If I every met a Scrooge, I met one about a year ago. His financial personality places a monetary value to everything. The notion is that why have an “asset” that does not make money; this is basically greed (not that greed is a bad thing it should just have limits). Generally speaking, people incur expenses everyday they live and find ways to generate money in the form of a job, a business, a paying hobby and the like. Stuff can be anything such as furniture, a car, a book, or more generically things you cannot categorize. The idea here is that placing a value to a car distinguishes it from a thing (or high priced gas using and maintenance cost having thing) because it now has a price tag associated with it. In our society, we associate money with value. We neglect the fact that a car is most expensive in the first 10,000 miles or that the value will depreciate. So the price we pay for something is associated with how much we value it.
My friend has “assets” these assets include an array of things such as real estate, stocks, a pension, friends, a car, and convenience. Technically, he does not place a value on family and friendship but in actuality he does. For example, if he has $50K in a stock and it is not appreciating in value it’s a dead stock. So he sells it and buys something else. If an investment property does not have a renter or the area is “depressing” then he cuts his loses. If a friend cannot contribute to their relationship financially, like start a business together, then their not friends (unless they were childhood friends) but associates. Every relationship is like a business venture. He pays for convenience so the value of this is associated with multiple houses or condos paid in full. When in actuality, these properties are dead assets because they are not used until he needs them. Moreover, it is more risky to pay for a home in cash than to have a mortgage.
I have been trying to express to my friend that money is not everything. And, not surprisingly, he does not understand my concept. My concept is that in the end if all you are is financially fit, financially secure, and financially prepared then all you have is money and that is sad. Therefore, we have to have balance. What does it really mean in life to have money with no one to share it with? Or a bunch of houses but no “home?” Or to be financially sound and an emotional mess?
I struggle with how much money influences my life. I went to college but it was not to get a good job. Reality: people who go to college (and finish) earn more than those with a high school diploma. I live in a nice community because of convenience. Reality: people in my neighborhood have similar education and income. My children go to good schools because I think it is better for them overall. Reality: their schools are “diverse” but also homogenous in terms of household income. Honestly, I value experiences, education and things like coffee, watches, and black dresses. So I spend my money of that stuff be it piano lessons, trips, or good school and/or districts. But my kids never like practicing the piano, or the trips I choose, and even asked why I pay for their school because they do no learn anything.
Reality check: We can place a monetary value on something that means absolutely nothing, especially in retrospect.