Thursday, January 22, 2009

Some Money Conundrums

What is the relationship between wealth and consumption? If you are rich, does that necessarily mean you waste more resources? One would think so, right?

Does that mean that a rich person should hoard their money, instead? If they invest it, doesn't that mean that other companies will use the money to consume resources? What if they give it away - won't their recipients use it to consume resources?

If you are trying to make less of an impact on the earth, should you try to earn less money, as well, to avoid the whole consumption trap?

What is the perfect income, then? How do you know when to stop?

I have lived through lean times and abundant times, and I've learned a funny thing. There's a tipping point between being poor and not-so-poor where every additional dollar you earn gets eaten up by additional taxes and the loss of aid. It's the number in the United States where your "earned income credit" amount begins to go down. In Canada it's the number at which you start paying more for health care.

There must be a magic number as far as consumption is concerned - a number at which you can be self-sufficient without being exploitive. I really don't know what that is, though.

At first I thought it would be best to stay at the lowest income you could get by with, but then I realized there are a few problems with that:

1. Cheap goods are often worse for the planet and people in third-world nations to produce than expensive goods are.

2. Natural products are often more expensive than ones made out of materiels that will stay in our landfills for all eternity.

3. People who don't have a "cushion" of money often cost the rest of us more in terms of health care since they use emergency services rather than preventive ones.

So maybe it's not how much money you have - it's how you spend and invest it. One thing I am sure of, though - the less you spend on things, the easier it is to build a "cushion" even if your income is low.

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