Category Archives: your money or your life

The Anti-Accumulation Holiday [Guest Sermon]

not my synagogue Each week, my Rabbi gives a moving and informative sermon. They’re always top-notch, but this week’s was also very topical for Foundry in the Forest. I asked him if he’d be willing to let me turn it into a guest post, and he was kind enough to oblige.

The holiday of Passover is coming up next week, so Jews around the world are doing spring cleaning: literally, to get rid of the bread crumbs in the cupboards, and also metaphorically to try to rid ourselves of the excess in our lives.

The sermon is long but I encourage you to read the whole thing, regardless of your faith, as the message is universal.

————————————–

The Anti-Accumulation Holiday
Rabbi Jay Rosenbaum

I have made it known over the years that the most valuable lessons I have learned in life come from television. But, today, I’m not going to limit my comments to TV. I’m going to start with a television show. But, then, I’m also going to talk about an insight into the Exodus story I learned from a Muslim friend, and how it’s connected to the show.

First the show. There is a show on HBO called “Enlightened” starring Laura Dern as Amy. In one of the episodes, there is a five minute encounter between Amy’s mother, Helen, and Helen’s old friend Carol, played by Barbara Billingsley.

Helen and Carol used to be good friends. They were both married to successful husbands, and they ran in the same circles. They run into each other in the store, after not having seen each other for several years. At first, they are delighted to see each other, and they start to catch up on each other’s lives.

Carol tells Helen about her daughter who is married and has two beautiful little children. She pulls out her iPhone to show Helen the photos. Then Carol asks Helen about her children. Well, Helen has one daughter, who has a child, but she hasn’t spoken to this daughter in years.

Her other daughter, Amy has just gotten divorced from Levi. They used to be the envy of everyone in high school—the energetic, beautiful blonde that all the boys wanted to date, and the handsome, star athlete. But, things haven’t worked out for them. And, now Amy has been demoted from her job and is living with her mother, trying to figure things out.

When Helen tells Carol about her children, Carol makes a feeble attempt at sympathy, but change of facial expression and tone of voice reflect a sense of superiority laced with contempt. “You know,” she says to Helen, “my daughter was always jealous of Amy in high school. Everyone wanted to be Amy. She had it all.” And, it was clear that Carol believed she had won the race. She had children, she had grandchildren who were flourishing. And, the former prom queen had nothing. And, she was happy about it.

The whole conversation lasted no more than five minutes, but it was brilliantly done. Because it showed how a simple exchange between two women who were supposedly friends and interested in each other’s welfare, was really about an intense jockeying for power and position. No one pulled out a gun, no voice was raised even a notch. But, this was war. It wasn’t enough for Carol that she had so much to be grateful for in her life. She had to derive additional satisfaction from the fact that her friend Helen had less than she did, and so she had won.

What causes human beings to behave this way? Here I would like to turn to a story we spoke about a few weeks ago, but which I saw differently because of a discussion we had in our Muslim-Jewish dialogue group this week. We were studying the story of the manna. After our people left Egyptian slavery, and we were traveling in the desert, we were anxious about not having enough food. So, God gave us a guaranteed food supply for forty years. But, God only gave us one day’s supply of manna at a time.

And, there were rules. We were not allowed to save any manna for the next day. We were to take only as much as we needed and no more. And, the Torah tells us that no matter how much we gathered, every one of us had just enough, but no surplus. So, clearly, many of us tried to grab as much as we could, but to no avail.

Many of us tried to save the manna for the next day, but it spoiled. We were only allowed to save the manna once. That was on Friday, when God gave us a double portion, so we wouldn’t have to gather on Shabbat. But, that didn’t prevent the Jewish people from going out the next day and looking for more.

Why did God choose this particular method of feeding the Jewish people at the moment we had been released from slavery? What would have been wrong with allowing us to save up some of the manna, and relieve us of the anxiety that we wouldn’t have enough for tomorrow?

