The Illusion Factory Part One

an excerpt from Mindful Money by Jonathan K. DeYoe

“What’s money? A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do.” — Bob Dylan

We live in a world of illusion, and these illusions keep us from our happiness — especially around money.

Money drives our world. We organize our whole lives around it: earning it, worrying about it, spending it. Yet many of us are taught next to nothing about it. The whole point of Buddhism, and all forms of mindfulness, is to deal with what is, to look reality straight in the eye. To sit with it, breathe it in, hold its hand. To “wipe the dust from the mirror,” as the Buddhist saying goes. When it comes to money, most of us rarely, if ever, deal openly with what is. We spend our entire lives chasing fantasies or running from our fears. Money is the eight-million-pound gorilla sitting in the middle of the town square. We bow to it, serve it, fear it, beg for its blessings, but we don’t discuss it. We behave as if money is our god, and we avert our eyes in deference.

In elementary school, we learn a thing or two about currency. We’re taught how to make change from a five and how to figure sales tax and tips. In middle school or high school, perhaps we take a home economics course that shows us how to balance a checkbook and manage an online bank account. Lesson complete. Whew.

We don’t learn the simplest truths about money itself — such as its nature and how it grows. In fact, many people are actively discouraged from learning. We are taught that money is private. It’s rude to bring it up. Casual questions from a child, like “How much did that cost?” and “How much do you earn?” are met with admonishments, as if the child had just asked, “Why are you so fat?”

Most adults treat money as a private topic, one they are uncomfortable discussing, and children learn that discomfort, not the reasons for it. They are left to piece together the “truth” for themselves. They shuffle past the giant gorilla every day and create their own mythology about it. These myths are based largely on emotion rather than knowledge.

It doesn’t have to be that way. I was extremely fortunate as a child. My economics education started early. Conversation at my family’s dinner table was different from that at my friends’ tables. We talked about finances. We talked about taxes and investments. We talked openly about how much money my dad and mom made. It wasn’t a lot! We talked about how much this pair of sneakers cost versus that pair of sneakers, and the relative merits of each. We understood limitations and trade-offs. My parents walked me through their tax returns when I was nine. I bought my first stock that year, too. I was exposed to the simple what is of money, not the fears and secrecy. It’s no accident that today I find money fascinating and fun.

Many people are not so lucky. They absorb only illusions about money put forth by three main sources: family members, culture and media, and Wall Street.

Family Illusions
All of us grow up absorbing our parents’ relationship with and feelings about money. Most of this learning is observational, not formal. Perhaps we learn, for example, to be afraid of talking about money because money makes people fight. Or that money causes anxiety. Or that earning a lot of money is a game we must try to win. We learn these beliefs before we know we’re learning. That’s what makes them so difficult to untangle later on.

When we are formally taught about money within our families, these lessons are usually colored by beliefs inherited from our grandparents or great-grandparents.

Many of these beliefs about money are rooted in simple pleasure and pain, in attraction and aversion. The Buddha observed that life is suffering. That is, life inevitably confronts us with pain and discomfort. When it does, we often react reflexively to try to remove the causes of pain and increase the sources of pleasure. Neither of these solutions are lasting, however, and so our efforts end up generating more pain in the long run. Out of this endless cycle, suffering is born.

Human beings are even more motivated to avoid pain than to pursue pleasure. This means most of the so-called truths we live by and pass on to our children are based on pain avoidance. Pain avoidance is a very primitive, reflexive way of living. It does not look at the big picture or the long term.

For example, when it comes to money, many people inherit a fear or distrust of “the stock market.” Where does this fear come from?

It may come from the Great Depression. It may come from the late-1990s dot-com collapse. It may come from the Great Recession of 2008. Yes, the stock market is volatile and frequently experiences losses, occasionally huge losses. But as the Buddha also observed, the nature of life is impermanence, which is why another thing we can reliably say about the stock market is that over time it grows. The stock market bounced back from each of those historic crashes, and in fact, it has recovered from thirteen major dunks of 20 percent or more since the end of World War II. The market will continue to grow as long as there are people in the world who seek to improve their lives. That’s the investable thesis, in my opinion. Everything else is just smoke and mirrors.

When we buy into illusions like “stocks are too risky,” we may succeed in avoiding the heartache of short-term loss, but we will invest our money in a way that cannot possibly keep up with the rising cost of living. The real danger isn’t losing money in the stock market. The real danger is outliving our money because we failed to grow it sufficiently to keep pace with inflation.