Money is not the root of problems

By DAVID MOON, Moon Capital Management
February 15, 2004

While standing in line at a small, owner-operated convenience store this week, I saw a woman purchase two handfuls of bubble gum and four liters of bottled water with her food stamp debit card.

I was shocked enough when I saw my federal tax dollars used to purchase bubble gum and water. Imagine my reaction when the woman then gave the clerk a handful of coins in exchange for two cigarettes! Although I suspect he violated a law or two, I give the storeowner some entrepreneurial credit for filling a market void. Who would have thought folks wanted to buy cigarettes one or two at a time?

Several days earlier, I met with a friend of mine who was panicked about his personal financial condition. He couldn't sleep at night, worried he was about to place his wife and kids in the poor house or under a bridge. He earns $100,000 a year, owes $50,000 on his $300,000 house and has no other significant debt. He owns a vacation home, several automobiles and wears really nice clothes. He does not buy cigarettes one or two at a time. He is in a short-term cash flow pinch, but he is not going to end up with one of those fancy-looking food stamp debit cards.

The interesting thing is that both my friend and the woman from the convenience have the same problem, but it's not the problem they think they have. They each think their problems could be solved if they had more money. But their problem is not the lack of money. Their problem is the way they think about money. Whether or not folks who receive government assistance ought to buy bottled water and bubble gum is a not my issue. But it is clear that the woman from the convenience store has unhealthy attitudes about money. There is something dysfunctional in a person's decision-making process who allocates obviously scarce resources in that manner.

But there is something just as dysfunctional when someone is so worried about his financial condition that he can't healthily enjoy a situation many people would covet.

A humorist once joked that money can't buy happiness: people with ten million dollars are no happier than those with nine million dollars. Hidden somewhere within the emotional underpinning of that comment is a truth: money is seldom a problem, particularly for healthy people in a nation as rich as ours. But our learned thoughts and emotional processes about money are often problematic. If you gave $100,000 to the woman at the convenience store, it wouldn't solve a single one of her problems. She would still be the same person. Her problem isn't her circumstances; her problem is her thinking. This may the result of her upbringing, parents, husband or DNA; I have no idea. But her circumstances are the result of the way she thinks. And unless she changes the way she thinks about the relationship between herself and money, she will always struggle.

And so will my friend.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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