The Personal Finance Topic No One Talks About
There is one word that is noticeably absent from personal finance content. I’m sure someone’s written about it, but I can’t remember reading a post on it in the two years I’ve been blogging. We hear the buzzwords repeatedly: side hustling, decluttering, values-based spending, travel hacking, card churning, zero sum budgeting, and more. But what about the real root that gets so many of us into trouble when it comes to money?
I mentioned it in “5 Money Euphemisms to Avoid.” Interestingly, it was the one term that no one commented on. It’s almost a dirty word. Yet it’s something we’re all prone to.
Greed.
I hardly expect greed will ever become a buzzword. It can’t be good for SEO. But I think it’s important to broach this taboo that can seriously stymie our financial progress, or limit our happiness even if we are swimming in money.
Admitting the Scrooge in All of Us
The Greek philosophers’ concept for greed was pleonexia, an over-desire. Inordinate desire. A wish or drive out of proportion with what the thing can deliver. An unhealthy appetite. We think that car purchase, sleek device, or rising stocks will make us happy, but these things disappoint. It’s not because those things are inherently wrong, but because we’re wrong for placing our trust in them. Can so much metal, silicon, or stock value change our well-being for the long-term? That’s simply asking too much of too little.
I’m a naturally frugal person, but greed still finds its way into my heart regularly. Sometimes I wish for a more beautiful home even though we have a nice place with more space than we need. Sometimes I dream of new clothes or furniture even though what I have is perfectly passable. Sometimes I desire more savings although we’re filthy rich by global standards. And I know my generous, thrifty husband at times longs to own more land, a nicer car, or a bigger nest egg.
Sometimes yearning for more is a healthy impetus to work hard and live wisely. I’m not talking about such a contented quest to do the next step well. Greed is by definition discontent. Let explore a few examples.
My kids always want more. They have more toys than they have time to play with, but they want everything they see in the store. I know that’s “how kids are.” But isn’t “how kids are” a glimpse into raw human nature?
Credit card debt is often the result of greed, though there can be other factors. I can have something I can’t afford, and I can have it now.
Or take car loans. Unfortunately, they’ve been normalized to the point that people cannot see this. Taking a car loan is saying, I want a nicer car than I can purchase in cash. So I’m just going to get it. For an alternative approach, check out How I Spent $8000 on Cars in 17 Years of Commuting.
Mortgages a.k.a. death pledges are a bit different, since homes are an appreciating asset. Still, it’s all too easy to get greedy with the mortgage, especially when you’re offered loans much bigger than you need or can comfortably afford. Surely the housing market crash of 2008 demonstrated how pervasive greed can be in this arena. During our house hunt we almost purchased a home which would’ve made things tight. It all looked fine on paper but in retrospect I’m glad we went with something less expensive.
Greed is also the stuff Black Friday is made of. Again, there’s nothing wrong with Black Friday, and I know lots of people purchase only gifts or items they’ve planned for. But Black Friday would not be nearly as lucrative if it were not fueled by both consumer and corporate greed.
Responding to Greed
Greed could be for more savings, more travel, more experiences, perhaps even for more “freedom.” Again, it’s not the object of desire that’s a problem. It’s our attitude toward that thing. This attitude is uniquely hard to decipher in a society where greed has become normalized, institutionalized, and celebrated at nearly every level.
Where’s the line between normal desire and greed? That may look different for everyone, but it certainly crosses the line when we start acting on it, practically putting our faith in those things which cannot ultimately deliver.
It’s okay to admit you fall prey to greed. It may just be in your thoughts, or it may limit itself to insignificant purchases that don’t do much harm. It may be a gray area, but it’s there. And I think we’d experience more freedom from it if we could just admit it.
I know it’s scary, but think about the possibility of greed next time you:
- Think about charging something you can’t afford.
- Consider taking a car loan.
- Spend on “wants” while living in debt.
- Put off giving until you’re “comfortable” or “better off.”
- Check your investments constantly.
We can guard ourselves against acting on greed with the following measures:
- Giving consistently and sacrificially.
- Setting a budget and sticking to it.
- Paying off debt as quickly as reasonable.
- Avoiding new consumer debt.
Anyone brave enough to admit how greed affects you? What do you do to combat it? If I’ve missed any good posts on greed, please share them!
34 Responses to “The Personal Finance Topic No One Talks About”
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I hadn’t really thought of greed in terms of wanting a larger nest egg and savings, but I think I’m guilty of that. Since I entered the workforce I have lived a relatively frugal lifestyle for the sake of fulfilling that greed of wanting an ever larger investment account. My end goal though was retiring early and living a comfortable lifestyle with my family though, so not an entirely bad thing to be greedy over. But my wife and I have done a good job of spending more money on experiences that add joy to our lives, backing off the frugal lifestyle ever so slightly and having more balance today.
