Lee Eisenberg has an excellent thought about the value of money.
The greatest uncertainty of all may be the uncertainty over what money is good for. We bury this uncertainty under a million cliches. Money can’t buy happiness. Oh, no? Money can buy time and opportunity to do the things we most love. It can help us fulfill our obligations as parents to our kids and as kids to our parents. It buys quality health care. But somehow or other, we get our knickers all twisted up when it comes to figuring out the real value of money. Could it be that in the end the reason we don’t plan is because we don’t have anything meaningful to plan for?
— Lee Eisenberg, The Number
Via: Debtspiration.com
May 30th, 2006
Scott Berkun, a project management and product design consultant, writes about the importance of being frugal; not with money, but with our attention. He explains in his essay, Attention and Sex, that we determine the value of something by deciding how much attention we devote to it.
Law of lost attention: The value of something you spend attention on is dependent on how much attention you spend on it.
I feel this if very applicable to personal finance, entrepreneurship, or anything we wish to improve or succeed at. If financial independence is a high priority, are we devoting enough of our attention to our finances so that goal becomes a reality? We can ask that question about any ambition we have to determine if it is really valuable to us.
This is an excellent lesson for me because the time I spend on the important things in my life is often at the mercy of several less important things I try jamming into my day. Learning to focus my attention on the worthwhile will bring me the success I seek. In our day and age of mult-tasking, we divide our attention over many trivial things, and focus less on the things that will bring satisfaction and meaning.
“There isn’t a single great work in the history of civilization, no novel, symphony, film, or song that was completed as a 1/5th time-slice between e-mail, IM, cellphones and television.”
Sources: Attention and Sex
March 24th, 2006
MIT has started a research program called SIMPLICITY. Their focus is “developing technologies for design—designs that are simpler to understand, easier to use, and, ultimately, more enjoyable.” Their vision of simplicity in design is right in tune with our goals for Firevalt, the financial managment web app we’re creating. Here’s an excerpt from MIT’s SIMPLICITY vision statement:
“[SIMPLICITY] is a radical reexamination of ways to break free from the intimidating complexity of today’s technology and the frustration of information overload. It is about inventing a future where less is more.”
“The vision of SIMPLICITY is one in which “simple” is not cheap or single-function, but rather elegant and easy to use. Think, for instance, of the beautiful iPod, which has less performance at a higher price than most if its competitors, yet still dominates the market.”
Read the rest of their vision statement here.
March 1st, 2006
Many people believe that the ambitious pursuit of wealth is evil and greedy. I believe that wealth creation is inherently good and improves our society. It’s important to distinguish, however, between the desire to create wealth and the craving for more money. Paul Graham explains the distinction between wealth and money:
“Wealth is the fundamental thing. Wealth is stuff we want: food, clothes, houses, cars, gadgets, travel to interesting places, and so on. You can have wealth without having money… Wealth is what you want, not money. But if wealth is the important thing, why does everyone talk about making money? It is a kind of shorthand: money is a way of moving wealth, and in practice they are usually interchangeable. But they are not the same thing, and unless you plan to get rich by counterfeiting, talking about making money can make it harder to understand how to make money.”
Seeking and creating wealth is the process of growing the whole economic pie, not taking pie from others so our portion is bigger. Making money is the by-product of adding something valuable to the economy. If we seek to add value to the economy either through our jobs or entrepreneurial endeavors, we’ll make money. When we recognize that the money we make is a result of the value we’ve provided to the economy we’ll be satisfied with our efforts, appreciate our money more, and be better stewards of the money we make.
If, on the other hand, just making money is the ultimate goal, the process of actually providing value will be overlooked and deemed unnecessary. Get-rich-quick programs and pyramid schemes will become enticing and our desire to make money will undermine our ability to add economic value. I believe many of those schemes make a few richer at the expense of making the whole “pie” smaller. Would we be satisfied if the money we make represents our cunning ability to pull the wool over people’s eyes?
Wealth is not evil. The desire to accumulate and add to your wealth is not wrong if your motives are correct. America’s free market capitalism makes it possible for everyone to increase their wealth at no one else’s expense. The key is to seek that wealth by delivering value to the economy and by being responsible stewards of the money we earn. By responsibly managing our money we’ll be even more enabled to grow the economic pie and help others add to their wealth.
February 16th, 2006