S. W. Moore teaches spoken English, business English and U.S. history at Datong University in China. He writes articles on various topics.
Work Builds Virtue
It has often been said that when you invest, you should invest for the longterm. Do not invest your money expecting to be rich within the first year. While investing, if done right, is a great way to build wealth, there is another aspect of the idea of time that should be considered when talking about building wealth and financial independence: work.
When people work, not only are they building their wealth through income, they are also gaining a little bit of that virtue called patience each day as they slowly increase their worth through labor. When one has had to spend time, work, and money on something, they tend to appreciate it more. There is something about working for something that causes people to place more value on it. Following are a few examples that show the value of hard work.
The Little Green Mower
One thing I can remember from my childhood was my first lawnmower. I was about nine or ten years old at the time; my brother was a couple years older. We had decided we wanted to spend our summer making money by mowing lawns. We had two problems though: we had no mower, and no money to buy one. Seeing our predicament, our dad offered to loan us the money with the understanding that the first $80 we made would go to him (the price of the mower). Even though we would have probably wanted to spend our first "paycheck" on candy or toys, we dutifully put those things off and used the first 8 lawns to pay back the loan. Even though we had to wait to be able to use any of the lawn mowing money to buy what we wanted, the feeling of accomplishment and satisfaction we got from buying our own mower was way more than any feeling the candy and toys could have given us had my dad just given us the mower. That little green mower with the Briggs & Stratton engine will always hold a place in my heart.
This type of gratification does not come just from working and saving up for something, it can also come from instances where you make something yourself, as opposed to buying something ready-made. In an article on psychologytoday.com there is an article that talks about what some psychologists call the IKEA effect. In it the author discusses research by Mike Norton et. al. that states that "the act of building something, putting your own blood and sweat into a physical object, seems to imbue it with additional value above and beyond its inherent quality." He goes on to say that in experiments where people put something together on their own (i.e. IKEA furniture) or made something themselves such as origami figures, they tended to put a much higher value on their items than did people who simply saw the finished project. He finishes the article by saying "saving yourself the labor could just cost you some happiness".
The Boy and the New Pair of Shoes
A few years ago a friend approached me with a problem he was struggling with. His son, who was 5 years old, was about to start kindergarten. My friend had recently bought a new house in a fairly well off neighborhood. On the first day of school, all the other children showed up to school wearing expensive name brand shoes. His son came home that afternoon and told his dad that he wanted shoes like the other boys had. Now, my friend had grown up bring closer to poor than rich. He knew what it was like to eat beans and rice; he had spent summers without shoes. He had experienced a life where two sets of clothes (one for play, and one for school) was plenty. Even though he had done well for himself, he could still remember doing without as a child, and he was leery of spending exorbitant amounts of money for a child's shoes. It was not that he was unable to afford them, but he would have felt guilty about it. He wanted to do it for his son, but he could not bring himself to do it. He asked me my opinion, and here is the advice I gave him, and it is the same advice I would give to anybody with the same question.
This is a great opportunity to teach the boy a valuable lesson. Take him to the shoe store and pick out two pairs of shoes: one inexpensive pair, and one expensive brand name shoe. Tell him he has a choice of which pair to get. If he picks the cheaper pair, he gets them for free. Dad pays for them at no cost to the boy. However, if he wants to get the expensive pair, he must work for them. If he decides he definitely wants the expensive shoes, then take him home and give him a plastic bag. Then father and son go outside and walk down the street picking up trash. When the bag is full he can put it in the dumpster, and now the job is done. He has paid for his own shoes with a little bit of sweat and elbow grease. Not only has the boy learned a valuable lesson about the value of a dollar, and a little bit about what it means to work, but father and son also get to spend some quality time away from the television and cell phones. Not to mention the fact that their city is a little bit cleaner. The lesson, though, can be extended. When the boy has outgrown the shoes, he can give them to another boy who needs shoes but cannot afford them.
No One Owes You
When it comes to waiting and working for happiness, money is no different. You will always appreciate the money that you have had to work for as opposed to that which was handed to you. There have been times in my life where I was in debt, and was getting behind on my bills and payments. During these times I have had friends who were well off, or had acquired a fairly large sum of money. Maybe they had inherited it, maybe they had gotten a bonus at work, or maybe they had found something of great value in their attic and had sold it for a fairly large sum. I would think during these situations about how nice it would be if I could be given a large amount of money in this manner. It never happened. I would also secretly hope that one of my friends would notice my "poverty" and give me a little bit of their gains. They never did. These situations were some of the best things that ever happened (or did not happen) to me. When I finally saw that the world was not going to serve up money to me on a golden platter, I realized that if I was ever going to get my finances in order that I would have to do it myself. Even though it has taken me some time to get out of debt, the feeling I have now is much more invigorating than if I had just been given the money.