2653: Mindful Money by Ira Israel on Scarcity Mentality, Abundance & Financial Freedom

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[00:00:56] This is Optimal Finance Daily, Episode 2653 Mindful Money by Ira Israel of IraIsrael.com

[00:01:09] and I'm your host and personal finance enthusiast, Diana Merriam. We're going to get right to

[00:01:14] today's post as we optimize your life. Mindful Money by Ira Israel of IraIsrael.com

[00:01:27] quote, A man is a success if he wakes up in the morning and gets to bed at night and

[00:01:33] in between he does what he wants to do. Bob Dylan. At various times during my life I've

[00:01:40] been relatively wealthy and relatively impoverished and neither one has particularly appealed to me.

[00:01:46] But the psychology of money, how our minds relate to all those bank statements and credit card bills,

[00:01:53] dollar signs and numbers has always fascinated me. Ask yourself, do I have a scarcity mentality

[00:02:01] and live in constant fear of not having my basic daily survival needs met? Like the 3.5 billion

[00:02:08] people on the planet who live on less than a dollar 50 per day? Or do I believe that the universe

[00:02:15] is wonderfully abundant and forces are conspiring to ensure that I thrive? Is there a great area

[00:02:22] in between these two extremes or does one's personal paradigm shift over time as he or she gains

[00:02:30] and loses money? There are different ways to relate to numbers. T. HarveEcker observes that middle

[00:02:38] class people think in terms of salaries while wealthy people think in terms of net worth.

[00:02:44] Similarly, UPEN professor Paul Fussell in his book, Class, A Guide Through the American Status System

[00:02:52] claims that colors correlate with social class. Just think of the color choices you get at a

[00:02:58] BMW or Porsche dealership as opposed to a Kia or Hyundai dealership. And if Harvard Law

[00:03:06] professor Lani Gwinear's research in the tyranny of the mediocrity, democratizing higher education

[00:03:13] in America is correct than it seems as if SAT scores are better indicators of family income

[00:03:20] than of scholarly aptitude. I recently met two young female budding entrepreneurs who each

[00:03:27] separately exclaimed, I want to make a lot of money. After the vomit subsided from my esophagus,

[00:03:35] I looked inside myself to inquire as to why I find such languaging to be crass, vulgar,

[00:03:42] and lacking grace and dignity. Already, I can envision comments asking what's wrong with making money

[00:03:49] to which I would reply nothing as long as your personal identity is it merely an amalgamation

[00:03:56] of material possessions and numbers? I desire more freedom, ease, opportunities, and options

[00:04:04] would be the way I would express a similar sentiment. One of the two aforementioned women

[00:04:10] happens to be 30 grand in credit card debt at an average annual rate of 12%. I asked her how much

[00:04:17] she earned from her day job and she told me that she took home about $900 per week after taxes.

[00:04:24] I told her, okay pick any month of the year January, February, March, April, May it doesn't matter

[00:04:31] and know that every day during that month you will drive to work and sit at your desk

[00:04:35] and 100% of your earnings will go to the banks that loaned you that $30,000.

[00:04:42] One month of your life every year until you pay it off because $3600 of yearly interest payments

[00:04:49] equals exactly four weeks that you work for zero income. This is the way I think about money.

[00:04:55] I think of it in terms of freedom, free time, time to pursue things that inspire me.

[00:05:01] The second of the two women is friends with several billionaires who apparently use their net

[00:05:06] worth as measures of success and comparison to their fellow one-percenters, like little boys having

[00:05:12] contests to see who can pick farther. The mind is analogous to a hedonic treadmill so when whatever

[00:05:20] object of desire is acquired it will soon be replaced by a new one.

[00:05:25] If a billionaire looks out across one of her majestic properties past the electronic fence

[00:05:30] disguise as a weathered brick wall, pass their surveillance cameras hidden in trees

[00:05:36] and pass the armed centuries house and notice his five Olympic-sized pools on her neighbors'

[00:05:42] estate. Her mind will probably say something like, I can't believe Joan has five Olympic-sized pools

[00:05:49] and I only have four. Something must be done about this right away.

