I’m late for my lunch appointment and covering the 20-mile stretch of highway between Raleigh and Durham at a brisk pace. It’s the last day of September. While North Carolina is showing few signs of autumn, some cool air rolled in the night before and pushed the summer humidity out to the coast. With a shining sun, it’s perfect for rolling down the windows and letting the wind swirl around the faded leather interior of my old Toyota.
I’m heading downtown to meet Kristen Cox, an investment associate at Self-Help Credit Union. I’ve been thinking about the Enough Project for a few weeks now, and I’m about to write my first check.
The idea is to put some chunk of our family money to work supporting conscious capitalist organizations and projects. We’re doing pretty well these days, financially speaking. I’m less and less compelled to make every dollar go into investments that aim for the highest possible returns. If there’s a tradeoff to be made between earning the highest return possible versus one that’s merely reasonable, I’m willing to explore the reasonable option when it means the money supports something constructive, meaningful and that provides some benefit to my community.
This is the gist of the Enough Project: putting a small slice of our money to work in ways that are consistent with the things we value.
Yet I find myself glancing anxiously at the passenger seat of my car. It’s empty save one checkbook wrapped in the same navy blue vinyl cover my bank issued me when I opened the account more years ago than I care to remember. I’m not sure why, but I’m a little nervous about using one of those checks to transfer our six-month emergency fund over to Self-Help. The transaction is riskless. The new account is covered by NCUA insurance, so it has all the protections the FDIC provides at my bank. It will earn the same interest rate it gets in my bank. It’s completely liquid with the money available to pull out anytime I might need it. True, the check is the biggest I’ve ever written, but I’m writing it to myself! Why the fear?
There’s something about this drive, about this check, about this Enough Project that has me thinking hard about my crazy relationship with money these past ten years. It’s creating a serious case of navel-gazing.
Flashback to June 2004. I was down to my last $50. Literally. And I had a wallet full of maxed-out credit cards, a mortgage-sized student loan payment, and a car note to boot.
It had been six months since my last paycheck, and my job options were so dim that I passed my days filling out applications on the Halliburton website. My mind spun vivid daydreams in which I drove 18-wheel supply trucks in caravans criss-crossing the deserts of Iraq or Afghanistan, pulling a kevlar bucket tight by its chinstrap when the occasional mortar shell came whistling down. Spending the next year or two as a war contractor seemed my best option for income. Perhaps my only option to avoid whatever comes after one runs out of money to pay his creditors.
I remember lying across my bed in the middle of one sweltering Charlotte summer day, my roommate’s dog resting her muzzle on my thigh while my brain dizzied itself spinning through every desperate plan that might keep me afloat just a bit longer.
Suddenly it all stopped. My mind emptied itself, becoming utterly silent. Staring at the ceiling for what must have been five, maybe ten minutes of total quiet, the despair slowly gave way to a simmering anger. I muttered aloud, for no one in particular, “Never again.”
I had been cavalier about money, spending what I had, always confident more would come. Always confident my career would progress through ever-rising spirals of bigger titles and more money. So why not spend now? The money was sure to follow; to magically appear when I needed it.
Now I was broke with no prospects for income. I had lost all control over money, and my desperation for it was driving my most important life decisions. Iraq?! Afghanistan?! Halliburton?!
Shame on me, I thought, for being so reckless; for putting myself in this position. I wasn’t going to let it happen again.
Staring up at that ceiling, I seethed once more: “Never. Again.”
After months of rejections, things turned quickly. In that funny, unpredictable way life tends to work, two distant connections led to two job offers, both coming just a few days apart from each other. Within a week I had accepted one and moved to Raleigh with a financial lifeline in the form of $1,500 cash to cover moving expenses. The money staved off creditors for a month until my first full paycheck came through. Friends let me crash on their spare bed until I could afford rent on my own place.
I had a new start. And while so many other resolutions I made in that same period would come and go, the “never again” pledge held fast.
Martin Eakes and Enough
Fast forward to December 2005. A different life was taking hold. An adult life. I had become re-acquainted with Kate, fallen in love and was beginning to look for engagement rings. I was making more money than ever before, and the pay kept rising with some quick success that brought promotions and added responsibility at work. A spartan lifestyle allowed me to get those credit cards reined in, and I started saving again. I had some cushion now; a little space to breathe.
