If you want to offend people, talk about religion and politics. I’ve discussed politics on TF, but have purposely avoided religion. Why needlessly stir a pot? Well, I have an argument to make about religion and personal finance or — more accurately — its antithesis: atheist personal finance.
I’m a huge believer in freedom of religion. I also think that the separation of Church (or Mosque or Synagogue) and State is a vital component of a free society. Proof: look at how America revolutionized freedom, in large measure by implementing secularized institutions (also by serving a well-deserved smack-down to the Brits). America doesn’t have an official religion. You’re supposed to be free to practice whatever religion you choose without undue interference. That whole “non-interference” thing is a lot more successful when the government doesn’t have its own Pet Religion.
And with that caveat, I’m going to go out on a limb and state something that may upset some Readers: Atheism is, by far, the belief system that is most consistent with personal finance success. Just to be clear, this is not me trolling you all. I think it’s true.
Atheism is about rationality. Money is rational. There is no magic to money. There is no unseen, imaginary realm. Abstract concepts? Yes — math is just a useful form of philosophy, after all. Financial markets arising from billions of bits and bytes? Absolutely. But money, whether gold or fiat or bit coin, can be reduced to existence by way of Occam’s Razor. Using a scientific approach — the idea that hypotheses should be proven with evidence as well as questioned (especially after being proven) — to personal finance would result in a lot less bull, stupid choices, and whiny debt bloggers.
“Faith is never having to say you’re wrong.” — unknown
Religion isn’t about scientific inquiry. I don’t say this to insult any belief system. Religion is based on faith which, in turn, trumps facts, logic, and evidence (in the eye of the beholder). A mind that accepts faith as sufficient to prove a claim is prone to accept other illogical premises. I’ve listened to Dave Ramsey’s show. He pitches Christianity at the start and end of every episode. And in between I hear him telling millions of his listeners to pay off their smallest balance first regardless of interest rate. That’s just wrong. Whether you’re a Christian with debt or an Atheist with debt, you will pay the least interest by ridding yourself of the highest interest debt first. Ramsey defends his little pro-bank hustle by saying it’s psychologically satisfying to close the littlest accounts. Well, if you’re religious, why not ask God to give you the strength to pay off your debts in a rational way that minimizes interest and fees? Oh, is God not powerful enough for Dave Ramsey to promote that? Hmm… Sheer faith, applied in non-religious areas of your life, should be scary to you — whether it’s faith in luck (e.g. winning the lottery) or faith that wealth will be appointed to you because you’ve lived a meek life.
“Isn’t it enough to see that a garden is beautiful without having to believe that there are fairies at the bottom of it too?” — Douglas Adams
Atheists don’t need to tithe. Giving away 10% of your gross income is an incredible impediment to building wealth. Sure, you get a portion of it back at tax time, but you don’t get anything near a dollar-for-dollar refund. If you want to get an unbelievable tax rebate, donate to Canadian political parties. Donations to religious organizations are a really expensive, poorly-targeted way to help people. Before you say this is an incredibly uncharitable stance, keep in mind that the most generous people in the world — Bill Gates and Warren Buffett — are atheists.
Atheists can use weekend mornings for sleep or activities that build wealth. No temple on Saturday nor Church on Sunday. An actively religious person, on the other hand, can not (unless you go to your religious service and treat it as a captive audience for your sales pitch). (Side note: I’m surprised Trent Hamm hasn’t calculated the gasoline saved by an atheist personal finance / lifestyle orientation. Oh right, he’s religious so he’d rather focus on using fewer squares of toilet paper and ignoring the risk of re-introducing diphtheria to the first world because he hates science.)
“The rich rule over the poor, and the borrower is servant to the lender.” — Proverbs 22:7
A brief survey of the texts of monotheistic religions reveals that, with exceptions, they’re anti-leverage. Judaism and Islam each bans usury (interest payments on debts; interest-free loans, however, are OK). Christianity, on the other hand, is a lot less consistent. The Old Testament is decisively anti-interest (allowing at some point an exception for charging interest to foreigners). Meanwhile, the New Testament seems to encourage fractional reserve banking — at least based on the Parable of the Talents.
