What is the greatest deception in the history of finance?  Depending upon your perspective, some entities and events of deception that come to mind might include corporate accounting scandals, rogue traders, Ponzi schemes, and various entities and events related to the financial crises (market bubbles) throughout history.

“The greatest hazard of all, losing one’s self, can occur very
quietly in the world, as if it were nothing at all.  No other loss can
occur so quietly; any other loss — an arm, a leg, five dollars, a
wife, etc. — is sure to be noticed.” ~ Soren Kierkegaard

In terms of damages caused by these entities and events of deception, the financial losses, some of which are in the hundreds of billions of dollars, are the most tangible and easiest to measure.  Using the most recent and obvious reference point, the current financial crisis slashed retirement assets in 2008 by nearly $4 trillion, as reported by Reuters.  This decline in assets is epic in proportion; but what is the non-monetary cost and what led most of these people to place their life savings in the stock market to begin with?

Returning to the question of what is the greatest deception in the history of finance, consider this scenario:  Hundreds of millions of people are led to believe that one particular financial pursuit, which, to accomplish, requires the largest financial effort of a lifetime; but more importantly, and for most people, it is also the most physically and emotionally taxing effort of a lifetime; working in various unsatisfying and stressful jobs and sacrificing meaningful pursuits for this one financial pursuit; and the effort requires 30, 40 or even 50 years of time, assuming the end destination of this pursuit is ever reached — or if it even exists… and this doesn’t include the $4 trillion decline (see above)…

This financial pursuit, this deception, is called financial freedom.

“Man acts as though he were the shaper and master of language, while in fact language remains the master of man.” ~ Martin Heidegger

The idea of financial freedom is no conspiracy to deceive the masses; but it sure has sold unimaginable amounts of financial products and services!  Furthermore, how many books, websites, blogs, magazine articles, media advertisements and financial planning sessions have used the term financial freedom as leverage to sell something?

Financial freedom is such an overused and abused term that its meaning is bordering on abstract.  As of this posting, a Google Search for “financial freedom” produces more than 33 million results.  What is financial freedom anyway?  Who decides the meaning? How can one be free if their idea of freedom is defined by someone else, or not defined at all?  Does financial freedom even exist?

Common words, phrases and abstract ideas can be practical for use in language and mass communication; but for an individual to spend the predominant amount of financial and non-financial resources of a lifetime for something that has not been clearly defined for the individuals particular life, how can this not be described as anything but aimless, illusory or even the greatest deception in the history of finance?

“Ever more people today have the means to live, but no meaning to live for.”~ Viktor Frankl

The true deception of financial freedom need not be blamed on anyone but oneself; however, this is not necessarily an intentional deception — it is a result of the human condition.  As humans, we are constantly searching for patterns that will reveal the shortest distance from point A to point B; and we are searching for meaning and fulfillment; but we trick ourselves into believing that we are searching for pleasure — and money buys pleasure, at least according to the thousands of implicit and explicit messages we receive on a daily basis.

Certainly, the messages of media noise and social conventions are difficult to ignore.  Nearly every media (print, television, Internet) image you’ve seen in your life implies that your current existence is lacking something — and this something is a certain article of clothing, a watch, a beverage, a pill, a car, a house, an investment strategy or particular physical appearance — to be somebody other than who you are now — all of which can be purchased with money (whether it be your money or someone else’s money).

So, if wanting more is a natural human behavior and we are deluged daily with enticing messages that encourage and support this behavior, what can be done, if anything, to manage this challenge?  To help make my point, I will defer to an anecdote delivered to MBA graduates of Georgetown University, back in 2007, by Jack Bogle, founder of Vanguard:

“At a party given by a billionaire on Shelter Island, the late Kurt
Vonnegut informs his pal, the author Joseph Heller, that their host, a
hedge fund manager, had made more money in a single day than Heller had
earned from his wildly popular novel, Catch-22, over its whole history. Heller responds, ‘Yes, but I have something he will never have: Enough.’ “

In summary, the best way to “get rich quick” is to be content with “enough.”  What greater tragedy can there be than to chase something for one-half to two-thirds of a lifetime that may not be actually acquired by the means for which you have sacrificed?

