. . . It happens that I spend a fair amount of time thinking and reading and teaching and writing about money. I talk about savers getting ripped off, about trustees who can’t be trusted, about accountants from whom you simply cannot ever get a straight count, and about geniuses like Warren Buffett who make their investors rich . . .
Money is a vital life enhancer. If you have it, you can enjoy life incomparably more than if you don’t. The great storehouses of travel, leisure, rest, refinement, appearance, health, above all, peace of mind – all of these are open to you if you have money. It doesn’t have to be millions, or even hundreds of thousands. But it has to be enough so that you can know from one hour to the next that you are not going to be starved, dunned by your creditors, thrown out of your apartment, put on the street, made to fear becoming homeless . . . [that] has made me consider once again my aging parents and how very different their lives are. My parents, who are not really rich, have never, as adults, as far as I can recall, been seriously worried about money. There’s a simple reason for that: they have always lived modestly, even frugally, and have always had wants that are modest compared with their means. They are not geniuses at investing and have never been wildly well paid. They have just been like the ant, laying aside money year in and year out, and now they have a comfy cushion around them. They have never come even close to the edge of having to spend more than they have. Their friends and colleagues of their age all seem to be similarly situated. What I keep coming back to is that the real Bottom Line is a simple idea that the savers know and the terrorized don’t: Money is not for spending. Money is first for saving, and then spending.
Or, you might put it a different way. Money is not for spending now. Money is for spending on a rainy day. If that rainy day doesn’t come in your life, it might come in your children’s or their children’s. Money is protection, the shield and the buckler for your family and for you. There is no new suit of clothes, no vacation, and no new car that can offset the pain of being truly worried about running out of money. I have had that fear. It comes at about five in the morning, and keeps you awake and makes your mouth dry and makes you hate the sound of the birds singing in the morning. It’s probably not realistic in my case, but I don’t want anyone I love to come even close to it . . .
The American Spectator, Benjamin J. Stein (March 1995)
We remember Ben Stein’s father Herb Stein. Herb Stein was chairman of President Nixon's Council of Economic Advisors between 1972 and 1974. It was a depressing time with inflation rising and an attendant ascent in interest rates. Given his position, Dr. Stein was at the center of the economic maelstrom and consequently had to repeatedly respond to the inflation questions from a persistent press. After months of such questioning, a frustrated Herb Stein, when asked by a reporter to explain why inflation was getting so high, put on a straight face and said, "If you take out all the things in the Consumer Price Index that have gone up, the index would actually go down.” At another press conference, when he got irked with relentless questions on the same topic, Herb announced, "The Nixon Administration is against inflation, and it is against deflation, we are for 'flation."
Ben Stein’s parents sound a lot like our grandparents, and to some degree our parents. Our grandparents and their peers were just starting out in life during the Great Depression. After experiencing those horrible economic times, saving for a rainy day became second nature. The first worry was their job; then to put money away to buy a home and educate their children. Stocks never entered their mind after the 1929 crash and the subsequent Depression years. Financial survival for them and their own was the order of the day. They did without and swore it would never happen again. And most of all they wanted to make certain their children had a better life.