To spend or to save? How can we solve the inherent conflict between the two? A couple of months ago, I met a door-to-door salesman who had an intriguing idea. He provided a minimalist yard service and invested the savings for his clients. "Spend at your current rate," he said, â€œ"nd let me save you money by prudent purchasing. You've both spent and saved, instantly solving the conflict."
Last month, the same guy showed up again, and confessed he was Adam Smith, the 18th century economist. His thesis was that savings were paramount and what we needed were innovative ways to prevent us from spending so we could have more to save.
This month when his colleague knocked on my door, I was ready.
Dr. Constan: I have met Adam already, so who are you? You must be someone of great renown.
Dr. Freud: You sir are a very perceptive individual, and you have excellent insight. I like that in a client. You see, my name is Sigmund Freud.
Dr. Constan: The Father of Psychiatry? But I thought you were dead.
Dr. Freud: That's a common problem with psychiatrists. You lay on our couch and we sit there taking notes, saying nothing for long periods of time. Many of our clients think we've died. But weâ€™re actually thinking deeply about their problems. I've been thinking about society's conflicts between saving and spending for the past century or so, and I believe I have discovered that these conflicts have deep roots in psychological issues.
Dr. Constan: Like what?
Dr. Freud: Have you wondered why you get a psychological rush when you buy something expensive? I've traced the roots of that feeling to early childhood. It's the same all-encompassing feeling of contentment you get being nurtured by your mother. Later, when you discover that your existence is separate from hers, you lose that feeling and are forever trying to regain it.
Dr. Constan: Ha! This is one of your "early childhood trauma" explanations for every problem. I believe our modern psychiatrists have debunked all that.
Dr. Freud: They've tried, but now I have experimental evidence from actual subjects, like you. I'll be publishing it shortly and will, no doubt, be making a comeback.
Dr. Constan: Interesting. What else have you discovered?
Dr. Freud: The fear of taking risks, common to many investors, is traced to having an absent father during childhood. The dad is out making a living, and the child does not understand the source of his financial security, so he becomes afraid. As a child, he sits nervously on the front step waiting for dad to get home. As an adult, he buys only "guaranteed" forms of investments. I also find the aversion to paying taxes stems from unresolved conflicts with authority. The child is in conflict with his parents over autonomy issues. As a kid, he tattoos and pierces everything; as an adult, he tries to stiff his "Uncle Sam" with offshore investing and shady deals with people selling oil wells.
Dr. Constan: So, in view of your new discoveries, Sigmund, what advice would you have for our readers?
Dr. Freud: When their financial advisor starts talking about a "comfort zone" for this or that type of investment, or tries to establish your "values," remember that these are psychological issues. Rather than just accept that you are the way you are, ask yourself why you are. Then, instead of living in the past, make a change. Louis L. Constan, a family practice physician in Saginaw, Michigan, is the editor of the Saginaw County Medical Society Bulletin and Michigan Family Practice. He welcomes questions or comments at 3350 Shattuck Road, Saginaw, MI 48603, 989-792-1895, or louisconstan @hotmail.com.