What is the Purpose of Your Money?

Screen Shot 2015-09-14 at 8.26.28 PM“For the love of money is the root of all evils.” (1 Tim 6:10) But we need money to live, in fact it is essential to our survival. It makes sense that it is desirable to obtain. And we spend many hours of our day in labor to obtain money. Notice that Paul does not say that money is the root of all evil, it is the mindset in which we view money.

We know that money does not buy happiness, but it can “buy” opportunity. With money, we have the opportunity to make certain choices, such as how we choose to spend our money. Some people not only spend all of their money, but also spend money they don’t have and find themselves under the burden of debt. Other people are filthy rich and spend frivolously to feed their ego and desire for material goods. Still others earn a decent wage and save a portion of their money for the future. In all of these cases, it is wise to reflect on what is the purpose of your money.

The State Fair

A few weeks ago as my family traveled to the Minnesota State Fair, my 12 year old daughter was intent on winning a big stuffed animal. She had tried, unsuccessfully, in years past. This year she really wanted to achieve it. That was her goal. We gave the kids jobs around the house so they could earn money to spend at the fair. She worked hard and saved her money to spend on the carnival games in hopes of winning a big stuffed animal. My initial reaction was (I said this to myself), “That is not smart. She will spend so much more trying to win the stuffed animal than the stuffed animal is actually worth.” There couldn’t be a more correct statement. But that was not the issue.

StuffedDogMy daughter eventually won the stuffed animal, but it took just about all of her tickets to win enough games and “trade up” the smaller animals. But she did it. And the look of accomplishment on her face was worth all the money she spent plus more. While she may have wasted money going after a worthless stuffed animal (from an economic standpoint), it was a wonderful experience for her, and for us to witness. She was very happy…not because she had money. She was happy because she accomplished something she hadn’t before. This experience enriched her life.

Life isn’t so much about money. It is about experiences. Seldom do people on their death beds say “I wish I had more money.” or “I wish I would have purchased that stock.” Instead they often express regrets on things they wish they could have done, or in other words they regret not having as many experiences as they had. Money can enable you to enrich your life, but only if you use it for a wise purpose.

Money, Investors & Volatility

With the recent market volatility it can be very easy to take the eye off the prize. What is your prize? For what purpose are you investing? Is it simply to increase your wealth? Or do you have a deeper goal for your money?

I speak with many investors whose daily moods and attitude are influenced by what the stock market does that day. And we know that moods have consequences. Our relationships with others and experiences in life are largely influenced by our mood. If we are in a bad mood, it is not going to be a very good day. So why do investors allow their life to be dictated by a short-term quotation machine? Why do investors care so much what someone else values a stock on a given day? Perhaps because they have forgotten, or maybe have not yet defined, to what end they are accumulating wealth.

Investors are often influenced by market movements, the news headlines of the day and our own innate biases to make poor investment decisions. While we cannot control the volatility in the markets, nor how loud the media is screaming at us, we are in complete control of our financial decisions. Many individuals have an investment plan that specifies risk and desired return. But what about the purpose of your money? Has that been defined? Let us use our money wisely – carefully contemplating those times when it would be smart to spend it today to create a life experience, and those times we should save it to create experiences down the road.

As we focus and work toward enriching our wallets, let us not forget to also enrich our lives.

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