“If thou wilt make a man happy, add not unto his riches but take away from his desires.” ~ Epicurus

To conclude, there is no such thing as financial freedom, at least not in the conventional sense of the term, which is the great deception.  Paradoxically, the pursuit of financial freedom is closer to slavery than it is liberating.  Furthermore, and in my humble opinion, freedom cannot be procured by financial means — freedom most likely lies at the point at which the utility for money begins to diminish — the point at which the basic sources of physical well-being — food, shelter and clothing — have been met.  Beyond this point, freedom cannot be procured by financial means, yet millions continue pursuing the idea of financial freedom.  This is the deceit.  This is the illusion.

True freedom begins by learning contentment — by the realization that you already have “enough” — where the search for pleasure can be replaced by the search for meaning.

——————————————-

Kent Thune is the blog author of The Financial Philosopher

Category: Finance, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

47 Responses to “The Greatest Deception in the History of Finance”

  1. Jay Salter says:

    Kent, you’ve stumbled on a 2,500 year-old bit of wisdom called Buddhism. Welcome to the club.

  2. tawm says:

    Terrific comment. In the same way, many of the current major issues (i.e. Climate Change) should be brought down to an individual level — what can I do directly to help the envirornment, use less water, energy,and resources; re-use and recycle materials…. But then again its much easier to scream and whine and point fingers at Les Autres……

  3. DL says:

    “True freedom begins by learning contentment — by the realization that you already have enough”.

    I agree with the foregoing. Nevertheless, there is value in having enough money in the bank so that you don’t have to work at a job that you don’t want to work at.

  4. My ‘financial freedom’ will come when my trading cash flow exceeds either my job earnings or the amount it costs to live in the region I choose to live. That will be the day that I no longer need to turn to someone else to provide for my means and thus will be ‘free’

  5. flipspiceland says:

    This reads like something George Soros would write AFTER he banks his first billion.

  6. @DL: Thanks for the comment: “…there is value in having enough money in the bank so that you don’t have to work at a job that you don’t want to work at.” I couldn’t agree more! My personal belief, however, is that there is meaning to be found in doing something one enjoys. I just don’t believe that people have no choice but to work in a job they hate for most of their life so they can have enough money to stop working there. This is not unlike a person willing to be a slave for two-thirds of their life in exchange for being “free” for the other third (assuming they live long enough to get there). Thanks again…

    @ Common Man: The fact that you have defined freedom for yourself is the enabling factor. Striving for a reasonable degree of self-reliance is achievable and quite similar to my own definition of freedom. A few years ago, I defined retirement as “doing what I want, when I want, within reason.” I started my own business and became “retired” by my definition. I still need money but I see myself as “free.”

    @flipspiceland: I’ve not read George Soros but I know his primary studies, prior to his investment work, were in philosophy. I manage investments but I am certainly no billionaire (and not even close to a millionaire in net worth either). Mr. Soros might attest to the fact that large sums of money do not necessarily make one “free” or “happy,” yet there are many who have little money or material worth but are quite content. I’m receiving your comment as a compliment so thanks!!

  7. call me ahab says:

    Kent-

    good stuff! Have you ever read “Your Money or Your Life” by Joe Dominguez?

    pretty much along the same line of what you are saying-

    that by always trying to secure our future we don’t enjoy our present- can’t be said enough

  8. @ call me ahab: I’ve not read “Your Money or Your Life” but I’ve heard about it. I prefer to read older books by philosophers who essentially said the same things hundreds or even thousands of years ago.

    The greatest thoughts are timeless. Thanks for the comment…

    “All truly wise thoughts have been thought already thousands of times; but to make them truly ours, we must think them over again honestly, till they take root in our personal experience.”~ Johann Wolfgang von Goethe

  9. tradeking13 says:

    “what led most of these people to place their life savings in the stock market to begin with?”

    …and why are most pundits on bubblevision confounded with people now sinking their money into bond funds?

  10. @tradeking13: Good point. Are pundits not always “confounded?”

  11. fusionbaby says:

    I’ve never gone for a big mansion, luxury cars, exotic vacations, etc. I wouldn’t derive much pleasure from such materialism. The only thing that I take pleasure in owning and growing is a well constructed portfolio that gives me good passive income (cash flow). My wife and I live in a rental up in the beautiful mountains and drive a Toyota pickup that we own free and clear. We have no debt. The passive income from our portfolio, mostly income properties, pays for our rent, food, utilities and all other basic personal needs. Taxes are minimal since the income is passive and real estate offers many tax advantages. Everytime we add another cash-flowing asset to our portfolio we improve our standard of living. We consider that we already have financial freedom or independence: every day when we wake up we know that we can do anything that we choose with this new day (we never have to commute or work at a job or answer to anyone). We have escaped the basic slavery that 95% of the US population is bound by. We reached this state by careful planning, a frugal lifestyle and postponing gratification to some degree. It has paid off.

