Today, I want to show off some pictures that a friend just sent to me, so I've fabricated a contrarian personal finance opinion about babies. Neither the pictures nor the opinion is meant to induce you into reproduction, but it could have that effect (especially because the baby pictures are of my son in the squishy faced stage that yields maximum uterus quivering for women of reproducing age).
In case you can't tell from the picture on the right, I am a white woman, and I am married to white man. We come from remarkably stable and well educated families. In particular, I came from a family dripping with privilege of every variety. This privilege was not always so readily apparent to me, but these days I live in a lower class/lower-middle class neighborhood that is mainly filled with minority (mostly black) retirees, and one family with a son the same age as my son. We probably earn at least 2-4 times the neighborhood median, and we most assuredly fall into the category of "gentrifiers" or more kindly "urban developers". Either way, my privilege is something thrust in my face each day.
Living in this environment, the plights of Michael Brown and Walter Scott take on new meaning to me, and I can see first hand the environment that is more likely to lead in 16 years to the arrest, incarceration or death of our neighbor boy than my son. My socially aware friends on Twitter have pleaded that we "Start the conversation of privilege and racism," so this is my attempt. I expect that I have at least ten points to make, so this will only be Part I.
One of my recent favorite blogs is The single dollar, primarily because she links to Smitten Kitchen archives, and I really love the Smitten Kitchen.
Anyhow, she recently wrote about the Parable of the Savers, and how its pretty much the dumbest thing in the personal finance world. Which she is right about. However, I would like to explain why she (and I) are right from a "rightest" perspective as opposed to a "leftist" perspective. That is to say, I may attempt to use facts and made up numbers pulled directly from my ass to convince you of my position, rather than my feelings.
The parable of the savers exists to convince you to deploy money into the S&P 500 (preferably using a low fee provider like Vanguard) at a young age, so that you will be comfortably rich at an older age. Why will you be comfortably rich? MAGICAL COMPOUND Growth!!!!!!
Compound growth isn't Magical!
A few days ago, I posted that valuations of Stay At Home Mom Articles piss me off, I realized that one reason the article angered me, is that "Texas Man" did not really have to defend his and his wife's choice at all. I understand that the spirit of the article was meant as praise to Texas man's wife, but the effect of the article was a defense of a stay at home parent.
But here's my question: Why should it matter to me or anyone else that Texas man's wife contributed $75K or $0 to their family? It shouldn't. That's between themselves and God, and that's really it.
I think a lot of stay at home moms feel this horrible pressure to validate their choice to stay home with children (that they hopefully made with their husbands), and instead of asking for validation from their husbands, they have to go the internet and get it.
As a blogger who broadcasts the details of my financial life, I wonder if I am doing the same thing as "Texas Man". Am I merely trying to defend my financial choices? I hope not, my goal in blogging is to shape my view on finances, and help others to approach finances without fear. As a result, today I decided to defend why I don't have to defend my choices, and neither do you.
1. Money isn't a primary motivator in some choices.
As I outlined in our "Agile Personal Finance Manifesto", we value shared life vision over freedom from working. As a result, we've made several choices that are financially iffy, but great for us. For example, we started aggressively paying down our condo last year, even though we knew we would sell it as soon as our renters lease was up. Did this make sense? No, not at all, but we really wanted freedom from debt.
We also say that we desire ongoing financial contentment over striving to fulfill temporal desires. Sometimes, I want to do things that are great financially (like take a higher stress job to earn more money, start a side hustle, invest more aggressively, cut expenses further), but don't serve to foster contentment in my heart. One of my favorite Bible verses is 1 Tim 6:6, "Godliness with contentment is great gain." I would rather have contentment than wealth any day of the week.
Simply put, we try to control our finances, so that our finances don't dictate our choices. This is a great privilege that we haven't earned, but we are happy to take advantage of it, and I encourage you to do the same if possible.
2. Sometimes I make bad financial choices.
Here, I'm not even talking about scenarios with subjective value like in point one. Sometimes I'm just dumb. For example, my husband and I once bought a whole life insurance policy. That was patently a bad financial decision, and a bad life decision. We bought a house when I was 8 months pregnant, and my husband hadn't seen it (am I truly insane to have thought that was a good decision at the time?)
We did a bunch of investing with CapitalOne360 instead of Vanguard, and I'm pretty lazy, so I haven't switched 100% to Vanguard. It took my husband and I 18 months to notarize our wills. Sometimes I give to causes or people I'm not 100% sure that I would recommend to the entire internet.
These are poor financial choices. Hopefully, I'm not prepared to defend every single bad choice I make in a day. I just make them and live with the consequences. Maybe I can learn a thing or two.
3. When I'm defending, I'm not learning
If you are one of the 14 strangers who visits my blog everyday, I'm very thankful that you listen to my long winded, unedited rants. Even though I do rant a lot, both on the blog and in real life, I think of my rants as an invitation to destroy my convictions. I don't have to spend all my time defending my decisions; I can listen and grow and learn and change my point of view. If I'm too wrapped up in being convinced that I'm right*, I'll never learn anything and never grow as a human being.
*Please don't mistake that statement for thinking that I'm wrong, or that I'm wishy washy on my convictions. If I thought I were wrong, I would change my opinion. Also, I'm a big believer in having convictions even if there's a lot of grey area.