50 years ago, When a farmhand completed a long day after a long week, the farmer tended to roll out a wad of cash and paid down the line what each one had accomplished. The pay was a direct measure of the week's worth of work. Those that worked the hardest got paid the best. Imagine if they didn't get paid in cash. Imagine they got their cash deposited directly to a checking account in their name. At the end of a long day, they went into town and checked the ATM to see how much they were worth. They never actually hold the cash. They just see it on the screen.
I just got off the phone with a man I've never met to discuss a transaction measuring in the tens of thousands of dollars. Not just anybody's ten's of thousands of dollars, but potentially my ten's of thousands of dollars. And yet, this doesn't bother me in the slightest. I'm contemplating borrowing against the value of my home to pay off a car and consolidate some debt under a lower interest rate and whose interest is tax deductible. The guy likes it because I'm paying his company instead of somebody else's, and I like it because I'm paying less overall. But shouldn't a sum like 10 or 20 thousand dollars at least make my hair stand on end?
When I was little, I received a weekly allowance of $2.50 / week. For that I had to take out the trash twice a week and clean the toilets every Thursday. Over time the minimum wage creeped up (as did my responsibilities) to a whopping $5 / week. I got paid in cash, as it didn't make sense to write a check for $5, and my folks were paying me under the table. There was no contract, no formal written notice of wages in exchange for labor. I remember getting my $5 and stuffing it into a wallet that tended to have several, but never very many $5 bills. Sometimes I would trade in 4 for a $20, but that reduced the thickness of the cash and that never felt good, so I tended to stick with $5's when possible.
I would often save up for several months and then trade in those $5's for a lego kit or videogame, and I was always enjoyed those things as I'd worked so hard to get them. I remember getting one Lego kit that I'd seen in the store for months. When I finally had enough money, my folks drove me to Toys R Us to pick it up. I got the last one in the store. It'd been discontinued. Earlier that month I'd been tempted to buy some candy with some friends but opted out. If I had I wouldn't have gotten the toy before they pulled it from the shelves to set for the next big thing. Frugal behavior never tasted so good!
But.... something happened. I started to make more money. A guy with places to be and things to do (like write blogs no one reads :)) sadly cannot live on $5 a week, and my skills warranted a higher rate of pay. I entered the life of a teenager and began requisite teenager jobs. For the first time, I made enough to warrant getting paid in checks. This necessitated a checking account (cool! very grown-up I though). And once a month I got a statement allowing me to see how much was in there. I even got a debit card allowing me to buy things without even using cash. It made spending terribly convenient (those clever bastards!)
Nowadays, I have direct deposit with automatic billpay. I go to work for 40+ hours a week, do my thing, and every two weeks another chunk of change gets dropped in my account. It's there for about 3 days before the next round of bills to be paid causes the digits to drop back down again. It's a heart beating to the rhythm of commerce.
The problem is I find it harder and harder to comprehend the real value of a dollar. I almost never carry cash as I tend to loan it out, never keeping track closely enough to expect it returned. Everything is paid in plastic, and I download my net worth into Quicken 4 times a month to make sure balances are trending up and expenses are trending down or flat. It's not about value anymore. It's a math game we all play to make small numbers big. It makes it easier to talk about tens of thousands of dollars with strangers you'll never really meet. Hell some people talk about hundreds of thousands, millions of dollars with strangers. They trust them to manage their large numbers to make them even bigger. How often does Tom Hanks look at his checking balance? When he pulls out a card to buy lunch, does he even think about how much the sandwich costs? How much is a dollar worth to him? How much is it worth to me? How much will it be worth to me in 10 years? The fact is, it won't. It'll be part of a bigger number hopefully. But will I be able to teach my children the value of a dollar if I've forgotten it myself?
Thursday, November 8, 2007
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