Live By Your Own Personal Values and Yardstick - Step 10

Your Personal Values and Ability to Live By Them Will Determine How Much Financial Freedom You Enjoy.
Use Your Values, Not Those of Others to Measure Your Satisfaction

Americans are in the top 1% of the world’s population in terms of worldly possessions! Every one of us is wildly wealthy by the “average world’s standards” … we just don’t recognize it!
If you look at the representative “Global Village”, see how the rest of the world is like compared to what we experience in the U.S.Of 100 people:
- 50 would be malnourished
- 70 can't read
- 80 live in substandard housing
- 6 have half the world's wealth and they live mostly in the U.S.
America’s 102 million households currently consume more stuff than all other households throughout history put together … and we keep consuming because we think it is normal!
Then and now … from the late 40’s to today … the average size of an American home :
- 750 sq. ft. 950 sq. ft. 1100 sq. ft. 1350 sq. ft. 2300 sq. ft
- Today … many homes have garages larger than entire homes in the 1950’s
- We have just reached a milestone in the U.S. … more cars than registered drivers!
The majority of Americans have lost any concept of personal willpower to resist spending :
- In 1999, Americans spent $200 Billion on holiday gifts … more than $850 per consumer!
Yet pollsters are told that Americans want less emphasis on holiday spending and gift giving … a third cannot even remember what they gave their spouse the previous year … often forgetting before they are even finished paying for it! What does that say about your values an d the values of others?

John Stuart Mill …“Men do not desire to be rich, only to be richer than other men. As soon as rich becomes available to the likes of us, it will no longer be rich.”

Think about your values regarding pursuit of wealth.

The Question Regarding Your Values Is …

Do you use an internal yardstick to measure the quality of our decisions which is based on what makes the most sense from a wise personal standpoint .... or do you use an external yardstick that drives financial decisions based on what external forces want us to have or to be?

We have defined our personal values and lifestyles using an “external” yardstick … society, advertising, family expectations, friends, etc. But, values and lifestyle must be defined using an “internal” yardstick for us to ever enjoy the benefits of financial health.
- External forces are always acting in their best interest, not yours!
External versus internal yardstick using the example of an automobile:An internal yardstick would consider the need for wise transportation.
- Is the car a good value?
- Does it fit the size of my family? < /LI>
- Does it get good gas mileage?
- Does it have a good repair history?
- Can I afford it?
- Etc.
An external yardstick would consider external forces that other people think are important.:
- Will it impress the neighbors?
- Does it make me look successful?
- Does it make me feel powerful when I am behind the wheel? < /LI>
- Does it have all the latest features?
- Is it the newest most up to date model?
- Etc.
By the time we are age 20 … we have watched over 1 million commercials … each one pushing an external yardstick on your life and influencing your values.
- It is a fact … people who watch a lot of TV have highly inflated views of what the “average American” has. Since their own expectations have been inflated, they spend more and save less. TV has a huge impact on your values

The story of the three builders speaks directly to the issue of “What are your values and yardstick are you using?”

There is a story about a man who was walking by three stone workers going about their labors.

He asked each one of them what they were doing ...

One man said he was, "Working at chipping away stone."

The second man said he was, "Working to earn money to support his family."

The third man said he was, "Building a magnificent cathedral for the glory of God."

Each man gave a correct answer ... but their perspectives were different based on the personal values and "yardstick" they were using to measure their efforts.

It is the same with us...

The yardstick whereby we measure our efforts will determine our perspective. Are we investing our lives "chipping away at stone," or are we "building magnificent cathedrals?"

Live by the “Principle of MAX” … Maximum Acquisition eXperience

Understanding this is important to understanding your personal values and how you spend.

MAX is the point at which the greatest enjoyment of possessions is reached on a scale of the quantity of possessions.

In essence it is the point where there is the highest ratio of "joy to stuff." Or your personal values v. stuff

If you were to graph on a scale using two axis called "Enjoyment of possessions" and "Dollars spent" and then tracked from zero the movement of a line as more dollars are spent and enjoyment of possessions increases ... there will be a point where as more dollars are spent, the enjoyment of possessions actually goes down.

personal values and spending

The graph will look different for everything possession acquired.

For example ... the first newspaper purchased will increase the joy of acquisition as money is spent.

But, with every additional newspaper, the joy decreases because there is no additional joy in having two identical newspapers.

As you acquire more newspapers, having them becomes a burden and joy decreases. So, MAX occurs at the point of acquiring one newspaper.

Another example would be TV's. As you acquire your first TV, enjoyment increases.

It may increase a little with a second TV and might even increase slightly with a third TV.

However, there will be a point reached where each additional TV purchased will decrease your enjoyment of acquisition as you end up having more TV's than can be watched and more TV's to store and have to decide what to do with.

Clothes or shoes are another example. There is a point at which you have just the right number of shoes for MAX ... once you get beyond that point, every additional pair of shoes decreases your enjoyment per dollar spent because they take up too much room and you are always tripping over them in the closet, etc.

We all need to find MAX in our lives with the possessions we have. Examine your personal values.

Most Americans today have long since passed MAX and are on there way to "less happiness for every additional purchase made."

Each of us must be aware of our need to strive to live at MAX so we can derive the maximum satisfaction from the least amount of money spent.

Post this to the bathroom mirror!

If you do not pro-actively define your lifestyle based upon your own personal values and internal yardstick … the world around you will define it for you!

So, what do we do now?

Set aside a day and make a list of every case you observe where some external entity tries to determine for you what personal values and lifestyle yardstick you should use.

Then ask yourself what areas of your life are presently defined by external yardsticks rather than internal yardsticks and your personal values.

Previous Personal Finance Lesson Next Lesson