Hagerstown, MD, USA - June 2, 2014: Image of an Amazon packages. Amazon is an online company and is the largest retailer in the world.
Hagerstown, MD, USA - June 2, 2014: Image of an Amazon packages. Amazon is an online company and is the largest retailer in the world.

The Psychology of Money

Several weeks ago I read a review in The Wall Street Journal on a book titled, The Psychology of Money by Morgan Housel. It was a good review and I thought to myself that it might be an interesting read, but I ended up not purchasing it. A week later a friend gifted me a copy and left it for me on my desk. As it turns out, it is an excellent read. It doesn’t come from a Christian perspective, but it is full of wisdom.

One chapter of the book focuses on why so many people have inadequate financial resources, particularly for retirement. Housel says:

Spending beyond a pretty low level of materialism is mostly a reflection of ego approaching income, a way to spend money to show people that you have (or had) money.

Think of it like this, and one of the most powerful ways to increase your savings isn’t to raise your income. It’s to raise your humility.

When you define savings as the gap between your ego and your income you realize why many people with decent incomes save so little. It’s a daily struggle against instincts to extend your peacock feathers to their outermost limits and keep up with others doing the same.

People with enduring personal finance success—not necessarily those with high incomes—tend to have a propensity to not give a damn what others think about them.

Housel goes on to say that savings are created by less spending, and that occurs when people desire less. He then concludes that you will want less if you care less about what others think of you. This is why he believes that our financial lives are primarily influenced by psychological forces.

I however would go deeper, for I believe we are talking more about spiritual issues of the heart. This is what the Bible calls pride, which is an arrogance and desire to be superior to others. Pride is what causes us to seek to impress.

In Mathew 23:5, we are told the scribes and pharisees “do all of their deeds to be noticed by men.” Their lives are driven to win the approval of man.

C.S. Lewis calls pride, “the great sin.” He says it is a spiritual cancer that prevents us from being content with what we have. It is purely spiritual and far more subtle and deadly than all other sins. We readily recognize it and hate it in others, but cannot see it in our own lives.

To dig even deeper in understanding ourselves, we need to recognize we are haunted by a deep fear that our lives don’t really matter. Tim Keller says the worst thing for a human being is not being disliked or vilified, but being ignored and considered insignificant. We fear being unimportant and that our lives don’t matter to the people around us. This is why the human heart in its deepest recesses is always seeking self-glorification. I think this explains why there is a real and fundamental instability in our hearts because it is so easy to feel small and insignificant. As a result, we constantly look for ways to convince the world and ourselves that we matter and that our lives are important. What better way to do that than to live a lavish lifestyle that impresses others. However, it becomes an unending quest to prove to the world our lives have significance.

We will never find peace and contentment in this life until we come to terms with this conundrum. The ultimate solution is humility. The humble are continually at peace with who they are in the eyes of others. They are content with their position in life and what they possess. The humble are the only ones who are delivered from this great drive to prove to the world that “I am important!”


If you are interested in exploring the subject of humility, you may consider reading Richard’s book, The Power of a Humble Life.  Richard E Simmons III is the founder and Executive Director of The Center for Executive Leadership and a best-selling author.

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