Thoughts on “The End of Money” by David Wolman

The End of Money by David Wolman

 

Given the first six years of my adult life, my relationship to cash and personal finance is somewhat interesting. Straight out of college, I got a job working on Dave Ramsey’s web team. For those unfamiliar, the radio host and author espouses a back-to-basics approach to finances. The cornerstones of his message are avoiding debt in all its forms, saving up for emergencies and large purchases, and utilizing cash for day-to-day expenses. As I favor myself a common-sense person, I’ve been using this system since I was twenty-two. In specific, I’ve used the “envelope system,” literally driving to an ATM each payday to withdraw the cash needed for food, entertainment, and other expenses for the next couple of weeks. I have to say, thus far it has worked great for me and kept me from a number of monetary pitfalls.

That said, I was intrigued when I first spotted The End of Money by David Wolman. I confess that as much as I love learning and being challenged, sometimes I do avoid a book if I think the author’s biases and intent seem too obvious. Why take the time if I already know what they’re going to say, right? Indeed I have my own biases against credit card companies, banks, and their influence on our culture. That said, I finally consumed this book in audio form on a recent road trip, and it has given me some things to think about.

Though the initial chapter meanders through more of a narrative style, explaining how the author came to be interested in the topic at hand (and possible ties between the Apocalypse and a cashless society), the pace soon picks up with a history of money tracing back to its earliest appearances in civilization. While interesting to a fact-collector such as myself, the truly compelling portions come thereafter. I will only hit the highlights and sections which I found of particular interest.

Wolman points out that the notion of cash is so ingrained in modern Western culture that we are often blind to its costs. It is always assumed to be the cheapest way to do business for both consumer and merchant, but this can be far from true. First, there are the vast sums of government money required to mint, distribute, and monitor currency. The exact figures escape me, but I believe them to be in the billions per year. (As a fiscal conservative, anything that can be done to shrink the federal budget is a plus in my book.) Then there is the infrastructure required to shuffle money around, from bank vaults to armored cars to guards who attend it each step of the way. Lastly, there is the real cost of time involved in transacting with cash; if time really is money, the labor involved in businesses making change and keeping denominations on-site is more than negligible. True there are card processing fees (usually three percent) for vendors to account for, but in many cases the costs of manpower are higher. Could the efficiencies of moving to more of a cashless society actually spur economic growth? I think there are too many variables to say, but it’s a thought worth entertaining.

Further, there is often a psychological comfort to having cash in hand, as if it is the safest form of money. True, having a tangible representation may be one step above digits stored on a remote server, but there is nothing intrinsically valuable about coins, and much less bills. The reality is that we already live in a cashless society, passing around tokens of little worth, and we have since leaving the gold standard. There is nothing but good faith backing the dollar sign, whether it is on a screen or a piece of paper. As one driven by logic, I admit that this fact is compelling given the potential efficiencies mentioned above. There is nothing inherently safer about hard currency, and in fact the risk of carrying it may be greater in some cases with regard to loss and personal safety.

The last section which I found compelling deals with the argument that cash is actually a system which keeps the poor impoverished. It took quite a bit of explaining, but in the end I can see where the author is coming from. To those of us in developed nations, swinging by the ATM is an inconvenience, but to those without access to transportation or infrastructure, dealing in cash bears a much higher cost. Wolman states that the average cost of a bank visit for a consumer is around one dollar, considering time, effort, and other factors. To one who earns only a few dollars a day, this is a true hardship. In economies where electronic money transfer has been put into the hands of many via cell phone banking, growth has always followed. Saving money electronically is easier than hoarding bills which are always at the risk of being stolen. People seem able to lift themselves out of poverty more easily when the efficiency of electronic payment enters the picture. From this perspective, there may even be a philanthropic element to phasing out cash.

All of these points have led me to try an experiment. For the next month, I am going to try dealing in cash as little as possible. For a technology professional like myself, this may seem a little late in coming, but my method has worked well to this point, so I saw no need to mess with it. Given new information, however, I’m willing to take a second look. (This in no way changes my decision to live below my means and avoid credit at all costs, however.) I will be utilizing Mint.com to budget, track, and categorize spending, with the end goal being that I stick to my budget as well as a cash-based system. Honestly, I’m skeptical after years of having the psychological advantage of seeing bills dwindle from envelopes as the month wore on, but should the experiment succeed, I see no reason to continue making trips to the ATM. I may even gain more insight by having financial information to dig into in digital form. Ultimately, however, I am a pragmatist, and I will stick with whatever works best, regardless of the insights provided by the book.

