Does Creating Wealth Make You Selfish and Greedy?

Alexander Green
by Alexander Green, Chief Investment Strategist, The Oxford Club
creating wealth 0

My recent column on “Just How Much Is Enough?” generated comments aplenty from readers.

Some agreed with a post by John K., “I don’t know how much is enough. I just know I’m not there yet.”

Others agreed with a reader’s contention that the individuals in the New York Times article I cited - who believed that “enough” was somewhere between $20 million or $65 million - were “just greedy.”

I think a better explanation is these folks were “just dreamers,” since none appeared to be actually doing anything to build a fortune for themselves.

But are those of us who are creating wealth “greedy”?

Greed, of course, is a nebulous but loaded term. The Oxford English Dictionary defines it as “intense and selfish desire for something, especially wealth.”

Yet I don’t believe it’s selfish to pursue financial independence.

You can’t reach your potential or live life to the fullest if you spend your days swimming in concerns about money.

Money is independence. It liberates you from want, from work that is drudgery, from relationships that confine you. No one is truly free who is a slave to his job, his creditors, his circumstances or his overhead.

Wealth is the great equalizer. It doesn’t matter if you’re a man or woman, black or white, young or old, tall or short, gay or straight, educated or not. If you have money, you have power - in the best sense.

Wealth is freedom, security and peace of mind. It allows you to do and be what you want, to support worthy causes, and help those closest to you. It enables you to follow your dreams, to spend your life the way you choose.

Money gives you dignity. It gives you choices. That’s why every man and woman has the right - and perhaps even an obligation - to achieve some level of financial independence.

If we have trouble defining how much is enough for ourselves, how can we know if someone else has too much?

Is it greedy or selfish to want a bigger house, a better car, another ultra-HD, flat-panel TV or the latest and greatest iPhone?

Isn’t spending money good for the economy? Doesn’t it create jobs?

And how can it be selfish to want more money if the only two ways to get it are either providing someone with a good or service they want or investing your capital somewhere it’s needed?

Either way, you’re helping other people - and earning that money.

If you earned it legally and want to spend it, why is that wrong? Or how does it become wrong when the wealth - or the spending - reaches a certain level?

No doubt some will point out that ours is a society of great economic inequality - and that it’s unconscionable for some to have so much while others have so little.

I have my own thoughts on the subject... but I’d also like to hear yours first.

So click here to send me your thoughts on “How Much Is Enough?” and what - if anything - should be done to mitigate the economic inequality that exists in this country.

I’ll share the best reader responses - along with my own - in an upcoming column.

Good investing,

Alex

Thoughts on this article? Leave a comment below.

An Investment That Fights Global Inequality

Whether they know it or not, Alex’s Oxford Communiqué subscribers have one investment that’s reducing the global wealth gap... and earning them some incredible returns in the process.

I’m talking about the iShares MSCI Emerging Markets Fund (NYSE: EEM), which puts investors’ money to work for businesses in the developing world. It’s an investment in the rising standards of living of the global poor - and a very good one at that.

Here’s Alex checking on the fund back in April...

Global investors shoveled almost $60 billion into developing market equities in the first three months of 2017, including $29.8 billion in March alone, the highest monthly total since January 2015.

Years of underperformance are suddenly turning into outperformance - and it’s not hard to see why.

A few months ago, we learned that China’s economy - buoyed by heavy investment spending - grew 6.9% in the first quarter, better than economists had projected.

It’s not just export-driven. While Chinese exports grew 16% in March, Chinese imports grew 20% during the first two months of the year.

Nor is this heady growth restricted to China. According to the Institute of International Finance, emerging economies as a whole grew 6.8% in the first quarter, the strongest reading since 2011.

Wouldn’t you be delighted if our own economy grew even half that fast?

But here’s why you need to pay attention here. Strong economic growth leads to better corporate earnings growth. And better corporate earnings growth leads to higher share prices.

So let’s take a closer look at both our investment vehicles.

The iShares MSCI Emerging Markets Fund attempts to replicate the return of Morgan Stanley’s emerging markets index. It offers exposure to more than 800 large and midsized companies throughout Asia, Latin America and Eastern Europe.

With more than $29 billion in assets, the fund gives you broad diversification, high liquidity and low expenses with high tax efficiency.

Emerging markets will be an engine of world economic growth for decades to come. Consider the demographics. These countries contain three-quarters of the world’s land mass and nearly 85% of the people. China and India alone make up nearly a third of the world’s population.

Consumers in emerging markets need everything we take for granted in the West: housing, automobiles, healthcare, credit cards, computers, smartphones, insurance and so on.

However, countries like Brazil, India and China are not going to let Western firms come in and pick all the low-hanging fruit. If you want to reap the maximum benefit from the world’s biggest economic development story, you need to have part of your portfolio in these markets themselves.

Also, consider the diversification value. These stocks don’t move in lockstep with those in the developed world. In technical terms, when ours zig, theirs often zag.

- Samuel Taube with Alexander Green

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