Thanks for sharing your experience with wanting more investments for early retirement. Again, I don’t think it’s inherently greedy to want that time and freedom for your family, it’s just something to watch out for. It sounds like a good thing that you’re making sure you enjoy the journey!
Guilty. My desire for FI as soon as possible is, at times, greedy. I realize it’s happening when I obsess over the next step, or find myself feeling impatient, like it can’t get here soon enough. My solution? Gratitude, focusing on life today and slowing things down. I have an amazing, full, blessed life right now – but sometimes I do have to remind myself of that fact.
Great answers, Amanda. I agree that obsessing about money or the next step can be a warning sign. And that gratitude is a great antidote!
We are all greedy and it comes in many different forms of wealth. The Bible talks more about money than any other topic.
As you mentioned with watching children. My wife & I learn lessons from our 17-month old. Now that she’s old enough to start having a mind of her own, we quickly realize the only difference between adults and children is that adults normally hide their emotions better.
Congrats on the new partnerships btw, staying true to you & your beliefs is one of the most important aspects of life. Blogging is time intensive and it’s okay to be rewarded beyond award nominations and increasing page views.
Yes, there are many verses about this topic and that emphasis signifies how dangerous greed can be.
So true about the difference between adults and kids–sometimes I throw more subtle temper tantrums than my two-year-old!
And thanks for your comments and understanding about the partnerships. Blogging is time intensive for sure!
I’m guilty of greed in the sense of wanting security. I don’t want to be a burden on others and don’t want to have to worry about emergencies, so I want to save enough to be FI. It’s tough emotional math to think about how donating now will delay this point and delay retirement, when we’ll be able to volunteer more for causes we care about.
Since we put giving in the budget, though, it’s much easier. We say yes to every request and have a set amount that my husband and I give to everyone who asks. That way it’s not a decision every time and there’s joy rather than stress.
Thank you for sharing those more subtle ways that greed can manifest. Again, wanting security and not wanting to be a burden, or being prepared for emergencies, are all good goals in the proper place. It sounds like you’ve reached a great peace about how to make room for giving, even if it will somewhat delay those goals. I think it’ll be well worth it, knowing you were able to share and help others.
Yes yes yes. For me money is all about wanting to have security / peace of mind, and OPTIONS esp as I start to think about having kids, the place of work in my later life, etc. I have started regularly tracking my net worth and as someone who gets obsessive about things…. yeah, greed sneaks in there.
Thanks for your honesty. I do think we can have good reasons for wanting financial progress, but sometimes our focus gets a little obsessive. That’s a great point.
I definitely have to keep greed in check, even though my “greed” looks different than some kind of nasty, awful, high-profile greed. It’s still greed. I have to remember to look around and appreciate just how lucky I am.
I think those more subtle forms of greed can be the sneakiest! I’m glad you can recognize it and fight it with appreciation for your life.
It’s a tough topic but I agree no one wants to write about it! I was actually thinking about something along these lines today. I was driving home from work and I was thinking “what if I did reach financial independence in 5 years?” (clearly hypothetical haha as so many things would have to work out and upside would have to be huge on a couple things) “Would I ‘relax’ and ‘enjoy’ my freedom by travelling or just hanging out and taking things easy? Or would I pursue those big dreams and difficult work that I know would have an impact on others and this world?” I think God has put a drive on my heart and it woudl easy for me to have my endgame be “early retirement” but I truly believe there is more I’m meant to do – so I need to focus less on $ and more on what I’m supposed to be doing in this life. Got very philosophical on you in this comment : )
Thank you so much for sharing these thoughts here. I agree early retirement doesn’t make a good finish line unless there’s something bigger and self-giving on the other side. There’s too much that needs to be done in this world for us to sit back and relax for decades when we’re still relatively young! I’m sure God has given you your driven nature because He has big plans for you.
This is great insight and I haven’t specifically thought of greed in regards to people holding off giving until their “better off.”
Unfortunately I think that’s a very a common manifestation of it.
i will take a little different approach. In the words of Gordon Gecko “Greed is Good.” While there is certainly too much greed the desire to improve ones life and the continued drive to do so drives the economy and innovation.
Think about it a little from this perspective: If there was no potential of reward why would anyone have the desire to risk the little bit of assets and capital they have in developing something new and possibly a boon to the world as a whole? Just because it would make you feel better? I think not.
Tom Edison developed the things he did to make money and for himself and his partners not because he thought it would be a nice to do to develop recording systems or electric light.
Greed is a driving force. Without it I feel the world would be very stagnant and poor. Similar to economies like those in countries that do not have free capital systems. just another perspective on your topic.
