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Index Of The Seven Deadly Sins Links:
Although popularized by the epic poem, The Divine Comedy
The version I am using as the basis of this series of posts will date back to the 6th Century AD using the nomenclature of the Catholic Pope, Gregory the Great.
These sins are ordered from the least deadly to the most egregious (and this series of posts will follow the same ordering).
The third Deadly Sin was coined Avaritia (later donning the name of Greed)
Although this sin is listed third out of seven in the world of theology, in the financial world I think this sin deserves a far worse ranking.
Many a fortune has been lost because of greed.
The cardinal sin of greed causes you to never be satisfied with what you have.
“He who is not contented with what he has, would not be contented with what he would like to have.” – Socrates
When the oil baron John Paul Getty, who at the time was the richest man in the world, was asked what would it take for him to feel secure, his response was, “More.”
Getty’s pursuit of money was so all-encompassing that he even had the audacity to install a pay phone in his mansion so that his guests would not make phone calls on his dime.
“The lust of avarice as so totally seized upon mankind that their wealth seems rather to possess them than they possess their wealth.” – Unknown
It is easy to succumb to Greed, epitomized by the acronym, FOMO (Fear of Missing Out).
When the Bitcoin phenomena was being splashed throughout all media platforms regarding how many individuals became instant millionaires, there were more than a few individuals who bought into the hype train and jumped in.
These individuals were chasing performance, afraid of missing out, and had greed as the underlying cause of making these sometimes rash financial decisions without due diligence.
There was a small part of me that indeed wanted to buy bitcoin because I thought I would be kicking myself later if someone else made the millions that I could have.
I did not understand bitcoin and its underlying fundamentals.
Instead I wanted to jump in with everyone else in the bitcoin craze so that I too would not miss out on this opportunity.
Fortunately I did not go through with this initial impulse but I guarantee you there were many in my situation that did not show the same restraint.
Greed can make you stay in riskier allocations in hopes of getting even higher returns even though you may have, as William Bernstein puts it, “already won the game.”
The problem with this line of thinking is that at some point the piper will be paid.
During the next market correction that will, not if, occur, those that would have remained financially independent had they scaled back earlier on risk may now find themselves dropping down a color or two in the wealth zone.
“Only when the tide goes out do you discover who’s been swimming naked.” – Warren Buffet
Do not overexpose yourself because greed has you chasing every ounce of return the market can possibly provide.
Greed is the fuel that fans the flame created by wall street talking heads spouting off which stock is the next one to take off.
How far do you think the TV ratings for Jim Cramer’s Mad Money would plummet if his approach was to calmly extol the virtues of index investing?
That would make for boring TV.
Greed can also cause us to make questionable decisions in order to “maximize” gain such as trying to time the market.
“And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful” – Warren Buffet2004 Annual Shareholder Letter.
Market timing is a fool’s errand because in essence you have to be lucky twice:
- Have to sell at the market high
- Have to buy at the market low
Greed instead wants us to do everything we can to find the next hot tip so that we can go all in and make more than our brethren and their boring passive investing ways.
Greed destroys any concept we have of enough because nothing is ever enough in greed’s eyes.
“Greed is a fat demon with a small mouth and whatever you feed it is never enough.” -Janwillem Van De Wetering
The corresponding heavenly virtue of Charity is meant to counter the ill-effects of Greed.
We all know the old adage, it is better to give than to receive.
In my experience I truly find that to be the case.
I get more joy giving an item or experience to someone much more than I would get if I instead chose to treat myself.
This is why so many billionaires choose to give their fortunes away.
These charitable acts bring much more happiness to them than sitting on piles of money that they could not possibly ever spend.
Hopefully by now you realize the damage that greed can do to your financial well-being and plan countermeasures accordingly.
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-Xrayvsn
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There is a lot of greed in America for sure but in the rest of the world too. Much of what people think of greed though is also consumerism and materialism, which to me are offshoots
I agree that greed is a universal vice and not just confined to US soil. Consumerism and materialism are most definitive variants of greed as well.
I fell prey to the bitcoin shit show. I felt like I was missing out. Hearing how so many other people made a killing caused me to ignore logic and I didn’t educate myself before I dove in. I lost a significant amount of money and learned my lesson. The thing about greed is that it can never be satisfied. I’m learning the best and most realistic way to wealth is not in trying to seek the “get rich quick” schemes. It is to slow down and have your money grow slowly over time. This also has the benefit of… Read more »
So sorry that you got hit with the bitcoin bug. I honestly was super tempted about it but finally decided that I had no clue what it was about and that ended up saving me.
You are right that like the hedonic treadmill you will never get to a point where you have enough. If Getty didn’t get there then there is no way mere mortals like us can.
Appreciate you sharing your story and glad you got some use out of this article
Don’t time the market Buffet says? Why is he sitting on 100 + billion of cash if he’s not timing the market? Re-balance your accounts annually? That’s timing the market. On the way up you sell some stocks high so you have some profits on hand to buy low when stocks take a tumble. Everybody times and everybody speculates. You only have to answer 1 question: how much return can you get for that risk you bought. Greed is the purchase of too much risk for too little return
Yeah I think Buffet has some different rules for himself. It also helps that just because of name recognition, whenever he makes an acquisition, the market hears that Buffet is investing and lo and behold the price goes up and he looks like a genius. A self-fulfilling prophecy. For the regular Joe investor unfortunately does not work. No one cares what Xrayvsn bought or sold. LOL
Great point about the joy experienced through giving versus treating yourself. I have found that so true for myself as well although as a child I never understood that concept. We loved getting gifts as kids but could never understand how our parents and Grandparents could just enjoy watching us open them. I believe that is something only maturity and contentment can teach us.
I guess we are finally becoming adults. Lol. Just wait till you get your new addition to the household. You are going to have so many opportunities to enjoy the same things soon
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Dude that picture on your last pin is terrifying haha
My husband and I have many discussions about guarding our hearts from greed. Because for now, it’s not really an issue because we are pouring all our money toward student loans and therefore feel like we have no money (so fun!). But one day we won’t have to do that, and we’ll need to make decisions very consciously for the right reasons. We’re already running into that.
Good post!
Thanks MFM for the comment. The paydown debt period is definitely not a fun time but it sets you up for a bright financial future so kudos on sticking on that path rather than dragging it out (like I did). It is true when you are focused on something like that you don’t typically succumb to greed. It is only when you have discretionary money where it starts to come into play. I feel slow and steady wins the race rather than try and be greedy and go into something much riskier for a potential payday.
I almost bought bitcoin at 19k…..I was ready to do it. 0.5 bitcoins. Were almost mine at a bargain price of just 4x higher than the current going rate! What stopped me was being in a state that made it difficult to buy them. I couldn’t figure it out…..
Well looks like a financial angel was looking over you and prevented you from buying it at that price and losing 75%.
I was tempted too but finally decided I did not know anything about it and shied away
Hello from Scotland. Not just the U.S when it comes to greed!
I think you might be my first commenter from Scotland! Appreciate you stopping by. I agree, greed is not bound by nationality. Have a great day and hope things are safe there.