UPDATE: Here’s a great essay that was written 13 years ago on the same subject, incorporating a terrific analogy. Don’t miss it.
Yesterday, I read a spot-on article by Dave Ramsey, a best-selling writer, financial expert, radio personality, and author of the weekly column, “Dave Says“. The article so struck me that I requested (and received) permission to reprint it in full here on Grand Rants. It’s really a micro view of what’s happening all over our country today, and in its larger incarnation, it’s a huge reason Tea Party people are mad upset angry active.
Responsibility leads to wealth
Why is it that some people have enough money for pizza, lottery tickets, cable television and cigarettes, but they don’t buy something as inexpensive as renter’s insurance, and then they expect someone else to bail them out when a fire destroys their home?
This kind of behavior falls into the Stupid Tax category. It’s an aggravating thing, but at the same time there’s something about fire that elicits sympathy from me. Even if there’s stupidity involved in what happened, it’s such an emotionally devastating event. But I think it’s important to talk about what you’ve brought up.
Let’s put it another way. Why are there people who get mad at others for building wealth, or expect other people to bail them out after they’ve behaved irresponsibly? Ninety percent of America’s millionaires are first-generation rich. They started with nothing, and instead of buying lottery tickets and smokes, they saved money and bought things like renter’s insurance. They kept things like car insurance and health insurance in place, so that if they totaled their car or had to have an operation, they could pay for it instead of filing bankruptcy!
In other words, they were responsible. They stayed out of debt because they were mature enough and responsible enough to delay pleasure, and then after years of living this way, they looked up and discovered they were millionaires. That’s how it happens. You delay bits and pieces of fleeting pleasure for a quality life in the future. Now, you don’t trade away all momentary pleasures. You don’t have to completely give up fun to win with money, but you trade impulsive, immature decisions and purchases for the reward of a better life later.
Most poor people delay none of the pleasures. They live only in the moment, and that’s why they stay poor. If they want a better washer and dryer, they’ll rent-to-own instead of saving up for a little while and buying a decent, used combo in the classifieds. I understand that bad things sometimes happen to good people, and you can end up broke that way, too. But I firmly believe that in most cases, it’s not that they don’t have the money, it’s more a case of they don’t have a vision for the future. They surrender a great life down the road for “Thank God it’s Friday. Oh God, it’s Monday!”
I love Dave’s concept of the “Stupid” tax. And of course it applies to far more than the example cited above. Renter’s insurance, health insurance, getting an education, not having babies at 16 years old, every sensible person can recite the litany of self-indulgent, self-centered, and, frankly, stupid behavior that we all end up paying for.
And so often this behavior is assisted by vast and expensive government programs which while nominally providing a “safety net” for society, actually end up rewarding the bad behavior and encouraging more of the same. And who pays for all those government programs? Why we do, of course.
We all pay a “Stupid” tax by subsidizing bad behavior and poor personal choices. And we’ll continue to do so until we as a society require a higher level of personal responsibility of ourselves and each other. And until we elect leaders who do the same. This is part of what the Tea Parties are about, and it’s why Tea Partiers work so hard for Congressional candidates who understand and support this concept of personal responsibility.
Until that happens though, “Stupid” will drain our monetary resources, as well as sap the lives of those who are dumb enough to rely on social programs for their well being instead of doing for themselves.
But for now, “Stupid” pays.