Thursday, September 12, 2013

For love or money

I read an article about how the SEC is considering a rule that would require companies to publish the difference between how much the CEO makes and the average pay of the average employee. It appears, from the article, that at least part of the motivation is to shame companies into either paying CEOs less or average employees more. 

We all know, of course, that the only way to get rich is to get paid lots of money. And the only reason people don't have enough money is because they don't get paid enough. 

Oh. Wait. That isn't true. 

In the book The Millionaire Next Door, the authors compare people who have money with those who look like they do. And what they found was interesting; it didn't matter how much you made. It mattered how much you spent. And people who had money spent more wisely than people who didn't, even if they earned the same six-figure income. 

Money is not the most important factor in life. It just isn't. Yes, it "makes the world go 'round" and it is difficult to survive in our world without money. But how much you have isn't nearly as important as what you do with it. 

Herman Cain's father is a great example of that. A hard working man, he held down three jobs so he could support his family. But he didn't live paycheck-to-paycheck. He saved enough money to buy his family a home. And, both of his children received a college education. When you consider this took place during the racially segregated period in our history, where such an accomplishment wasn't aided by any "equal opportunity" or civil rights laws, then it becomes even more remarkable. 

My own grandfather left his father's farm with little more than the clothes on his back, and he saved enough money to live comfortably for over twenty years after he retired. He literally paid cash for the home he had built when my dad was in high school. He did what he could, when he could, and waited until he could do more instead of going into debt.  And he was a logger. He made his money cutting trees. He was never the big-wig in the logging company, either. He was just a regular Joe, working, making average pay, and spending less than he made. 

We seem to think that money, especially lots of money, will solve all the problems in the world. But it doesn't. Everyone knows the famous quote by J.D. Rockefeller about how much money was enough. The answer is telling..."just a little bit more." People with millions aren't necessarily happier than those with next to nothing. Some aspects of life are definitely easier. But that doesn't make people happy. 

My other grandfather, who was cheated out of two fortunes (by shady bankers who stole thousands because he trusted) worked hard his whole life. When he retired, he didn't have much, but he and my grandmother were very happy. He always said "Happiness and contentment are a state of mind, nurtured by a heart full of concern for others." And he lived by his belief. My grandfather was a very content man, and his heart was full of genuine concern for others. 

Instead of trying to shame CEOs for making so much money, what we really need to do is educate people on wise financial management (think Dave Ramsey) and get people to think about others instead of just them selves. 

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