Who do you trust? Who trusts you?
In his Money Manifesto this week Living Money founder and author of Right Money, Right Place, Right Time considers the necessity of including a statement of personal values in our life and financial plan and discusses the importance of trust in our dealings with money.
A world of trust?
So as we draw up our roadmap to a new life we need to consider our values and whether we need to adjust our values to make our own goals and personal projects possible.
Many of the great religions provide guidance on this, and whether you believe in a god or not, the guidance and morality provided by the churches can be a good starting point. St Benedict, who lived in the late fifth century, for instance, extolled core values such as being attentive to others, being hospitable, respecting others, having personal integrity and humility, sustainability and conservation, and keeping life in balance. The core theme is compassion, selflessness and care for others
One of my favourite authors, Alain de Botton writes in his book Religion for Atheists that, these days, we need to recognise our own selves as the authors of our own moral commandments. Its interesting that he uses the word ‘author’ here, implying that we do need to set down in writing our own moral code, and where better to do so than in the roadmap for our lives. However, taking the writings of the sages of the past can be a good starting point.
When it comes to money, one particular value seems to predominate. Trust. And when trust breaks down, things go wrong.
Much of the language of money originates in the language of trust.
The word ‘credit’ stems from the Latin word ‘credo’ which means ‘I believe’. ‘Confidence’, the quality that underpins economic activity comes from the Latin ‘confidere’ which means to have full trust. In other parts of the world the long term loan that we in the UK call a mortgage is called a bond, an agreement in trust. And, although many may not believe it these days, the motto of the London Stock Exchange is Dictum Meum Pactum – My word is my bond.
Trust is a valuable commodity that seems to have been devalued by scandals in the world of finance, journalism, politics and business in recent years, to the benefit of none of us.
In our own road maps we need to set out our own moral code and address the matter of trust in our finances. How are we going to ensure our own trustworthiness, to ensure that when we say we will pay someone, we do it.
On the other side of the coin, we need to define our own criteria for who we inner turn will trust.
A story told by author Erin Arvedlund in her book on Bernie Madoff, the fraudster who not long ago ripped off institutions and the public to the tune of around $65 billion, illustrates the importance of this last facet of trust. Madoff cultivated an aura of trust by posting consistent, attractive returns that were not excessive. One group of people he took in were the fraternity of jewish ex-fighter pilots, people who had trusted one another with their lives. One individual was taken in by Madoff. However, this pilot’s word was enough for many others to follow.
As Arvedlund writes, these people were not driven by greed, but rather by the desire to invest in their futures with someone who they could trust. It was this high level of trust that led smart and savvy people to invest with Madoff over the ensuing years without asking serious questions.
So setting out how we are going to be trusted, and who we are going to trust, is nothing short of a regime change for our futures.