#21: The merits of money are negative

8th February, 2021

Welcome to the Idiot Money newsletter. The worst newsletter except for all the others.

This week: becoming wiser with money by understanding that money's usefulness is far from linear.

We treat money as infinitely useful. It sort of is. But not to each of us as individuals.

‘The merits of democracy,’ Bertrand Russell wrote, ‘are negative.’ He meant that democracy doesn’t guarantee good government, but it protects against the worst evils that pop up when we give power – as we inevitably do – to those maddest for it.

With one major exception, in the hands of a single individual, the merits of money are negative, too. It doesn’t need to be this way. And it shouldn’t be this way. But because of how we’re commonly wired to exist with money, it is.

Thanks to the selfless work of billions of blind idiots and their trillions of well-intentioned but rather panicked transactions, we know that money enables Good Things at best unreliably or fleetingly. But a certain level of money is insurance against Bad Things.

Cheapest usually signifies worst. But most expensive usually signifies waste, and the chance for an insecure idiot to brag about making another poor life choice.

A more expensive hotel could easily set holiday expectations ruinously high, or shield its inhabitant from valuable eye-opening experiences. Staying somewhere so shit even the anecdote gods can’t save it, and where only the truly happy could sleep with a smile, would ruin things in a different way.

If you made my flat any smaller, you’d start to eat into the space to swing a kettlebell; this would make my life worse. But if you doubled its size, there’d simply be more to hoover. And if you made me pay for the extra space, I’d have to work for another couple of decades.

Wearing clothes that are ill-fitting, or emblematic of the Capitol-storming catwalk is bad for you. But their appearance on a more gilded catwalk doesn’t make them good for you. If you can’t feel good wearing not-crap clothes, your problem isn’t the clothes, just as (per last week) if you can’t live well being one of the richest, most opportunity-laden people that’s ever lived, your problem isn’t money.

The threshold theory of good living

This ‘threshold theory’ pops up almost everywhere money is involved, because (partly for the reasons discussed in Idiot Money #18, among a ton of others) beyond a threshold which is lower than just about everybody believes it is, we’re incapable of scaling how Good we feel with how expensive stuff is.

This isn’t limited to possessions.

One benefit of money is that we don’t have to do things because of it. If you’re poor (not just broke) every action (and by extension your life) is an expression of your financial situation. Move away from poverty, and you get the opportunity to flip this – to use your finances to express your soul.

For example, having enough savings so you don’t have to take the first (possibly unsuitable) job you can following redundancy is great. But it’s not the same as actually finding work that energises you, rather than work you endure for a few decades in the hope of not having to do it one day.

Given the unique role most people’s jobs play in determining the Goodness of each day (and therefore of their lives) of all the rare opportunities to use money to truly level-up your life, the opportunity to find fitting work is perhaps money’s greatest material benefit. But providing the opportunity isn’t the same as guaranteeing it’ll be grasped.

For reasons we’ll look at another time, there is a depressing correlation between those that have this opportunity and that end up taking work primarily for the money anyway. There’s also a limit. How much runway does anyone conceivably need to find a fulfilling means of earning money? A few years buys time to look. A few decades sells your soul to never looking.


The benefits of money should go beyond this.

We have all invested in things (sometimes possessions, often relationships, usually character traits) that have transformed the quality of our lives, made our souls sing. But in the context of how we think, act, and spend all day, every day, they are the exception, not the rule. Depressingly, our deep-seated self-deceptions prevent us from learning from what worked and what didn’t, even missing the intro course on how the value of the transformation never correlates with its monetary cost.

The application to advice

This has – I hope obvious – consequences for advice, whether you’re giving it, or receiving it.

Most financial advice is at its best when it sticks to saying ‘don’t do mad things’.

Yet there’s greater value in reminding people of the link between ability and responsibility (to self and others), not making it easier to forget about it.

And there’s greater value still in reminding people of the one major exception I hinted at above.

For much as it’s a bit crap at directly leading someone to live a Good Life, to fulfilling their potential, money is a great tool for the sort of clearer seeing that does bring that about. It is the examined life that is worth living, and there’s no easier way to examine your life choices than by checking your credit-card statement.


We should actively want to embrace a process of examination, refinement, and checking what works for us in a constantly shifting set of internal and external circumstances, so we don’t get stuck blindly equating wealth with waste, standard of living with access to comfort, and quality of life with cost of life. (Unless an ultimately unfulfilling life of bourgeois insignificance, sat atop a physically and mentally incapacitating conveyor belt amid a world to which you proudly make damn all difference is actually your thing, in which case, fair thee well, but you probably want to unsubscribe).

Because we want an artistic life, not an expensive one. One that expresses the otherwise inexpressible complexity of us. That is filled with moments like walking on air after truly connecting with or otherwise helping a fellow human. And in which we’ve controlled our environment so that it inspires behaviours that make us smile each morning upon leaving the house. This can include material things too – items that each time we contemplate them remind us of the amazing trade we made that sustainably improved our life, not just insured us against it being obviously rubbish.

Money Maxim of the Week

This week: Trigger #6: On average

Train to hear these words and phrases as you do you own name across a crowded room, then stop and check that the belief underlying your automatic reaction is true.

The world isn’t short of happiness research. And while studies can be great guides for experimentation, they’re often awful for prescriptions, especially when it’s only the headline anyone reads.

Cultivating certain psychological traits, owning pot plants or gratitude journals may make people 10% happier on average, but that doesn’t mean: a) you should follow what worked for someone else without examining how well it’s working for you; or b) preach about what does work for you.

You are neither an average, nor a universal representative. Be quicker to run your own experiments than to blindly share the headline results of someone else’s.

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