    Currently, we are creating 2 businesses that will soon launch (product development/PR & Marketing and a licensing agency).

    We will soon have ENOUGH for the rest of our lives and don’t need to build a personal empire. Retirement, fun, pleasure chasing, etc. are all very over-rated. We believe it is most optimal to continue to produce and create businesses that offer value to the society at large and to make lots of money. The more you earn, the more you can give. We’ll have ENOUGH shortly, and then all of our excess revenue can be used to help others and to contribute to social reform and social betterment… which, in our estimate, is why we are here in the first place.

    Having enough and being able to contribute is our definition of financial freedom. And it can be done.

  12. [...] The Greatest Deception in the History of Finance – An excellent post on why financial freedom is an illusion, which lead me to an interesting blog where I found… [...]

  13. The Curmudgeon says:

    The means to freedom is to seek those things that can be owned without the fear of losing them. Forsake the temporal and focus on the eternal. Paradoxically, the best way to do so is to focus on the virtue of the moment.

  14. call me ahab says:

    “seek those things that can be owned without the fear of losing them”

    “focus on the virtue of the moment.”

    exactly TC

  15. DiggidyDan says:

    I don’t know exactly what your background is, Kent, but i would say it hasn’t been besmirched by disadvantage, bad luck, or generational slavery. Kinda reminiscent of the Phil Gramm quote. Fact of the matter is, everything ain’t roses and you can’t just choose to “do something you enjoy” and afford to have a life these days, procuring the basic needs of food, shelter, clothing, etc. It boils down to supply and demand in the labor force, really, and if what you enjoy is not in a great enough demand to pay for the basics, you’re SOL and forced to the slavery of the crappy job you go to every day and sacrifice your personal dreams and ideals. Sometimes the real world doesn’t fit into your fantasyland picture of every person getting compensated enough to live doing what they enjoy. The term “starving artist” comes to mind. Because your experiences happened to afford you the opportunity to do what you like, while still making enough to cover your basic needs, you are biased into thinking that applies to everyone else. If you are lucky enough to develop skills that are in demand and that you enjoy doing, that’s fantastic. Otherwise, you have to balance the sacrifice of needs with the enjoyment of dreams.

  16. constantnormal says:

    @DiggidyDan 7:25 pm

    Careful there, you’re pissin’ on the rainbow …

  17. DiggidyDan says:

    hahaha. That would explain the “Pot of Gold” I found at the bottom.

  18. call me ahab says:

    diggidydan-

    i think the point is- that “just” striving for your future w/o enjoying the present- so that years from now when your older you can feel secure- is wasting the “now” of your life-

    you know- wanting what you have- not- having what you want-

    undoubtedly people need to put food on the table and put a roof over their heads- however by living simply- a person does not have to stress over “wants”

  19. van schaik says:

    “Freedom’s just another word for nothing left to lose… ”
    http://jpetervanschaik.googlepages.com

  20. DiggidyDan says:

    Yes, I understand this concept. What I am countering is that it based upon pedantic idealism and not reality. You can espouse Carpe Diem all you want and quote famous philosophers, but in the real world today, seizing the moment and enjoying the present might be a little hard. Say if you are perhaps unemployed and cannot afford to feed your kids and are going to lose your house. Or if you just graduated college with a degree in a field that you have a passion and love for, yet cannot utilize it to trade for enough to afford food, shelter, and clothing for yourself.

    I agree that pursuing wealth at all costs is a fool’s game. What I am arguing is that in this corporate oligarchy in which we now live, this fool’s game played by the supposed “winners” of capitalism in fact oppresses a great deal of people into not being able to pursue their own dreams due to circumstances of the system. Their greed in trying to fill that hole in their soul causes humanity in general to suffer.

    To appease those enamored with Philosophy and Quotes:

    No man is an island entire of itself; every man
    is a piece of the continent, a part of the main;
    if a clod be washed away by the sea, Europe
    is the less, as well as if a promontory were, as
    well as any manner of thy friends or of thine
    own were; any man’s death diminishes me,
    because I am involved in mankind.
    And therefore never send to know for whom
    the bell tolls; it tolls for thee.