[00:05:54] But as soon as this billionaire acquires a fifth pool, their mind will spy another useless

[00:06:00] indicator of wealth that she feels she needs to acquire. For money and status are a never-ending

[00:06:06] game. Enough is never enough to our minds. By the way, I think someone might have once mentioned

[00:06:13] that it's not great to covet thy neighbor. Do you consider your bank account to be an accurate

[00:06:19] indicator of your success in comparison to your fellow humans on planet earth? Well then Bravo!

[00:06:25] Well done. Because there are at least 3.5 billion people who survive barely,

[00:06:31] unless than what you paid for your cup of coffee or tea this morning. Or do you subconsciously

[00:06:37] believe that financial worth displays how much or little your god loves you? This would be an

[00:06:43] version of Weber's theory regarding the Protestant work ethic. Previously, people believed that if

[00:06:49] they worked hard, god would reward them. Then this morphed into the trend of conspicious consumption.

[00:06:56] With status symbols such as designer labels, overtly screaming, look at me! My owner must be rich

[00:07:03] to be able to afford me so God must love her. I think that men are even worse than women

[00:07:09] at constantly measuring their social statuses. Two men meet for the first time and three questions

[00:07:15] are usually asked. What's your name? Where are you from? What do you do to earn a living?

[00:07:22] Watch your mind construct two distinct images when you hear one. My name is William, I live in

[00:07:29] Cupertino and I'm a Patent Attorney mostly involved with trademark litigation. Versus two,

[00:07:35] Ronnie, Idaho, I drive a truck. Names, cities and job descriptions all correlate strongly with

[00:07:43] social class. Scientific studies on happiness prove that once our basic survival needs are met,

[00:07:49] happiness increases only marginally with higher net worth. So it's interesting that our mind

[00:07:54] seemed to expend so much energy continually tracking our financial well-being. I try to live by the

[00:08:01] adage. Any problem that can be solved by money isn't a real problem and yet there are financial

[00:08:08] issues like the $304 parking ticket I recently received because such draconian punishment actually

[00:08:16] functions as a regressive tax that are so emotionally charged that I will lose sleep for days over

[00:08:23] them. So how does your mind think and talk about money?

[00:08:32] You just listen to the post titled Mindful Money by Ira Israel of IraIsrael.com and I'll be right

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[00:10:18] On Valentine's Day, about a month ago, the stacking Benjamin's podcast released a conversation

[00:10:25] between the host Joe Solcihi and I where we talk about love, soulmates, relationships,

[00:10:32] and how money plays a role in all of that. I shared the interview on social media and one person

[00:10:37] commented quote, for some people money is their soulmate end quote to which I responded quote

[00:10:46] and they may not recognize how tragically sad that is. Money is a dispassionate in personal

[00:10:53] tool. At our core, I think all of us desire deep soul rocking relationships but we settle for money

[00:11:01] when we're confused end quote. I think this is why Jim Carrey said quote, I think everybody should

[00:11:08] get rich and famous and do everything they ever dreamed of so they can see that it's not the answer

[00:11:15] end quote. We have the assumption that having a bunch of money and success will make us feel better

[00:11:21] but the thing is money is an external circumstance. Contentment is an internal state of mind.

[00:11:29] I think we exaggerate how much the external impacts the internal. Sure, there's a certain

[00:11:36] amount of improvement in our external circumstances that can make a huge difference in our quality

[00:11:42] of life but once we have a roof over our heads or clothed, fed and have access to running water

[00:11:48] and transportation more money doesn't necessarily mean more happiness or contentment. That's an inside

[00:11:55] job my friends. That should do it for today. Have a happy rest of your day and I'll see you on

[00:12:01] the Wednesday show tomorrow where your optimal life awaits.