a specific task more efficiently. Education is what opens and enriches a person's mind."

My relationship with money
It is important to examine whether one has a good relationship with money. As with any relationships John says, this relationship also requires both parties to work. What are you bringing to the table?
A. We bring imagination, values, big ideas of life, emotional maturity, attitude, ambition, fears and memories, among other things.

Money has many secret meanings to us. It means victory over a rival, it says we have arrived, we have proved a point, it can bring us love or sex, it can even be a death of childhood. (To me having money is a tiny bomb that will make me instantly unlikeable to many who currently like me. I think I have secretly used money or lack of it as a tool to make myself vulnerable enough for people to approach me. I don't know but I do think this is one of the many ways that I relate to money. Need more thought. Other than the fact that I was at some point absolutely uncomfortable with money - my reactions when I was asked to talk about my relationship with money was almost like I was asked to hold a live snake and asked to speak about it under duress while it stood by ready to bite me. I have since made some peace with it.)

Many of us feel that we are unqualified to speak about money. I do too. Because I don't think I am an expert on it. Who am I to speak about money? It somehow brings to us these self-worth issues. When we are fine with breathing the same air as everyone else, why can't we talk about money?

How do we strip off these notions we have about money?
Armstrong gives four steps.
1) Acknowledgement of what it really means to you
2) Associations (with words)
3) Private history (write key episodes in your money history, find if you are proud of yourself in relation to money, recall when you were most humiliated and embarrassed, how money has figured in your upbringing etc)
4) Finding the right company (people who encourage you to be realistic, who don't use money to humiliate, who don't spread despair, who are open to share their economic story, who listen, who open our minds)

What exactly is money?
It is a means of exchange.
Work and enterprise brings money which you use to buy possessions and experiences. That's it.
Our prime task in life then becomes this. How to translate our efforts into possessions and experiences that are lasting.

What's the connection between money and the good life?
Armstrong says - money cannot buy you happiness. So there goes that theory that I will be happy when I have money. I think we can be happy without money too. If we want to. Anyway , instead of saying that one would be seeking happiness through money, a relationship that can plateau off after a while, he says we could look at 'flourishing' as an alternative. It is in tune with what we care about in life and brings an amount of serenity and buoyancy to the table.
Okay you have money. Are you happy? Not really. Are you flourishing? Yes. See, simpler way to feel happy.

Armstrong looks at envy as an education. When we feel envy he asks us to take it seriously.

Money is about being creative. To create we need an order. We need to understand what we need and what we desire. Once the needs are found out, we must work at needs without reference to price. He classifies needs into Higher (noble and intrinsic needs such as deep friendships, emotional maturity, personal story), Medium (Social, well paid job,  clothes)  and Basic needs.

How much do you need?
This includes taking responsibility for others. Armstrong has a table which has columns showing the need, items that fulfill the need such as (place, sport, travel, education, toys, eating out, pension) and the range of mimimal, true and expansive range of the need.

On the issue of price vs value Armstong clarifies that price is public and value is personal. Qualities of those who can see value are those who 1) can see what is important in creating an experience and what is not 2) judge objects on intrinsic merit 3) show good taste 4) are creative, look at potential and take responsibility

We look at money with longing and fear. To sort this relationship out he advocates keeping accounts in order so you understand what its about. A key point he says here is that we must separate the task of organising from confronting. I like that. Most times we confront when we have to organise. Gently.

How can we make money and still be good persons? Reorganise your work life efficiently. Know the end and find the means. If you have the money, or get an inheritance, relax. Do the things it frees you to do but only to the extent that you choose to. As my friend AP Srinivas said, money is the power to kill an ant. It remains one of the most powerful statements I have heard with respect to how we use our money. Just because we have access to money does not mean we throw it away or have an urge to splurge. You can remain nice and frugal. Only use it when you feel the ant is biting you.

Armstrong talks of the virtues of poverty which frees one from obsessions, creates finer perception and encourages frugality which is not a bad thing. In fact I remember reading about how self made millionaires are mostly frugal in their lifestyles.

Finally, if money is about experiences and possessions, it does warrant this question. After having gone to all sorts of problems in converting your work and enterprise into money, are you able to enjoy the experiences and possessions it brings you? Or is your money hidden away in various lockers and secretly stashed away, caused all your relationships to break, mucked up your health etc? This brings to the fore the fundamental aspect of this book, that our relationships with money are only partly about money. Its mostly other things i.e. ourselves.

To figure money out, figure yourself out. Then you can strike the right balance. Like Goethe did.

Having money is one thing. Its important to know how to use it. The right balance is in knowing how much you want, find ways to put your effort and enterprise in generating that, creating a surplus and knowing how to enjoy the money in ways that appeal to your sense of well being.

 Nice book. Lots of nice exercises and thoughts. I have benefited from it. Its a nice and easy read that gently organises your mind. 

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