At the museum, I am standing with my spouse in front of a Flemish vanitas scene. There is an old man hunched over his accounting books, surrounded by gold coins and jewels; a skull sits on his desk, and Death himself perches undetected above his shoulder. What, I ask her, is the “takeaway” of such scenes supposed to be? That one would do well to start thinking of one’s soul, she says. And I think, but do not say: I thought of nothing but my soul for forty years, never learned the first thing about how money works, and now time is much shorter than in our youth, and I’ve managed to save so little money, and I am worried about leaving you alone in this world without me, with only the small amounts we’ve been able to put away for us, for you, as we move about from country to country, renting one modest apartment after another, like dry old students. O my love, I hate to envision you alone and frightened. Is it wrong for me now to count our coins and to keep our accounting books? Am I compromising the fate of my soul? Is this vanity?
In November of last year, I opened a brokerage account. I had been reading simple, bullet-pointed introductions to financial literacy for a few months before that, manuals “for dummies” of the sort that I am conditioned to hold in contempt when their subject is, say, Latin, or the Protestant Reformation. After this period of study, I determined I was ready to invest the bulk of the money I had to my name, around $150,000, in the stock market (an amount large enough to make me already worthy of the guillotine, for some who have nothing, and small enough to burn or to lose with no consequences, for some who have much more). The fact that I had that amount of money in the first place was largely a bureaucratic mistake. When I quit my job at a university in Canada after nine years of working there, the human-resources people closed my retirement account and sent me the full amount in a single check. That check—the “retirement” I unwittingly took with severe early-withdrawal penalties at the age of forty-one when in fact I was only moving to a job in another country—plus some of the money I had saved over just the past few years from book-contract advances, was to be the seed funding for what I hoped, and still hope, might grow into something much larger through the alchemy of capital gains.
It was driven home to me repeatedly in my early efforts to build an investment strategy that, quite apart from the question of whether the quest for wealth is sinful in the sense understood by the painters of vanitas scenes, it is most certainly and irredeemably unethical. All of the relatively low-risk index funds that are the bedrock of a sound investment portfolio are spread across so many different kinds of companies that one could not possibly keep track of all the ways each of them violates the rights and sanctity of its employees, of its customers, of the environment. And even if you are investing in individual companies (while maintaining healthy risk-buffering diversification, etc.), you must accept that the only way for you as a shareholder to get ahead is for those companies to continue to grow, even when the limits of whatever good they might do for the world, assuming they were doing good for the world to begin with, have been surpassed. That is just how capitalism works: an unceasing imperative for growth beyond any natural necessity, leading to the desolation of the earth and the exhaustion of its resources. I am a part of that now, too. I always was, to some extent, with every purchase I made, every light switch I flipped. But to become an active investor is to make it official, to solemnify the contract, as if in blood.
When I was eleven, I learned that a check is the form of currency you use when you do not have any other. My mother, recently divorced and under severe financial strain trying to get her family-law practice off the ground, used to take us to Kentucky Fried Chicken when cash reserves were depleted, since that was the only fast-food restaurant in town that accepted these strange promissory notes as a form of payment (and in those days there was no possibility of immediate verification of the availability of funds). We kept careful track of which KFC locations in town might have got a bounced check from us, and avoided them by moving out to ever more peripheral neighborhoods in search of dinner. This was among my earliest and most vivid lessons in what I now think of as my first financial education. When I turned eighteen, with no understanding at all of how interest works, I got my first credit card; when I ran it up to its limit, I got my second credit card; then I got a third. When I finished my undergraduate studies, and was admitted to several graduate programs, I decided I simply had to go to the only one of them that did not offer me a financial package, including tuition remission. So instead, I took student loans. I spent my twenties and thirties under constant pressure from collection agencies. Routine robocalls terrified me, calls from live agents often induced me to either break down in tears or fight back with ridiculous counterthreats, or some combination of the two. This condition, too, I can attest, is something like sin, and something like disease. I carry it with me still, in my body, as if as a child I had suffered from polio, and now must go through the world with a slight recurvatum in my gait, always announcing that because my freedom was delayed, I will never fully be free.
In November of last year, I opened a brokerage account. I had been reading simple, bullet-pointed introductions to financial literacy for a few months before that, manuals “for dummies” of the sort that I am conditioned to hold in contempt when their subject is, say, Latin, or the Protestant Reformation. After this period of study, I determined I was ready to invest the bulk of the money I had to my name, around $150,000, in the stock market (an amount large enough to make me already worthy of the guillotine, for some who have nothing, and small enough to burn or to lose with no consequences, for some who have much more). The fact that I had that amount of money in the first place was largely a bureaucratic mistake. When I quit my job at a university in Canada after nine years of working there, the human-resources people closed my retirement account and sent me the full amount in a single check. That check—the “retirement” I unwittingly took with severe early-withdrawal penalties at the age of forty-one when in fact I was only moving to a job in another country—plus some of the money I had saved over just the past few years from book-contract advances, was to be the seed funding for what I hoped, and still hope, might grow into something much larger through the alchemy of capital gains.It was driven home to me repeatedly in my early efforts to build an investment strategy that, quite apart from the question of whether the quest for wealth is sinful in the sense understood by the painters of vanitas scenes, it is most certainly and irredeemably unethical. All of the relatively low-risk index funds that are the bedrock of a sound investment portfolio are spread across so many different kinds of companies that one could not possibly keep track of all the ways each of them violates the rights and sanctity of its employees, of its customers, of the environment. And even if you are investing in individual companies (while maintaining healthy risk-buffering diversification, etc.), you must accept that the only way for you as a shareholder to get ahead is for those companies to continue to grow, even when the limits of whatever good they might do for the world, assuming they were doing good for the world to begin with, have been surpassed. That is just how capitalism works: an unceasing imperative for growth beyond any natural necessity, leading to the desolation of the earth and the exhaustion of its resources. I am a part of that now, too. I always was, to some extent, with every purchase I made, every light switch I flipped. But to become an active investor is to make it official, to solemnify the contract, as if in blood.
When I was eleven, I learned that a check is the form of currency you use when you do not have any other. My mother, recently divorced and under severe financial strain trying to get her family-law practice off the ground, used to take us to Kentucky Fried Chicken when cash reserves were depleted, since that was the only fast-food restaurant in town that accepted these strange promissory notes as a form of payment (and in those days there was no possibility of immediate verification of the availability of funds). We kept careful track of which KFC locations in town might have got a bounced check from us, and avoided them by moving out to ever more peripheral neighborhoods in search of dinner. This was among my earliest and most vivid lessons in what I now think of as my first financial education. When I turned eighteen, with no understanding at all of how interest works, I got my first credit card; when I ran it up to its limit, I got my second credit card; then I got a third. When I finished my undergraduate studies, and was admitted to several graduate programs, I decided I simply had to go to the only one of them that did not offer me a financial package, including tuition remission. So instead, I took student loans. I spent my twenties and thirties under constant pressure from collection agencies. Routine robocalls terrified me, calls from live agents often induced me to either break down in tears or fight back with ridiculous counterthreats, or some combination of the two. This condition, too, I can attest, is something like sin, and something like disease. I carry it with me still, in my body, as if as a child I had suffered from polio, and now must go through the world with a slight recurvatum in my gait, always announcing that because my freedom was delayed, I will never fully be free.
by Justin E.H. Smith, Cabinet | Read more:
Image: uncredited