  21. call me ahab says:

    “I agree that pursuing wealth at all costs is a fool’s game. ”

    true- but even for any cost

    “winners” of capitalism in fact oppresses a great deal of people into not being able to pursue their own dreams due to circumstances of the system.”

    elaborate- suppression of wages, offshoring, outsourcing?

    also- John Donne- a great poet- i posted that exact poem at Andy’s Commentary several weeks ago

  22. TakBak04 says:

    @Kent Thune

    LOVED THIS POST! Nice to see the philosophical quotes with your commentary. Not the usual thing we see, here, and so it was very interesting read.

    And this quote:

    “At a party given by a billionaire on Shelter Island, the late Kurt
    Vonnegut informs his pal, the author Joseph Heller, that their host, a
    hedge fund manager, had made more money in a single day than Heller had
    earned from his wildly popular novel, Catch-22, over its whole history. Heller responds, ‘Yes, but I have something he will never have: Enough.’ “

    When is “ENOUGH”….really “ENOUGH.” Maybe when things get so out of balance with GREED tipping the SCALES…we need to ask and answer this.

    Again…thanks!

  23. @ DiggyDan: I will say that there were several overlapping themes within this post. Primarily I attempted to shine a light on the “pursuit” of “financial freedom” as an illusion, especially without having defined what it is for oneself. You are right, idealism does not put food on the table.

    Also, your assumption about my background is only partially true. It’s never been “besmirched by generational slavery” but I’ve certainly seen my share of “bad luck” and “disadvantage.” Just for one short example, I started my own investment advisory business (based upon the “idealism” you speak of) in September of 2006 with a small loan, $18,000 worth of fee-based revenue to start, a mortgage, a stay-at-home wife and two young children. Oh yes, and the worst stock market and economic recession in a generation was just around the corner! I’m not struggling financially now but I’m certainly not anywhere near “rich” in financial terms. My financial net worth is just a fraction of what it was three years ago but I’m the happiest I’ve ever been in my life. Also, if it weren’t for my philosophical perspective, I would have given up my business aspiration (or perhaps never even tried). I simply want to help others help themselves (and not just in a financial regard) For more, you can go to my blog’s “About” page…

    @ fusionbaby: Congrats on nearly having “enough!”

    To everyone else who commented (or for those who just like to read the comments), thanks for visiting.

    I’ve already thanked Barry but thanks to you, Barry, once again!

    Cheers to all and good night…

    Kent

  24. DiggidyDan says:

    elaborate- suppression of wages, offshoring, outsourcing?

    Exactly, the universal pursuit of profit at all costs, disregarding the welfare of the proletariat and the nation as a whole, combined with the greed and corruption displayed in all aspects of political and business interaction. It is quite clear that the positive feedback loops of money and power combined with the myopia and greed of those at the top will eventually result in an unsustainable systematic disequilibrium. When in fact, the money and the power gets transferred into few enough hands, and the suppression of the majority manifests itself to the tipping point, there will be a “rebalancing” of the equation.

    Capitalism is a delicate balance on the brink of anarchy. The lessons of one of the men who knew this balance best, Mr. Henry Ford, should be studied and replicated.

    “A business that makes nothing but money is a poor business.”

    “There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.”

    “I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be low in price that no man making a good salary will be unable to own one — and enjoy with his family the blessing of hours of pleasure in God’s great open spaces. ”

    –Henry Ford

    What Henry Ford understood is that in the long run, screwing everybody but the elite for the sake of outrageous profits will lead to the undoing of the capitalistic system. That is usury and oppression, not business.

    Instead, what we have now is a cutthroat version of capitalism with a myopic perspective, a selfish attitude, and a complete disregard for the consequences inherent in taking such a course. There are many other analogous situations in life. I liken it to the aristocrats on the titanic or the asymbiotic relationship of parasites that eventually kill the host and have no means for the continuance of their own well being. The systemic balance they effected due to greed and lack of foresight and empathy will lead to the catastrophic event. Then only the strong and skilled survive.

  25. DiggidyDan says:

    Kent, no disrespect of assuming you haven’t seen your share of problems in life, for that is life. I just know that there are many out there who cannot strive to the ideals of following one’s heart and living without the spectre of broken dreams in the pursuit of happiness bearing down upon them. In fact, I would say we agree on most points, philisophically, it’s merely in the judgement that all among us have an equal chance to realize a struggle free existence in which we disagree. The cards aren’t always dealt equally.