I had come a long way financially in just a year and a half.
But bitterness lingered from that too-recent brush with insolvency. I started cultivating what I can only describe as a scarcity mindset. Every time I made a few bucks, I intentionally called back the desperate memory of that Charlotte day. “Squirrel it away,” I told myself. “You can never be back in that position again.”
Around that time I was flipping through our local paper (1) and came across a story about Martin Eakes, co-founder and CEO of a Durham-based credit union called Self-Help. His organization was 25 years old and Martin just a hair over 50. The paper was donning him “Tar Heel of the Year” in recognition of all the good he had done lending money to the working poor so they could start businesses and contribute to their communities.
The writer noted Martin’s credentials: Davidson educated with advanced degrees from Princeton and Yale; an abiding intelligence that helped him master the complexities of financial law and regulations; and the grit to stand eyeball-to-eyeball with the big money behind predatory lenders and not blink as he lobbied to shut down payday loan parlors in North Carolina.
Here was a man with the skill and wit to name his salary in any bank, law firm, or think tank in the nation. He was a man with a wife and two sons to support. Yet this man at twice my age volunteered – yes, volunteered! – to take home far less than I was making at the time. He capped his salary at $60,000 a year, declaring it enough.
The newspaper’s photographer that day had an eye for visual metaphor. He snapped a telling shot of Martin – he who had built the country’s largest non-profit community lender – dragging his city-issued garbage can from the curb back to his modest house, sporting well-worn jeans and beat-up tennis shoes, a pair of tree limb loppers clutched in his gloved left hand. Despite his accomplishments, he took out his own trash; trimmed his own shrubs. He was nothing exceptional when doing weekend work at home, among his neighbors. He was every-man.
Nearly eight years would pass before I thought of Martin Eakes again. But when I did, it was that photo that popped instantly into my head.
The Never-Enough Glitch
Someone once asked John D. Rockefeller, he of Standard Oil Croesus-like wealth, how much money is enough. “Just a bit more,” he replied. “Always a little more.”
There’s this bit of code embedded deep in the primitive regions of our brains. If a little is good, it instructs us, more must be better. And if more is better, a lot must be best.
The logic is mostly benign, but in many of us it glitches as it moves from more to a lot. The logic loops and metastasizes. It cannot define a lot, so it keeps compounding more. It is insatiable, innurred of a sense of enough. There is never enough.
Call it the never-enough glitch. Or call it hoarding. Either way, it represents a pathology. A brokenness.
Thermostats and the Rule of 72
I’m traveling for work, and Kate sends me an email with a photo attached. It’s mid-December 2007 and the picture shows our home’s thermostat at 58-degrees. “Enough!” the message reads. “It actually got down to 57. I can literally see my breath in the house. I’m turning on the heat.”
I managed to infect my bride with my never-again fixation. We were making good money then, but I was challenging every dime of spending. We were only recently married, and this sense of being “provider” was weighing heavy on me. I had decided that we needed a three-month cushion of cash as an emergency fund just in case something happened that pinched our finances. This was going to be my sleep-better-at-night fund. At the same time we were paying off debt at a feverish pace.
How? By playing little games with our household expenses. We would set a budget and hold each other to the competition of finishing the month beneath it. When Kate sets her mind on a goal, she becomes single-minded. There is an intense competitive spirit about her, though it rarely comes off leash. For her, our budget was a game. A little bit of fun for the newlyweds trying to figure out this marriage partnership would work when it came to things like money.
For me, I set the stakes here higher. I forced myself to imagine being back in Charlotte three years earlier, staring at the ceiling from my bed. Wondering whether I could pay rent the next month. “Never again.” I told myself to play the game as if there would be no paycheck next month. I created a sense of artificial scarcity, and it was a powerful motivator.
In looking at my winter expenses from the previous year, I noticed that my natural gas bill soared from $70 to about $160 per month once I turned the heat on. Here was a chance to save; to come in below budget. So we started a game in October, enjoying that brief window when the weather required neither air conditioning nor forced heat. We decided to see how long we could go before turning on the furnace. The longer we could go, the more we could plow into the emergency fund. Those 90 bucks a month counted.
