The First Principle

Some people say I'm good with money.

I once was asked to teach a money management course. I was provided with all of the course materials and after I read through them realized that I could never teach this course. I didn't agree with fundamental premise that "money is hard to come by, we are all poor and unless we are very careful with the little we have, we will be in big trouble" The themes of poverty, control and fear made no sense to me.

We live in one of the richest countries in the world. The free enterprise system makes it possible for anyone to achieve a work optional status and, the social safety nets are all there in the event of a failure.

Notice I said "free enterprise" not fair enterprise. What I mean is that the system does not always make sense if you think it should be fair and should have a stronger social conscience.

In any event, in a free enterprise system, the basic idea is that we are free to earn money by working hard. The expectation is that we will save and then invest some of our earnings so that eventually we will be able to live off of the money we earn from our investments. That's the enterprise part. The goal is invest wisely so that working for money becomes optional because our money is working for us.

Unfortunately, there are all kinds of reasons why we so often lose sight of this simple principle.

More on that another day.