Understand Your Baseline

We are all trapped by our baseline thinking. Think about this idea.  $1 billion is a lot of money.

How much is a billion?

It takes 32 years of continuous counting at one number per second to get to a billion. Just 12 days to get to a million. A billion is a big number. But is it always big?

It seems not.

Everything is context and a hard baseline will cause you conflict.

In the United States the federal budget in 2017 is $3.65 trillion. That would be 3,650 billion. That means they spend $10 billion per day.  Every day. $416 million per hour. $7 million per minute. A billion is spent before 2:10 AM every day.  Not so significant to them as it is to you and I.

If you had a billion what would you do with it?

Most of us don’t know and almost can’t know.  A billion in bonds earning 5% is an income of $50 million a year. Nearly a million a week. Even that would be hard to spend for most of us.

Giving away a million is not too hard.  There are many worthy projects. Assessing projects and giving away $1 million per week would be hard work. What fun would that be?

Maybe buy some art.

A Jean-Michel Basquiat piece sold for $110 million last week at Sotheby’s. It was part of a $319 million dollar day for the auctioneer. The entire sale amounted to $1.3 billion.

The Basquait piece is quite remarkable, but then so is $110 million. You would need a special place to hang it.

While the most pricey Basquait, $110 million is a fraction of the $303 million David Geffen’ foundation received for de Kooning’s “Interchange”

Money is sterile. It is nothing until you use it.

Some people enjoy art. Others fine wine. Perhaps a house in Aspen or Miami or the south of France. Maybe security against adversity or to help one’s child. Perhaps help another human somewhere on the globe.

People seem to seek money as a goal of its own. They sometimes fail. People who own great wealth have usually created great value and the money builds faster than they can use it. Eventually that changes and they work at using it. The Gates, Ford, Rockefeller, McArthur, and dozens of other foundations. Warren Buffet’s billion dollar a year charitable giving. 

Yusaku Maezawa’s Basquiat.

People who have trouble making and keeping money often have no clear vision for its purpose. Motivation flows from purpose.

Find your particular meaning for money

Making money is satisfying. Using money is satisfying. Owning money for no purpose often does not work. Clarify purpose. Use a baseline that is meaningful for you. A billion dollars probably doesn’t matter.

There is small advantage to being the richest person in the cemetery.

Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario.  In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you.  don@moneyfyi.com  866-285-7772

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