When we were studying this story in our Muslim-Jewish dialogue group, one of the Muslims, David Suissa, remembered that in the Joseph story, there was an opposite scenario. Joseph was the ultimate saver of food. He presided over the saving of food in Egypt during the years of plenty so that when the famine hit, there would be enough to feed everyone.

That sounds so sensible. But, what actually happened? Joseph controlled the entire food supply for Egypt. He rationed out food as he saw fit. Initially, people bought the food. When they ran out of money, they sold their land to the government in exchange for food. When they ran out of land, they sold themselves to Pharoah in exchange for food. Now Pharoah controlled all the land in Egypt and he had a huge slave force.

When we look at life as a zero-sum battle for scarce resources, the result will be slavery. In our fear that we will not have enough, we will want to grab as much as we can. We will horde, we will try to corner the market. And, the result of that kind of unbridled competition is always going to be that a small number of people are going to control a disproportionate share of the resources, and a huge population is going to have little or nothing. The resource could be land, money, oil, water, and even things like friendship, or sexual partners.

The Torah traces human oppression to the propensity of every human being to take more than we need. It’s why the Torah says of the king, ‘The king was not to accumulate too much gold, too many horses, and too many women.’ Because if the criterion of a successful life is having more and more and more—if the more we have, the better we are, that’s a recipe for gross inequality and mass human misery.

When the Jewish people left Egypt, the goal was to create an egalitarian society, How do you do it? You attack the source of inequality—our human tendency to want more than we need. If God had allowed the Jewish people to collect as much manna as they could, there would have been a fierce competition, with the Jewish people stepping on each other to grab as much as possible.

The result would be that a small number of people would control the majority of the food supply. They could sell it at any price they wanted. And, now, once again, you have a slave society. By forbidding the Jewish people from even saving for one day, God was reversing what went wrong in the Joseph story, where hording led to slavery.

And, the way we celebrate Passover is a reflection of this philosophy. In the month before Pesach, it’s a liability to save. You’ll end up throwing things out.

Passover is the anti-accumulation holiday. To get ready for the holiday of freedom, we have to un-save, we have to un-accumulate. We have to get rid of all the extra stuff that we don’t need. It’s a way to rid us of the insecurity that leads us to horde and take as much as we can. Because it’s this compulsion to take more than we need that leads us to be blind to what others need.

It’s no accident that the most popular song at the Seder is Dayenu, which means “We have enough.” To create a truly just society, it is essential that each of us master the ability to take what we need, and no more. Passover challenges us to ask ourselves: what do we really need to be happy and fulfilled?

And, not just in regard to material resources. There are many ways to play the hunger games. We can hunger for attention. We can hunger for applause. We can look at life as a bank account in which we have to continually pile up credits to our name. In our mussar class in the Fall, Ann Trail called them merit badges. The more badges we have, the more worthwhile we are. When that hunger to accumulate becomes obsessive, even in the most polite society, we can end up taking joy in our neighbor’s unhappiness.

Passover encourages us to live more simply, to live more modestly, not only in our physical needs, but in our emotional needs, too: to take for ourselves enough attention, enough praise, enough appreciation, but not more.

Passover encourages us to sing Dayenu, not only at the Seder, but in our lives, as well.

———————————————-

Who knew that the main theme of Your Money Or Your Life (having enough) has its roots in an old Jewish Passover song?

Thank you to Rabbi Rosenbaum for allowing me to publish his sermon. Happy Passover, Happy Easter, Happy Spring, no matter what you celebrate!

We’re always waiting, but what are we waiting for? [video]

My sons are way into an album by the Portland group Yacht. I’m always happy to introduce them to non-mainstream music, but I’m especially glad they’ve taken a liking to this album, because the messages of the lyrics are very positive. There’s one song in particular called “We’re always waiting.” I never realized how well the lyrics summarize the Your Money or Your Life, voluntary-simplicity movement.