  26. call me ahab says:

    “A business that makes nothing but money is a poor business.”

    undoubtedly- unfortunately- those are the same businesses being supported by our own government today

  27. rod_kane@hotmail.com says:

    My grandmother said in her last year after being bedridden commented that people spend so much time going to and fro, and she also said the we are here to help one another.

    In the last year before my mother succumbed to a stroke said that it’s more important to do things you want than to have things. Living in and enjoying the moment is more important than having. She did not have great financial wealth, quite the contrary, but she did have small pensions that provided more than enough to do the things she wanted, tending to her garden, making her living space nice, painting and drawing and enjoying visits with her granddaughter. Dependable cash flows are more important than big paper gains which can evaporate quickly.

    Lately I’ve been thinking a lot about what my mother and her mother had said, and as simple as it is, it’s making more and more sense to me everyday. The time for living a good quality of life is a lot briefer than we realize, it’s over before we know it, like stock market investors we are very easily seduced into thinking the short term will extrapolate into the future. As the Buddhists say nothing is permanent and nothing exists in isolation – read that for years and with the passing of my mother the deeper meaning has sunk in.

    Life is difficult as Scott Peck said in the Road Less Travelled, and once you realize that life becomes easier. So enjoy what you have today, if we have to cross over terrain that’s difficult or not to get from point A to point B then we may as well make the best out of it regarless of what material wealth we have. Material wealth beyond a certain point is perhaps the lowest grade of wealth there is.

    Thank you for writing this and many thanks to Barry for posting it.

  28. jaysan says:

    Tiger Woods has financial freedom, but is he free in other important respects?

    I am very surprised to find a discussion like this on a financial site. I am a highly educated person who has read the philosophers you quote and engaged in many philosophical discussions with philosophical friends. I have also explored Buddhism, mentioned in the first comment – I meditate regularly.

    It hasn’t done me much good so far as letting go of my addiction to trading the stock market and to reading internet news and blogs.

    Thanks for the provocation.

  29. bergsten says:

    A carefully considered, articulate, compelling, and useful response to this article would probably take a year or two of thought and preparation, and once that was completed, it would be apparent that many of the underlying issues are presently unsolvable.

    So, I’ll restrict myself to this:

    @Kent — in addition to writing a well thought out, interesting, and important article, it’s really good and unique of you to participate in a dialog with your commenters — this is how Blogs ought to work. Barry, to his credit, does this from time to time too. Such conversations make a Blog worth participating in (as opposed to those where everything is “one way” rants).

    Thank you for that, and for this reason I’ll add your Blog to my “list” (whether this is a good thing for you remains to be seen!).

  30. TerryC says:

    The greatest deception in the history of finance is that money has any value. Civilized people gather in a room and decide that the toilet paper in your wallet that you have worked all your life to accumulate is actually worth goods and services. Ask Zimbabweans, Mexicans, Germans in the 1920′s, or Americans today how much confidence they have in those “Federal Reserve Notes”. With our debt soaring, and our country going the way of the British, French, Russian, Roman, Byzantine, and Ottoman Empires, it’s no wonder people want gold, a house mortgage-free, cars, and other tangible assets. When the feces hits the fan, the richest people in America will have food, guns, and lots of ammunition. (Sounds like a redneck Mormon-might not be so bad after all).

  31. fusionbaby says:

    DiggidyDan:
    Whatever you decide is reality, basically becomes your reality. This is a very difficult concept to grasp. Most never do. Those that are successful do not accept “appearances” or “reality”. They have their own inner reality and they focus very positively on that and work at making it manifest in the outer world. That trait is probably the common denominator of all success. Most of us go deeply into agreement with the outer reality. Those that consider their imagination to be senior to the appearances of the outer reality, and stay very focused, eventually tranform the outer reality into their inner reality. The physical universe hypnotizes you and lulls you into going into agreement with it. Makes you the effect point instead of the cause point. John Kehoe’s book “Mind Power” covers this subject very thoroughly. I’ve read it and am applying the data… life is getting easier since I’ve reduced my negative thoughts, validated my mind power, focused correctly on my goals, begun to disagree with appearances, put more emphasis on my imagination and creative powers, etc.

  32. fusionbaby says:

    Addendum:
    DiggidyDan:
    There are people out there who are successful: doing what they love to do, generating good income, managing their obligations and responsibilities. In my mind they are the elite. When you run into someone like this, take advantage of it… they think and operate differently than the majority… study them: discover what their belief system is, what their philosophy is, how they think, what their attitudes are about different aspects of life, etc. This would be one of the most constructive things you could do to change your condtion.

