Wallstreet: On Money
Wallstreet.
Bud Fox, a rookie New York stock broker, idolizes Gordon Gekko—a soulless business icon living by the mantra “greed is good”. Intoxicated by Gekko’s money, status, and power, Bud seeks mentorship. He earns the opportunity. Bud absorbs Gekko’s corrupt ways, abandoning ethics entirely.
Bud is betrayed.
Gekko exploits Bud, manipulating a shut-down of his Father’s airline. Promises were made—jobs would be secure; the company remaining operational. These promises are broken.
Bud counter-punches, manipulating the stock to protect the airline, secure the workforce, and punish Gekko financially.
It works.
Bud is quickly caught and sentenced to jail. The final blow is his—Bud records a conversation as Gekko confesses everything. The authorities strike immediately.
Ironically, Wallstreet arrives shortly before the October 1987 stock market crash known as Black Monday— a 22% one day drop of the Dow Jones Industrial Average.
Ultimately, Wallstreet is entertaining. The thesis, however, is wrong.
Money is not greed.
Money is freedom. Money is opportunity.
We are ingrained with the belief money is immoral. Money is the root of all evil. Money equals greed. The reality is quite different—money is a tool of exchange; nothing more—and a tool positive progress demands.
You must outgrow the belief financial prosperity is an unethical goal. Your income is a direct result of the value you add to others; the more you are making—the more value you are giving.
This should be a tremendous source of pride. Not shame.
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The Engine of Compounding Interest
Dear twenty-something: if you will hold out on a status symbol car, we just earned you 1.5 million dollars.
Here’s how.
We’ll assume a car payment of $450 a month. For the average consumer, this is a life-long expense; the thrill of a new vehicle every few years meaning constant automobile debt.
We’re not going to buy a new car. We’re going to buy a practical, reliable vehicle with the cash that would have been a new car down payment— or skip buying a car entirely, using electric transportation, carpooling, and Uber as needed. If living, working, and attending class within a three mile radius, a bike is more convenient than the car you don’t need.
We’re going to take our $450 a month and begin investing. For this example we’ll forecast an 8% annual growth rate, starting at age 25.
The S&P index, historically, doubles just over every six years.
The years go by. The money builds. And builds. And BUILDS. Through the engine of compounding interest, at age 65, your investment is worth 1.5 million dollars.
We just bought future you a house. A grandchild’s college tuition. The means to travel anywhere you want. The means to live anyway you want.
Define your vision on your terms. Start investing now, and it will be yours.
Back to the car you want, but don’t need.
Those high status rides on the showroom floor certainly look nice. How easy it is to get caught in the fever of “I deserve this”; “I work hard enough”; “you only live once”; and other such pacifying logic masking a horrendous emotional buying impulse.
Before signing the loan on an unnecessary status symbol, tell yourself this:
Nobody else gives a shit. No one cares. No one but you.
And six weeks after the purchase, you won’t either.
The magic quickly fades away. The payments do not.
No pouring your money into a depreciating asset. Put that same money to work building the freedom future you deserves.
Form this habit now: invest 15% of every dollar you make. Do so religiously, and future you is an automatic millionaire.
The 15% rule is not just for twenty-somethings. Younger; older—it does not matter. The right time to make 15% a habit is now. Time is wealth’s greatest ally. Leverage every moment.
“It’s a zero sum game - somebody wins, somebody loses. Money itself isn’t lost or made, it’s simply transferred - from one perception to another.”
Gordon Gekko is wrong: money is not a zero-sum game. A rising economic tide lifts all boats. Stock dividend payouts add new wealth to the economy.
Money is not a finite resource.
Time, however, is.
The one absolute for us all: our time here is limited. Money isn’t greed. Money is the freedom to use our most precious asset—our time—as we see fit. The freedom to live a life rich in purpose and meaning defined by our terms.
The greatest Philanthropists in the world didn’t do it by asking others for money— they did it from the fruits of their labor and the generosity of their soul.
Money is freedom. Money is opportunity.
Future you deserves both.
Mark Joseph Huckabee