Give it a listen:

We’re always waiting. What are we waiting for?
We’ve got all we need right here, but something’s telling us we need more.
We want all that stuff. All that stuff that costs too much.
Why are we working? And what are we working for?
We feel sad and such. Are we owned by our own stuff?
We don’t want our boring jobs, to keep us paying bills for ever.
So what are we waiting for?

Frugal School: Sophomore Year

[Frugal School is my fun way of maintaining a book list. It has 12 books total, meant to be read one book per month. You can check out the introductory post about Frugal School, and see the entire syllabus.]

Sophomore Year – Getting Started

Welcome back to Frugal School. Hope you enjoyed your Freshman year and didn’t get hazed too much. These Sophomore Year books form the foundation of understanding your relationship with money, perfect for getting started on your own frugal journey. This year only has 3 books because the first book takes some time to digest.

ymoyl Your Money or Your Life by Vicki Robin and Joe Dominguez
This book is the big one. Remember when you finally picked a major in college, and you took that intro class for the major and it totally opened your mind to a new way of thinking? That’s this book. I wrote a longer review of it that goes through each of the 9 Steps. You should read that post.
i will teach you I Will Teach You To Be Rich by Ramit Sethi
Ramit has a unique writing style that might turn off people older than 30. But once you get past that, his method for automating your finances can’t be beat. Learn step-by-step how to get your financial life in order, how to negotiate on the price of major purchases, and how to invest for retirement.
bank of dad The First National Bank of Dad by David Owen
This book isn’t just for dads and it isn’t even just for people with (or planning to have) kids. It’s a primer on the meaning and value of money, investing, and the stock market. If you don’t have kids you can skip the second half of the book, which details the author’s method of helping his children learn to invest without forcing any particular value system down their throats.

Once you’re through reading these books, you can continue on to Junior Year of Frugal School.

Your Money Or Your Life, Step 9: Managing Your Finances

[This is the 9th and final episode of a series on the book Your Money or Your Life. See my original post about the book.]

First off, sorry for the delay between Step 8 and this post. If you made it this far, you’re going to have money saved up. No doubt about it. I was already a saver before I read the book, but my savings rate has significantly improved since. And not by denying myself. I feel happier about my spending (and not spending) then I ever have before.

This chapter changed a lot between the first and second editions of the book. The first edition simply told you to put all your money in bonds. This is pretty bad advice no matter what the current bond interest rate is, since you shouldn’t have all your eggs in one basket. But these days, with record-low bond rates, investing 100% in bonds is awesomely stupid. Makes sense why they changed Step 9 so drastically.

The new Step 9 is vague about what you should do with your money. One thing hasn’t changed, which is the authors’ advice to be your own investment advisor. This is excellent advice. Nobody can beat the market, so you shouldn’t pay someone to throw random darts at a dart board.

So what should you do with your investment money? It’s going to depend on your risk-tolarance and how long you plan to save before dipping into your capital.

Instead of giving specific advice, the book recommends you do your own research so as to become knowledgeable about long-term, income-producing investments. For me, that means a balance of 60/40 stock indexes and bond indexes*. I use Vanguard because they have the lowest fees. In addition, they have a single fund you can invest in that will give you the 60/40 blend without the need to pick indexes individually, or rebalance when things go askew.

It’s called Moderate Growth (VSMGX), and I highly recommend the fund for any beginning investor who wants a hands-off, “set it and forget it” approach.

To diversify, I also have a small amount of money in safer investments (cash) and a smaller amount in riskier investments (peer-to-peer lending).

Here’s what my entire portfolio looks like:

Investment Percentage
Stocks 67%
Bonds 25%
Cash (emergency fund) 7%
Peer-to-peer lending 1%

Stocks end up more than 60% due to some individual stocks I still own from the days when I thought I could beat the market. Silly me.

Conclusion

So that’s the whole book! You can go back to my first post about it, and get an overview about the entire program. I highly recommend doing all 9 Steps, it has really changed my life for the better.