Sixty degrees might sound pleasant for outside temperature, but it’s downright frigid in a house. We would fortify ourselves each evening with sweaters and scarves, wool socks covering our toes and wool caps pulled down over our ears. The hardest part was climbing into bed at night. The coldest air seemed to save itself for that space between the sheets. We would shiver for several minutes before our own bodies generated the heat for sleeping warmth.
It seems so distant now; such an odd game to play. But something about it was fun. Fortunately Kate had the good sense to cut-off the competition that December night when I was traveling (cozy, no doubt, in my well-heated hotel room), turning on the furnace to warm herself.
By the end of winter 2007 and 2008, we had far surpassed the three-month savings goal. This penury allowed us to stow enough for a six-month fund. That felt right to me. That’s the amount of cash I wanted access to in case anything crazy happened. Any excess would now go toward building wealth – making a real cushion. It was time to start investing.
Kate allowed the game once more the following winter, but she was deep in the throes of pregnancy and openly doubting my frugal inclinations (what with our baby girl coming and all). She insisted on a compromise rule. Rather than let the temperature drop into the 50’s, we would simply hold the thermostat at 60.
One last anecdote. Kate and I were strolling along a South Carolina beach a couple years ago. As we walked and talked, we checked up on our finances. I shared with her the progress we’ve made as our emergency savings blossomed into a nest egg, much of which was now invested.
I had become quite good at running a quick mental algorithm called the Rule of 72. Take your rate of return, whether it be interest you’re being paid on a loan or pace at which you expect an investment to compound, and divide that into 72. The result tells you how many years it takes to double your principle.
“At 12 percent, we can double our investments every six years,” I explained. That means if we started with $100,000 – that’s a hypothetical number, mind you, for quick calculations – it would grow to $800,000 by the time our soon-to-be-born second daughter goes to college. The nest egg would have the chance to double itself three times over.
The trick in compounding interest – that exponential growth they say Einstein once called the eighth wonder of the world – is that it requires you to keep all the money in. The large numbers come later, and the magic stops if you pull cash out before the interest rate gets to work on top of those large numbers.
It’s an exercise in delayed gratification, a skill we’re supposed to value. The virtue celebrated in Walter Mischel’s famous marshmallow experiment.(2) But with the Rule of 72, it quickly turns to mental hoarding. Just six more years of earning and that $800,000 gets you into millionaire territory. Delay another six years and you get the “multi” designation. And another six years, and another, and…
The never-enough glitch takes over. There’s always another goal just six years further down the line.
“You see that house built right against the sand dunes?” I pointed for Kate to take in the multi-million dollar beachfront mansion. “That could easily be ours if we continue living simply and investing for growth. Hell, we could tear it down and build a bigger one.”
Or we could delay gratification even longer.
Maslow On My Mind
Abe Maslow pops back into my awareness every few years. His hierarchy of needs held my imagination captive in high school. He fluttered in and out of my many college psychology courses, but his theory was always subsumed by a fixation on those things that break in the human brain, those many neuroses, psychoses and other DSM-defined abnormalities.
I’ve been quick to dismiss Maslow in our few encounters outside of school. To my uber-practical, uber-rational mind his ideas have just seemed unserious and therefore unworthy of my serious attention. There’s no place for transcendence in the practical world, I thought. That’s for the mystics and nirvana-seekers; the new-agists and their touchy-feeliness. Not for the serious-minded like me. So I kept Maslow at bay.
But he’s back, and my imagination is captive again. Maybe there’s something to this pyramid of needs where you must satisfy those basic requirements of food, shelter and safety before you’re free to take care of emotional needs. And you must address those emotional needs before focusing energy on transcending yourself and contributing something to the benefit of others.
For some reason the ideas resonate again.
This concept of having enough, what is it if not satisfying those needs at the base of Maslow’s pyramid? When Joe Heller told his friend Kurt Vonnegut that he had no envy for their billionaire host with a mansion on Shelter Island, I imagine Heller’s “knowledge that I’ve got enough” (3) as a wink to Abe Maslow, a recognition that the bottom layers of his pyramid are filled. That he’s free to channel his energy into works of literature that feed the minds of readers even if it only makes him a little money.