Thanks for bringing your thoughts, John. Perhaps it boils down to a semantic difference. I agree there is a distinction between wanting to work hard and earn rewards, and never being satisfied with one’s situation. We can be content without being complacent. It’s the difference between ambition and an all-consuming desire that’s impossible to satisfy. Ambition, incentive, and competition all help our economy, to be sure.
Was thinking the exact same thing.
Greed is good, for all the reasons stated above.
At the same time, I’m reminded of the motto of Shangri La in Lost Horizons – “Moderation in all things.”. Applied here, there is a time for greed, as long as you’re not too greedy, or a time for abstinence, as long as you’re not too much so.
“Inordinate desire. A wish or drive out of proportion with what the thing can deliver. An unhealthy appetite.” Yikes. This is a bit of an eye-opener. I’m afraid I’m guilty – and not just in terms of materialism. In the realm of the material, I’d say that my desire for a big home was greedy. I really equated it with happy, successful family life – which of course a big house can’t deliver. In terms of non-material desires, it’s possible that my drive towards financial freedom has fallen into that category. I certainly was miserable when we were at dangerous levels of debt, so it’s natural to think the opposite will be wonderful – though I realize that’s not necessarily right. I think the way around greed in this case is not to expect happiness to be part of financial freedom, but to embrace happiness on the way, with the expectation that it will be increased with financial freedom. Very thought provoking post, Kalie.
Thanks for your honesty, Ruth. Yes, I think financial freedom is a great goal but it can only do so much for us. If you keep that in perspective and enjoy the journey I’m sure you won’t be disappointed.
Greed is something we need to be talking about. Because I think it that even as we all struggle with our personal materialistic tendencies, there is a bigger, greater institutional greed influencing our world in monumental ways… this accepted philosophy that more and more profit is the number one prioroty for the well-being of modern societies. When we put that above everything as a society, I believe people suffer. Great post.
Great point that greed is institutional as well as personal. I don’t think it’s just modern society; it’s been clear in many societies throughout history. But people are certainly perfecting that pursuit of profit over time.
Great article. I really enjoyed it. You’re right, I don’t see a lot of posts about greed. However, I wrote one a couple of years ago that I think you might enjoy. Here is the link: http://micawberprinciple.com/the-greedy-snake-a-debt-parable-557/
Thanks for your link, Brent! I will definitely check it out.
You are right, too many let greed enter into their mindset. I was aware of it’s sneakiness and was able to know when enough was enough and exit the rat race. I know many who could comfortably retire but won’t because of greed and the desire to have more. Sure, I could have kept going but more money than needed isn’t what makes for my happiness focused life. I prefer freedom and time spent on my terms. Perhaps my drive for freedom is also a form of greed. Hmmmm… something to ponder.
I’m glad to hear you were wise enough to take the chance to get out of the rat race. Unfortunately lots of people can’t quit the rat race, sometimes because they’ve made some greedy decisions along the way. At least it’s a factor. Knowing when enough is enough, whether it’s stuff or retirement savings, is a great way to live. Freedom is great if you’re using it well!
We all get greedy at one point in time. It’s a human attitude and I think it’s part of the adrenaline in us that push us to improve on our current situation.
Yes, it is a discipline to challenge greed but I’ve always been one who tries to think of others, thinks of how we could “share the love” with others who need things more than me. I fail often, for sure.
But my reply is about calling mortgages “Death Pledges”. What is your take on paying for shelter? Save up and pay cash for a house? Rent forever? I wasn’t sure how to read that strong term. I loved our mortgage. I paid extra each month and paid off a 30 yr mortgage in 20. Now there’s no house note though we still put that $835 aside for other things (taxes, car ins, etc) and don’t spend it as if its freed-up money. That “Death Pledge” allows my husband, me, and my mom in the attached apartment and my young-adult son to live on this property. And allows my grandchildren to visit in a comfortable home on over and acre lot whenever they want. I’m 56 and am grateful that the bank allowed us to pay them back at low interest.
Now, what we think is a desirable trend/idea is that we bought a house for one of our son’s to “rent” from us until he can buy it outright. So his ‘rent’ to us is $384 per month instead of much higher payments to a rental company with nothing to show for it.
You can shorten this if you’d like to use it in your blog. Thanks for the thoughts about greed and thanks for letting me reply. “Michelle near Memphis.”
Hi Michelle, thanks for sharing your thoughts. We took a mortgage to purchase a home and I am certainly not against them. They are the most realistic option for purchasing a home in our economy, to be sure. “Death pledge” is what the word mortgage means if literally translated from French, its language of origin. For more explanation, you can read the post “Who Wants a Death Pledge?“. Sounds like you have a great situation and handled your home loan very responsibly.