I’ll do more book reviews now that I’m done with this one. Though they won’t be as long as this one was!

Update: I did a series of follow-up posts on my current investment allocation, starting here. The above info is still great for getting started with investing.


* An index is a list of investments picked by some standard definition, simple enough that they can be bought and sold automatically by a computer program, which is what makes them low-fee investments. For instance, Dow Jones and S&P are the most well-known indexes.

Your Money or Your Life, Step 7: Maximizing Income

[This is part 7 of a 9 part series on the book Your Money or Your Life. See my original post about the book.]

Maximizing Income is the flip side to the previous step, minimizing spending. The wonderful thing about maximizing income is that there’s a limit to how much you can save, but no limit to how much you can earn. This step isn’t only about your bottom line, it’s also about respecting yourself and your limited time on this earth. Ask yourself: Am I “making a living” or “making a dying?” What are your purposes for paid employment?

I’ll leave the details of making more money as an exercise for the reader. You’ll need to approach it differently depending on your life story, but here are some popular ways to make more money:

  • Ask for a raise
  • Change jobs or careers
  • Pick up a moonlighting gig
  • Earn money from a hobby or field of expertise
  • Sell stuff you don’t need
  • Make your money work for you – as capital, or by investing in yourself (e.g. continuing education)

Plenty 0f fast moneymaking schemes are out there, and unfortunately most of them are peddled by unsavory characters. One person whose advice I trust is Ramit Sethi of I Will Teach You To Be Rich. If you can get past his gen-x writing style, his blog and book have plenty of honest tips on earning some side income. Honestly, he devotes more of his time to getting his readers motivated than anything else. I took his advice and started moonlighting as a social media consultant. It didn’t really turn out to be something I wanted to devote serious time to, but it was rewarding to teach others and earn a little money on the side.

Your Money or Your Life, Step 6: Minimizing Spending

[This is part 6 of a 9 part series on the book Your Money or Your Life. See my original post about the book.]

When it comes to how you spend your time and money, this step is about figuring out how much is “enough” for you. It can be illustrated by the following chart (taken from the book):

When “Your Money or Your Life” was written, the idea that this chart represents (“there’s an optimal level of consumption”) was pretty revolutionary. Since then, it’s become more mainstream: now we have the Voluntary Simplicity movement, and TV shows about people with small houses. The pendulum has swung away from “bigger is better” in the court of public opinion.

Summarizing this chapter is difficult, because you can’t just whip out a pen and paper and tabulate some charts about your money. There’s no formula or steps to follow, because “enough” is going to be different for each person.

To really live Step 6, the concept of “enough” is something that needs to permeate your entire existence. Knowing and respecting your personal level of “enough” goes way beyond spending, yet it frequently saves money in the end. Here are a few examples:

  • Driving the speed limit is fast enough. It’s safer, less stressful, and it saves on gas
  • Eating just enough food lets you split meals when you dine out, and never leaves you in a food coma
  • Cataloging everything I own (Step 1) made me realize the hidden burden of having more than enough material possessions
  • Living in a big enough house cuts down on living expenses, including hidden costs like heating
  • The cheap wine is good enough, so you can either cut down on your alcohol budget, or drink more of it! (This one might be the most controversial)

When you waste money by spending more after you’ve reached the peak of your fulfillment curve, you’re wasting your most precious commodity: your life energy (you have only a finite amount left). My friend Evan put it best, when talking about the time/money tradeoff:

It rarely seems worth it to spend another hour in a cubicle to have a more tender piece of meat for dinner.

Living a life of “enough” is what 90% of frugal blogs focus on: cutting back, doing without, “money-saving tips!” etc. It’s the stuff that practically writes itself because it’s so easy to look around your house and say “I wasted money (or time) on that.” But as we’ll see in the next chapter, there’s a flip-side to minimizing spending. Even better, it’s more enjoyable and potentially much more productive: maximizing income. Stay tuned!