At last, we may have an “ism” that’s all good!
That’s what I thought going through reader responses to my “ZenReacher” column. All positive, all saying it was a good thing.
In case you missed it, the column was about how one of my younger brothers, a tugboat captain, had retired, sold his house, and devoted himself to living as an itinerant athlete, running marathons all around the country. Today, he is in his early 70s. He has an abundance of friends and places to stay and chooses what he wants to do.
What’s not to like?
As a lifestyle it epitomizes independence, builds on friendship and loyalty, promotes positive values, and has positive consequences. All good.
But does it have anything to do with personal finance? That, after all, is what I write about.
In fact, Reacherism — and a multitude of riffs on it — is about personal finance in all directions, from simple basics to the broadest cultural and deepest political implications.
Let’s start with the basics.
It’s All About Our Numerator and Denominator
We have two important money ratios in our life. One is our income (numerator) divided by our spending (denominator). When our income is greater than our spending, we have the beginnings of a workable money life.
Expressed as a number, this means a good life begins when the ratio of numerator to denominator is 1 or more. This applies throughout our working lives.
The most famous expression of this relationship didn’t come from a financial adviser. It came from Charles Dickens in “David Copperfield.” In it, he wrote:
“Annual income twenty pounds, annual expenditure nineteen and six, result happiness.
Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Our consumer culture tells us to focus on the numerator. We should always seek more income. Then we will be able to spend more. That, we’re told by unending advertising, will bring happiness.
When Less Is More
The Pursuit of More amounts to a cognitive disability, an inability to see how Less can also solve problems. This notion is beautifully explored by Leidy Klotz in his book “Subtract: The Untapped Science of Less.”
We usually ignore thinking about Less and dream about having more income. In fact, both work. More income. Or less spending. Few seem to notice that we have more control over spending than income.
Another numerator and denominator are important as we approach retirement. It’s the ratio of our savings in financial assets (numerator) to our spending (denominator). The higher the ratio, the greater our retirement security. Again, our culture (not to mention the financial services industry) encourages us to increase our financial assets.
The greater our financial assets are, the better our chances for happiness. (Or so the story goes.)
In both cases, smart spending can produce the same result.
A Long History
This isn’t a new idea. It’s just lost in the din of modern Wants. Henry David Thoreau may have been the first American Reacher, ex the mayhem. More recently, Duane Elgin identified the Voluntary Simplicity movement in the early 1970s. In the early 1990s, Vicki Robin and Joe Dominguez laid the foundation for the FIRE movement (Financial Independence, Retire Early) with “Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence.” Today an entire ecosystem of blogs and YouTube channels shows us all the fine details of living an independent life.
Unfortunately, the mantra of materialism continues to be “He who dies with the most toys, wins.” In his recent book “From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life,” Arthur C. Brooks disagrees.
“He who dies with the most toys dies,” he writes. That fact is a bit more important.
The personal dimension to all this is clear. Does it have political dimensions as well?
Very likely. It’s notable that both parties are only about More. Neither party wants to consider Less. Today we have a fully employed economy running at a huge, $2.6 trillion deficit. A sane person would likely recall the old Will Rogers saying about digging holes:
“When you find yourself in a hole, quit digging.”
Related columns:
Scott Burns, “The Zen Reacher,” 1/28/2024: https://scottburns.com/the-zen-reacher/
Scott Burns, “Less: The Road Not Taken,” 9/11/2021: https://scottburns.com/less-the-road-not-taken-the-alternative-to-decades-of-war-in-the-middle-east/
Scott Burns, “Rearranging Our Life and Our Economy,” 9/25/2022: https://scottburns.com/rearranging-life-and-our-economy/
Sources and References:
Arthur C. Brooks, “From Strength to Strength, ” on Amazon: https://www.amazon.com/Strength-Finding-Success-Happiness-Purpose/dp/B08WDN9LSM/ref=sr_1_2?crid=2G3NYDKKGQH7Z&dib=eyJ2IjoiMSJ9.5Xfh54rWJ1WtSu_F9mDKadEA-7jxE4GfeX2pwFuXgcv-dnpAvvBnVgyTrqlL_G5otqtLJF9lfK8q88gm7EHsZD0Z0myD_pharnZoYJ6pEYB1yYDn2nUGI-hJu5dMVIiTg_BijQ6vKBl8Z3jNBYrR7lzYLBxkYDVUAn3pdL4Plh167gRBMcvMXu7KFCPj1OSm5lloQM0-mdveMrQCg8McqC4PKdiBePPtAqaCyFu-Jzk.NI6du8oB8IEG9neO7sqxL09U7U02JSR8CbY9zo__fIU&dib_tag=se&keywords=arthur+c.+brooks&qid=1710354600&s=audible&sprefix=Arthur%2Caudible%2C128&sr=1-2
This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.
Photo: Scott Burns, 2024. Taken April 8 as eclipse darkens Hill Country
(c) Scott Burns, 2024