  33. DiggidyDan says:

    In an alternate philosophy:

    Tao Te Ching 22:
    “Surrender brings perfection;
    the crooked become straigh; the empty become full;
    the worn becom new;

  34. DiggidyDan says:

    In an alternate philosophy:

    Tao Te Ching 22:
    “Surrender brings perfection;
    the crooked become straigh; the empty become full;
    the worn becom new;

  35. DiggidyDan says:

    have litttle and gain much;
    have much and be confused;
    so the Sage embraces tho Way
    and becomes a model for the world
    Without showing himself, he shines forth;
    Withouth promiting himself, he is distingueshed
    Without claiming reward, he gains endless merit;
    Without seeking glory, his glory endures”

    Voltaire, as Micromegas on observing the plight of humanity:
    “Only foolhardiness leads to and will lead to persecutions. I find it very bad that your marriages, the status of your children, and your rights of inheritance should suffer the slightest interference. It is unjust to bleed and purge you because your fathers were fools. but what do you expect? This world is a great Bedlam where lunatics put other lunatics in chains.”

  36. DiggidyDan says:

    wow, i can’t type very well when reading books in the dark

  37. mknowles says:

    “True freedom begins by learning contentment — by the realization that you already have “enough” — where the search for pleasure can be replaced by the search for meaning.”
    ~~~~~~~~~~~~~~~~~~~~~~~~
    Agreed. But you have to kill your TV to accomplish it.

  38. @ TakBak04: Thanks for the generous compliment! Certainly knowing what is “enough” is key.

    @ rod_kane@hotmail.com: I’m sorry for the loss of your mother but her parting wisdom, “it’s more important to do things you want than to have things,” is priceless. Your comment is a blog post in itself.

    @ jaysan: Your self-described “addiction to trading the stock market and to reading internet news and blogs” may not be quite the problem you imply because you are aware of it. Also, your study of Buddhism and meditation likely balances everything! You seem to have, what I would call, a good balance of brain and mind.

    @ bergsten: I appreciate your kind words and for adding my blog to your “list.” Barry has kindly left a door open for me to write here at TBP so you’ll also see me here a few times per month. I look forward to hearing from you at The Financial Philosopher. Cheers…

    @ TerryC: Certainly, civilization has a price. Everything has an ideal balance. Personally, I think a little less “civilization” than we have in Western societies might be closer to this balance. There is no escaping paper money but there is opportunity to escape much its conventional use.

    @ DiggidyDan: Yes, we are more alike philosophically than not. The time you took to make comments “in the dark” is a compliment in itself! I also like Taoism, especially the principles of humility and passivity. I look forward to future “conversations” with you. In the mean time, here are a few of my favorites from Tao Te Ching (Lau Tzu):

    “There is no calamity greater than lavish desires. There is no greater guilt than discontent. And there is no greater disaster than greed.”

    “Health is the greatest possession. Contentment is the greatest treasure. Confidence is the greatest friend. Non-being is the greatest joy.”

    @mknowles: I haven’t killed my TV but I don’t have cable and I don’t subscribe to any periodicals! Thanks for the comment…

  39. Jib says:

    Thanks for the post, Kent. Awareness of the corrosive effects of materialism and the elusiveness of a satisfied life in pursuit of abstract wealth is an important lesson. However, few people I know actually pursue wealth for wealth’s sake; they are more concerned with being able to get by and create a safety net for the people they care about.

    As Kanye West said, “Money isn’t everything, not having it is.”

    “Financial freedom” to me would be having enough money to provide for food and safe shelter, a solid education for my children, and sufficient cash to cover myself and my family members in cases of severe medical problems. Judging by the costs of cancer treatments, surgeries, houses in safe neighborhoods, and college expenses nowadays that amount sadly goes well into the millions of dollars. Granted people can and do get by without these assurances, but the uncertainty of not knowing how one is going to provide for one’s family and protect against these hardships is unpleasant. Surely the satisfaction of knowing these needs are met raises the happiness in one’s life.

  40. [...] Kent Thune, “To conclude, there is no such thing as financial freedom, at least not in the conventional sense of the term, which is the great deception.”  (Big Picture) [...]

  41. Sunny129 says:

    There is definitely ENOUGH between NEEDS and WANTS! Each of us have to find our own ‘Enough’ to lead a content and happy existence.

