Personal Finance and The Micawber Principle

I happen to like reading books about personal finance, although I doubt, at age 54 and with my roof, retirement, and share portfolio all long since sorted out, that I really need to do much more than plan out how to live long enough to spend what I have saved and what I will passively earn from now on. [Really, I should focus my reading pleasure on the 100 book backlog piled on my mantelpiece and coffee table rather than remind myself of what I already know.]

Hence I just finished reading Ramit Sethi’s book ‘I will teach you to be rich’, which is perhaps best described as an American version of ‘The Barefoot Investor’ (a book which not only have I read, but of which I have bought multiple copies of and handed out to friends and family alike in recent years).

At the end of the day, I get the feeling that these books are much of a muchness, and their message can be summed up as a more sophisticated version of the Micawber Principle, which I will repeat here:

“Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.”

This is taken from Chapter 12 of the Charles Dickens novel ‘David Copperfield’. Dickens himself was always preoccupied with money, probably because his father had been imprisoned for debt, and improvident spongers like Micawber and Skimpole from ‘Bleak House’ are amongst my favourite of his caricatures.

Most of Dickens’ novels are, to my mind, almost unreadable due to his preoccupation with money. This is because he was paid by the word, so his books frequently became far more verbose than they needed to be for the storyline to proceed, given he would pad them out for the extra cash.

But this all does get me thinking about the modern culture of self help books – of which I have probably read far more than my fair share – and which are for the most part an American inter-war development.

Self help books divide into two categories. One is the Personal Success category, and the other is the Get Rich category. The two archetypes in each respective field are Dale Carnegie’s ‘How to win friends and influence people’, and Napoleon Hill’s ‘Think and grow rich.’

The Personal Success genre is mostly about changing personal behaviour and mindsets in a way which make you able to better deal with other people, so as to improve your success in your personal and professional lives.

Carnegie’s work can be summarised as saying please and thank you, remembering names, and shaking hands firmly. Getting along with people is important if you are to get ahead in life, after all.

Mind you, one of the more recent books in this genre, ‘The Game’ by Neill Strauss (although perhaps not so much the sequel), seems to be more an inside expose of the subculture of pick up artists and how they implode emotionally, rather than a proper guide on improving one’s success with women.

Napoleon Hill, on the other hand, was all about how to change your mindset at a very inherent and innate level, so as to become rich. It involves challenging your own values, attitude to risk, and ability to interact. It demands a lot more of you.

Having read Hill, I think he was a decent guy, but I don’t see that the secrets to wealth he sets out in his book work that well, and he left the way clear for a large number of later writers who are not as decent as him. For example, when I read Kiyosaki’s ‘Rich Dad Poor Dad’ 20 years ago, I found the general tone and apparent amorality of the author to be quite repulsive. Yet he advised the reader that it is easy to change and become just like him.

But that is not so easy for people. I suspect that following the formulas in ‘Rich Dad Poor Dad’ involve a similar level of behavioural and attitudinal change as in ‘The Game’ – not everyone is going to want to behave the way that either the fragile womaniser ‘Mystery’ does (Strauss’ book is hilarious in describing his implosion), nor the avaricious Kiyosaki to attain success in Love or Money.

And that perhaps is why books like ‘I will teach you to be rich’ and ‘The barefoot investor’ are so popular. They do not expect people to change who they are or how they think or what they believe or their values, only that they go and apply the Micawber principle to their financial life.

Published by Ernest Zanatta

Narrow minded Italian Catholic Conservative Peasant from Footscray.

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