Heller has transcended that need for ever more money. A little can be enough. There’s that word: transcendent. It sort of makes sense now. At least I can write it without blushing.
Maslow told us that few ever get to the promised land of transcendence, that peak of his pyramid. Most of us will be forever bogged down in the layers below, struggling to satisfy our more basic needs.
Perhaps Rockefeller neared his own peak toward the end of his life as he became philanthropist ne plus ultra. But prior to that, before he faced the abyss of mortality, he was compelled to keep pouring more into the base of his pyramid. He was caught in the never-enough glitch. The more money he put into the care of his security needs, the wider his base grew, the more he needed to pour to keep filling it. An irrational sense of scarcity. A vicious cycle of hoarding.
His base grew ever-wider but hardly taller. Despite the philanthropy, I suspect he never had the sense of enough.
But Joe Heller needed much less. He built a pyramid with a tall peak on a much smaller base.
So, too, with Martin Eakes and his $60,000 salary. He didn’t need a mansion on Shelter Island or just a bit more money (always a little more). His sense of enough has allowed him to transcend, investing his energy into something that would benefit so many others because his own needs were modest and easy enough to satisfy. He could build Self-Help Credit Union into a force for building a healthier, sustainable community in which even the working poor could participate.
I admire Martin Eakes and Joe Heller. I appreciate what they’ve been able to accomplish by cultivating a sense of enough. But as I consider my own basic needs, I lean toward that sense that I must have just a little more – always a little more – to feel secure in a world of scarce resources; a little more to provide for my wife and two daughters in case something (anything!) goes wrong. Let me collect just a bit more, fill the base of my pyramid for another year (or maybe two), and then I’ll have enough. Then I can try to move toward its peak.
The never-enough glitch is at work in me, too.
Writing the Check at Self-Help Credit Union
Back to that late-September day. I’m in Durham now chatting with Kristen, my Self-Help adviser, on the ground floor of the credit union’s headquarters. We’re sitting on well-used furniture in a cramped office made to feel even smaller by stack after stack of boxes lining the walls. I’m writing that check, moving those funds from the for-profit bank that holds the bulk of our money and investments. It represents a sliver – that’s all – of the wealth Kate and I have built through several years of frugal living; of delaying gratification. Yet somehow it represents much more.
I am not Martin Eakes. He is cut from a different cloth than I. My needs are much nearer to Rockefeller. I need more security for my family. For me. The majority of our wealth will remain invested in opportunities I expect to compound in value and provide us a more comfortable life than what $60,000 a year would allow a family of four.
I have no qualms with this. I accept it and maybe even embrace it. But I’m vigilant of that never-enough glitch. It can claim its proper space, but I don’t want it metastasizing in me. That drives this Enough Project, a new fear to use as motivation.
With this sliver that is our emergency fund, I can also support the mission of a man for whom I suspect Maslow’s ghost smiles approvingly. Without sacrificing my needs for security, I can dedicate some capital to the benefit of my community by placing it under the guidance of a man who seems to need so much less than I.
No, I am not Martin Eakes. But perhaps I’m not quite as insatiable as Rockefeller. There is plenty of space in between.
This thought fortifies me as I push the signed check across the desk to Kristen. It’s a small beginning for the Enough Project, but it’s a beginning that suits my needs right now.
I started exploring the Enough Project in September 2013. My first essay about it featured Zingerman’s Community of Businesses in Ann Arbor, Michigan. You can read that here: http://www.pauldryden.co/the-enough-project-and-zingermans/
You can find out more about Self-Help Credit Union here: https://www.self-help.org/.
(1) Here’s the News & Observer article that features Martin:
(2) Former New Yorker writer Jonah Lehrer popularized this Mischel’s social pyschology research with this piece in 2009: http://www.newyorker.com/reporting/2009/05/18/090518fa_fact_lehrer
(3) This refers to a poem Kurt Vonnegut wrote about Joe Heller after his death. It appeared in the New Yorker magazine. I wrote about it here: http://www.pauldryden.co/beingcontent/