Overall, David Wolman delivers an interesting and thought-provoking read on the nature of cash and its role in our society. Though it is thick on history and may meander from the central topic at times, the information he presents is clear and generally without bias, even if his personal worldview does poke through in a few editorial remarks. I say it’s worth a read for anyone loosely interested in economics or cultural trends.

The End of Money is available via audio book from the Nashville Public Library and multiple formats on Amazon.com.

Start (and End) With Why In Dating

Question Mark and Exclamation Point

A few years ago, I was introduced to the concept of “Start With Why” by Simon Sinek. The basic idea is to assess underlying motivations before beginning an endeavor. While its application is primarily focused in the business and marketing world, it is useful in most every sphere of life, particularly to a reflective creature like myself. What is my motivation for choosing one thing over another? Answering this question upfront can be a great filter to avoid heading down the wrong path entirely, even if the “what” (end goal) is worth pursuing.

As one still involved in the realm of dating, I’ve realized over time that the principle is particularly useful in that setting. Confusion abounds in my generation regarding the whole process. Friends and I have spent many a night discussing the opposite sex and whether there is a “right” way to approach the matter. I can’t help but think we would have avoided some of the perplexing scenarios if we had sincerely assessed our motivations beforehand.

It takes a brutal amount of self-honesty (a skill which I have yet to master), to start with why, but stop and ask yourself, “Why am I interested in this person?” On some level, it will be physical attraction, but is that the primary driver? Are looks dominant in the face of other factors that you know make a long-term relationship unlikely? Are you attracted to something in this person that is drastically different from yourself? Why? Are you just lonely and want someone? The answers to these questions can be hard to face, but if one is dissuaded from pursuing something unwise, the savings in time, effort, and trouble downstream are more than worth the discomfort.

Conversely, the “why” can be affirming, giving a green light to go for it. Maybe the attraction is based upon solid character qualities. Perhaps outer beauty is coupled with common interests and goals. Even an ambiguous answer need not be construed as negative so long as it’s honest. Sometimes someone really does just have a kind smile that makes you want to know them more. At least be aware if such a sentiment is your sole basis for acting. Then pursue dating if the “why” seems wise.

The more I thought about it, however, the more I realized that not only starting, but also ending with why is helpful for everyone involved. Dating is a process of exploration and collecting information. Ultimately, this information is used to make a decision: do I continue seeing this person or not? Having been on both sides of that decision over the years, I have never experienced an instance where ambiguity was helpful. It may be my strong tendency toward thinking (as opposed to feeling), but I genuinely appreciate knowing why things didn’t work out. The older I get, the better I am able to accept such information without taking it personally. Though my track record hasn’t been perfect, I always try to extend the same courtesy to others if they care to hear it. (Some don’t.)

The answer for why one is choosing to break things off can be even more uncomfortable and revealing than the initial motivation. After all, this is a person you presumably had some interest in, so what changed? Does her personality clash with yours? Does he seem flighty and unsure what he wants in life? Have things with another love interest progressed? Do you not find her physically attractive after the initial thrill wore off? The answer could be that you honestly can’t point to a specific reason; you just feel it. At least own the fact that you are deciding based purely on emotion and nothing quantifiable. Then share that information with the person if they want to know.

Of course, nobody likes to tell someone what they don’t like about them, but there are polite ways to say just about anything. “I’m just not that attracted to you,” doesn’t mean “you’re not attractive.” It means that the speaker personally is not attracted, and a mature adult will receive the message as such. Be aware, however, that your reasoning may say far more about you than it does the other person. Are you really breaking things off because they double-dipped in the salsa at dinner that one time? Acknowledging harmful tendencies is a starting point for fixing them. I’ve found that this practice brings unparalleled self-discovery and closure, often making it easier for both to move on with as few hard feelings as possible, certainly compared to giving no explanation at all. It may not always be pleasant, but if we’re all adults, I think it’s the most respectful way we can treat one another.

Starting with why is a helpful filter to begin. Ending with why is the clearest and kindest way to conclude. Dating in today’s culture is difficult enough without the damage of thoughtless pursuits and loose ends. Still, if my generation will take the time to reflect on what is driving us to make the decisions we do, just maybe we will end up with more clarity in an arena that has become all too ambiguous.