OK, so being anti-debt is money-smart, right? We’re all going to live like no one else so, later, we can live like no one else! Wrong. Consumer debt is stupid but debt as a source of capital has been essential — no, integral — to the development of every industrialized economy. If you had a knee-jerk “debt isn’t good” reaction, jaded by America’s recent debt bubble and Canada’s imminent reckoning, please educate yourself by reading The Ascent of Money by Niall Ferguson. Or just watch the PBS series based on the book.
Leverage is almost impossible to avoid if you want to get rich. As much as Robert Kiyosaki is a snake oil salesman, he’s right about some things, e.g. Other Peoples’ Money and Other Peoples’ Time are essential ingredients for getting rich. Debt doesn’t require a business’ owners to permanently sacrifice a portion of their business just to obtain necessary capital. If you become really successful, you still only need to pay the interest rate on your loans. Once you’ve sold an equity stake, however, that potential wealth is gone forever. Further, if a business fails, debt is less risky than an equity stake. Often it’s securitized by specific assets and is always superordinate to equity. Debt is thus a cheaper source of capital than equity. In short, Warren Buffett says you don’t need leverage to get rich. But Warren Buffett uses leverage.
The whole point of personal finance is to build wealth. Unfortunately for Christians (yes, we are drilling down to a specific religion because I’ve seen at least a half dozen Christian-focused personal finance sites), the Bible does not look kindly on aspirations of wealth:
- “But woe unto you that are rich! for ye have received your consolation.” Luke 6:24
- “Go to now, ye rich men, weep and howl for your miseries that shall come upon you.” James 5:1
- “Then said Jesus unto his disciples, Verily I say unto you, That a rich man shall hardly enter into the kingdom of heaven. And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.” Matthew 19:23-24
- “For the love of money is a root of all kinds of evil.” Timothy 6:10. Really? Humans have proven themselves capable of an array of unspeakable evils, many of which have no pecuniary underpinning. John Wayne Gacy didn’t rape and murder children for money. He was a sick, evil monster who deserved death. (And, by the way, I’m in favour of a death penalty for proven monsters like Michael Rafferty; thankfully I can form my own moral code rather than adhering to a set of rigid, often inconsistent principles, e.g. “Let he who is without sin, cast the first stone.”)
(And, please, quote some agrarian “harvest while the gettin’ is good” Bible verses as a petulant challenge to my quotation of the unequivocal verses above.)
If you think the entire purpose of existence is to serve a jealous, celestial Kim Jong-Il (who by all rights shouldn’t need your support anyway) then why would you care about saving money? Run up huge credit card debt and spend your life savings on advertisements for your religion. “Store up for yourselves treasures in heaven” rather than on Earth — it’s the ultimate deferred gratification. Saving for retirement is a waste of time and potential. Obviously not, but you can see the problems that occur when we take the impact of Christianity on personal finance to its logical terminus.
“What happens to the faith healer and the shaman when any poor citizen can see the full effect of drugs or surgeries, administered without ceremonies or mystifications? Roughly the same thing as happens to the rainmaker when the climatologist turns up, or to the diviner from the heavens when schoolteachers get hold of elementary telescopes.” — Christopher Hitchens (who apparently underestimated the average citizen’s stupidity by omitting the popularity of homeopathy, iridology, chiropractic “medicine”, mid-wifery, chelation, acupuncture, naturopathy, and ear candling.)
Thou doth protest: “What about the Protestant work ethic?” Well, as somebody who has actually slogged through Max Weber’s “The Protestant Ethic and the Spirit of Capitalism” in its entirety for a sociology course, I can say with great confidence that the Protestantism to which Weber referred was vastly more ascetic and pre-determinist than any modern variant of Christianity I’ve heard about (except, perhaps, the Westboro Baptist Church). Also capitalism — to Weber — had become a disenchanted religion in a self-sustaining feedback loop that no longer required religion to keep going.
So, for the minority of you who haven’t closed your browsers in disgust, thanks for sticking around to read about why “atheist personal finance” is a reasonable topic and “<insert religion here> personal finance” is probably an oxymoron. If I’m struck down this week, you know who to blame. (Me, for eating bacon every day.)