If I have any readers with any actual knowledge of economics, please feel free to correct me on anything here.
There are *certain people* in my extended family who love to give financial advice. It basically is to live as cheaply as possible, save every penny, and invest it. Eventually, you will be rich, if you are still alive, and then you’ll be happy. Because buying things doesn’t make you happy. Only having a lot of money that you don’t spend makes you happy.
They like to tell me that most Americans are unable to do this. They like to buy new cars, and fancy clothes, and big houses. They buy all these things on credit, trying to keep up with the Joneses. If only they would scrimp and save, and invest, they could find true wealth.
What’s very funny about this is that investing in the stock market and decrying American consumerism cannot peacefully coexist. What do you think makes that stock market keep ticking up? Yes, other people investing in it, but any meaningful gain is predicated on businesses making money, (or else it is nothing but a Ponzi scheme). For that to happen, people have to buy things. Things they don’t need. On credit.
Right? If I refuse to buy a new car because I am super cheap, then invest that saved money in Ford, how can I criticize people buying cars? Without them, my investments would go down. If everyone would just buckle down and save money, then no one would be able to make any money because businesses would not turn a profit. And for many businesses, their most profitable branches are the ones that finance things in house. So the best thing that can happen to the stock market is for people to buy buy buy, and finance finance finance.
The choice to live frugally and invest your money does not make you exempt from consumerism. It makes you someone who profits off of it, rather than pays for it.
It still may be the smarter choice, but there is no moral high ground here. You don’t get to roll your eyes at people buying junk from Walmart and then go buy stock in Walmart.
So if you are financially comfortable, and are concerned about things like this, what should you do? Is there a way to ethically invest in the stock market? Should you buy more stuff, but do so consciously, and support small businesses? Should you just give it away? Luckily for me, debating what to do with all my extra money is not a problem I have. Or do you think the actions of any one person are just too small to make a difference, and it doesn’t really matter?
Does this mean I can get a new couch?