Questions and Answers: I Answer Subscribers Most Pressing Questions!


I’m back with another round of subscriber questions and my answers, and I have to say the questions are getting tougher! Some of you had some real thought-provoking questions and it’s great to see what’s on your mind. I’ve done a couple rounds of Q&A in the past and the old mailbag has been filling-up. So without further delay, here are the latest questions from subscribers and my answers:

Question: What’s wrong with our system in that a football player or a pop singer earns way more than a scientist who’s working on a cure for a deadly disease?

Answer: There’s nothing wrong with our system. In a capitalistic economy, a person’s salary is not related to the moral value of one’s work. Your income depends on the money value of your work compared with what some other person is willing to pay for it. While “do what you love” is not bad advice, I think better advice is to “find a way to make money doing what you love”. You’re going to spend the same amount of time doing it, so you might as well get paid! Also, you can take the money you earn and further your cause. If money is not important to you, then just do what you love – but don’t ride the fence.

Question: Why are wealthy people somewhat shallow about who they associate with?

Answer: I wouldn’t call it shallow. I would call it what it is: selective. On the road to wealth, a person builds the good habits of discipline and discernment. They also become more conscious of how they spend their time and who they spend it with. Just as there are people who have committed themselves to self-improvement and a better life, there are those that have committed themselves to a life of mediocrity, bad habits and drudgery. As I’ve written about before bad habits are contagious, so it’s wise to protect your thoughts by not associating with toxic people. Remember, money is not an indicator of a person’s self-worth. It doesn’t make you superior simply because you have more money. However, there’s no redeeming value in associating with people that don’t have the same good principles as you. If you lie down with the dogs, you will get fleas.

Question: I have over a half of a million dollars saved up. Why does it bother me so much when I lose $40 to an unfair bank charge that they refuse to reimburse me?

Answer: There are two reasons for your frustration. Your financial wealth has no correlation whatsoever to your sense of justice. Good money management is good money management. Warren Buffett applies the same prudence to a single dollar that he does to a billion dollars and he wouldn’t tolerate waste or mis-management in either denomination. And neither should you. The second reason is that studies show that we feel the pain of losing money much more deeper and acute than the joy of gaining money. This is why it’s all too important that the number one rule in investing is to never lose money. You’re being a good advocate for your money. If you are there for your money, it will be there for you.

Question: Is it easier to turn $1,000 into $10,000 or to turn $1,000,000 into $10,000,000?

Answer: They both represent a ten-fold increase and require the same amount of discipline, knowledge and patience to make that increase happen. Having a $1,000,000 to invest doesn’t get someone off the hook from having to use sound money principles. In fact, a person who thinks they can simply abandon the core principles of money management just because they now have a $1,000,000 investment account, will most likely be transferring that $1,000,000 to someone else who hasn’t abandoned those principles.  There’s a common myth that it takes money to make money. That’s simply not true. There are countless stories of people taking very little and turning it into large sums over time. It doesn’t take money to make money. It takes knowledge and action to make money.

Question: We are in our 50’s and have exactly $643,985.37 in our bank account. That’s all our life savings (me and my wife). Should we buy a nicer house or risk starting a business to double our money?

Answer: I don’t think you should do either. You’re in the latter stages of life and that’s your nest egg. I know that the lure of a nicer house is strong, but ask yourself this question – “Do we really need a nicer house or do we just want a nicer house?” And I’m sure that the thought of doubling your nest egg with some business idea sound appealing, but think about how you’d feel if you lost it all. Do you really want to start over in your fifties? You’ve done well by building your nest egg over the years. Don’t do something you’ll regret. If you want more income, then bootstrap a small business and see where it leads. But don’t touch your life savings.

Question: What important things does a 20-year old need to know about money and finance?

Answer: Learn to find happiness in yourself, not in material things. Don’t get rid of something that works fine just because you want something newer… (phone, car, computer, etc). The “I want the newer model” addiction is responsible for more people living in middle-class mediocrity than any other reason. Live below your means and save the rest. Then, take a portion of that savings and turn it into investment capital. Lastly, invest in yourself. It’s the single best investment you can make.

Question: You seem to be against raising the minimum wage.  How is it possible to become rich off of minimum wage jobs because the minimum wage is often not enough to support even the minimum basic needs of a person?

Answer: You don’t get rich off of minimum wage jobs. That’s the point. Minimum wage jobs should be a temporary spot on the road to wealth, not a place to setup a permanent income home. The problem with fighting for a higher minimum wage lies in the principle of: “be careful about arguing for your limitations, because if you win you get to keep them”. I know some people didn’t like my thoughts on the minimum wage, but they stem from the fact that you’ll never get anywhere in life arguing for more pay for the same (or less) value being provided. A better use of your time and energy is to work on improving yourself and the value you bring to the marketplace. Once you do that, your income will increase. There’s no shortage of people making good money in corporate America. Don’t ask, “why don’t they pay me more?”. Ask, “what can I do to become more valuable?”

Question: I think what you and others are doing with the Give Back Promise (link) is cool and all, but if all the millionaires and multimillionaires just donated all their money would it eradicate poverty?

Answer: No, just handing out money won’t eradicate poverty. The reason is that sooner or later the money would run out and the problems that caused poverty in the first place would still exist.  Also, given the number of people living in poverty, the amount each person got probably wouldn’t be enough to make a huge difference to begin with. I think using money to get at the causes of poverty is the answer – focusing on things like increasing education, decreasing disease and so on. Wisely spent money that seeks to address the myriad sources of the problem is far superior than just handing money, even a lot, to each person.

If you would like to have your question answered in a future blog post, then subscribe to the blog. That’s it for this round folks. Thank you for the great questions!

Be free. Nothing else is worth it

Financial Freedom Monty Campbell

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  • victoria08

    “Learn to find happiness in yourself, not in material things.” Priceless advice.

    • https://www.montycampbell.com/ Monty Campbell

      Thank you!

  • Kal

    I disagree with you about raising the minimum wage. By boosting pay in the low-wage jobs on which more families are relying on
    than ever, it will help restore the consumer
    spending that powers our economy and that local businesses need in order
    to grow.

    • https://www.montycampbell.com/ Monty Campbell

      Hi Kal,
      First off, you’re not allowed to disagree with me. Just kidding. 🙂
      You are 100% correct in that we are a spend economy and more spending does boost our economy in general. With that said, I personally don’t think that we should be encouraging those earning minimum wages to do more spending! There’s plenty of higher income earners that can carry the weight of spending this country needs to sustain itself. Also, my main argument against increasing the minimum wage is that it is like arguing for your limitations. If you’re not careful, you get to keep them! Hope that makes sense.

  • tamara

    Monty-Regarding the Give Back Promise, how does your organization decide how to disburse funds?

    • https://www.montycampbell.com/ Monty Campbell

      Hi Tamara,
      We don’t receive or disburse funds at GBP. Our group’s mission is to encourage the world’s millionaires and multimillionaires to give the majority of their wealth to charity in their wills. To whom they give their wealth to, is really their decision and we don’t get involved in that aspect of giving. Hope that helps.

  • Melanie H.

    I liked your answer to the question about wealthy people being shallow regarding who they associate with!

    • https://www.montycampbell.com/ Monty Campbell

      Thanks Melanie. It’s a touchy subject for a lot of people, but who we associate with is vitally important. Habits, both good and bad, are contagious!