  42. [...] The Greatest Deception in the History of Finance Ken Thune (hat tip reader Doug) [...]

  43. Uncle Billy Cunctator says:

    Bergsten? This Bergsten?

    http://en.wikipedia.org/wiki/C._Fred_Bergsten

  44. Forever_Young_ says:

    Thanks for a lovely article supplemented by all those who commented – all with much of value to add to a complicated subject – especially those of DiggidyDan who puts a lot more perspective on the difficulties of having ‘enough’.
    Most of us are born and indoctrinated onto the treadmill – ‘born in chains’ – so to gain financial freedom means to be first and foremost one of those rare birds – a philosopher – a questioner of the status quo. And then to question the system we have been indoctrinated into means in essence that we have for whatever reason become disillusioned with it – a Richard Branson or a Tiger Woods for example would in all likelihood never have the need or even desire to debate the issue of ‘financial freedom’. And then we need to have the time to question and the means to do something about it – as Marx said – ‘it is our material circumstances that dictate our consciousness’ – also – ‘from each according to his ability, to each according to his needs’.
    And, importantly, lets not forget the equation – Money = Power which is probably the single most powerful drive of all (Nietzsche) possibly even above that of sex (Freud). Our drive for power is determined during our infancy so those to whom power is an issue will find it extremely difficult if not impossible to overcome.
    So we have to take into account the fact that while some have ‘enough’ the vast majority don’t and those who do might stick out and dare to be ‘different’ which in days gone by was a curse that could mean isolation from the community and thus even death. To put it bluntly – those who have ‘enough’ swim against the tide and to do so by choice requires a very strong constitution.
    I’m reminded of a joke about an entrepreneur who visited an African village that was surrounded by fertile land which lay fallow even as the village men slept under a tree in the shade. So he approached them and asked them why they lay under the tree when they could be working the land and the men said ‘what for – we have sufficient food from the wild that we can eat’. ‘Ah’ said the entrepreneur ‘you are missing the point – if you farmed the land you could grow a surplus which you could sell for a profit’. ‘And what would we do with the profit?’ asked the men and the entrepreneur explained to them how they could build up a big agribusiness company exporting food all over the world in order to accumulate a huge fortune’. ‘And what we would we do when we had all this money’ asked the men to which the entrepreneur replied – ‘then you could lie in the shade all day’.

  45. Evelyn_S says:

    As long as I can remember, I’ve been aware of the compromises between time “well spent” and the need for money to survive. My mother struggled to support her family, complained bitterly about the boring computer work she did, and went in to debt so we cold have necessities. She looked forward to retirement so she could finally do the creative things she wanted to.

    In my late teens, I very consciously decided to trade in my own sexuality rather than endure the much lower-paying indignities of serving food to people.

    My fears of becoming a street person or “bag lady” never really went away. I wanted to be an artist or a musician but —

    I became an entrepreneur, and worked hard in small businesses most of my life. They allowed me to build up some equity and avoid debt, which I abhor. I own my house debt-free.

    However, “made in USA” became obsolescent: my 20-year-old business failed and I lost my source of income.

    I patented an idea and had my invention made in China. The years it took to make this dream come true put my product’s debut in the teeth of the 2008 recession, and my business our of all reach of consideration for venture capital. It creates work but no revenue.

    I saved enough money to live on for a while, but that’s finite. I don’t have any health insurance. I don’t go to doctors or get dental checkups, as I’m trying to live on $20,000 a year until I’m old enough to get a reverse mortgage.

    This arrangement is very fragile. (Take a look at that Elizabeth Warren article about the vanishing US middle class!) My little dog just needed over $3,000 worth of medical care. I’m in shock, but I paid. I cry a lot because it has dawned on me that my ability to support companion animals is now limited such that I’m inhibited from adopting animals as I never used to be before.

    My life has gone through an arc from poor to wealthy and successful to falling back down the other side of the curve.

    Philosophy? “Call no man successful until he is dead” because while you’re still alive you can be blindsided by life’s nasty little surprises and find yourself among the humble.

    Big swindle? The massive dilution of “worked for it” (value-related) money with “gambling debt derivatives bubble” valueless money.

  46. [...] The Greatest Deception in the History of Finance from The Big Picture This post takes what everybody is in search of and asks if it’s just a marketing scheme.  Okay I simplified it a bit.  I guess you’ll have to read to make up your own mind. [...]