What is the "Right" Amount of Wealth?

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

A few weeks ago we talked about Dave's Ramsey's new house. Summary: it's huge and expensive.

As a money manager, I have no problem with someone saving their money, managing it wisely, and spending it as they like (responsibly, of course.) It appears that Dave has done this since he has no mortgage on the place -- so he must have paid cash for it.

But from a Christian perspective, the issue isn't that clear. The Bible talks a lot about guarding yourself against the lure of riches and also advises that we help those who are needy. When someone (like Dave in this case) seems to go over-the-top, it appears that he may have succumbed to the lure of wealth -- not to mention what he could have done with some of the money to help others (why not "settle" for a $1 million home and use the rest to feed the poor or something similar)?

But this argument leads to a slippery slope. If Dave is "wrong" in spending so much because he could have helped others, what about you and me? Do we need to live in homes that are as nice as the ones we live in? Do we need as good (or as new or as many) cars as we have? Do we need to save as much as we do? Do we need big screen TVs, four computers per home, cell phones, expensive vacations, and the like? Do we ever need to eat out, go to concerts, or play sports? Imagine the money we could save and use to help others if we really had their best interests at heart.

On the other hand, Solomon was (one of) the wealthiest person to ever live. And even Jesus had his financial supporters -- people who had to have had money to do so. And what about "those who sow generously will also reap generously"? Is it even possible to give away all you have considering that verse (won't you simply get it all back -- plus some)?

The basic issue seems to boil down to the question of how much wealth should each of us accumulate for our personal use versus use to help those who are needier. I'm interested in hearing your take on this subject.

Comments

[Russ]

In regard to Dave Ramsey, who is to say he doesn't give a lot of money to help the poor? We can't look in his checkbook to see what he gives, or dosen't. If he aquired his riches honestly then they are his to do with as he likes. As Christians, we are admonished throughout Scripture to help those in need; how we do that should be determined by our submission to the Holy Spirit and His leading. Capitalism, In my opinon, is the Biblical mandate to enjoy the fruit of one's labor, having enough not only for one's self and family, but also to share with those in need.

[KH]

Probably nobody would listen to Ramsey if he didn't have quite a bit "visible wealth".

Many in his target audience aren't very sophisticated. They're unlikely to pay attention to a guy living modestly a ranch house in the suburbs.

[Beth]

@Russ Capitalism is a Biblical mandate? How do you figure? I think you may need to check the definition. Capitalism didn't exist in Biblical times.

I think this is an interesting post considering that it's Christmas season. Most of the stuff we give or get as gifts are things we don't need, yet donation to charities are down this year. Tell me what's Christian about that.

[Mary Kate]

What about the wealth that is spread when people spend money - carpenters, electricians, plumbers, etc. used to build Dave's house. In that case don't we help those that help themseleves?

I think we should give to those that cannot help themselves, but sometimes spending money helps others.

[Jen]

There are different kinds of gifts, but the same Spirit distributes them. - 1 Corinthians 12:4. It may be that through his house, Dave will draw the attention of people who have never heard his message, who need to hear it. I remember reading about someone asking Mother Theresa about how she raised enough money to continue her mission. She answered, "I don't think about it. It always comes; the Lord sends it." Two different ways of approaching money, but both using the gifts God has given them to help people.

[Everyday Tips]

Sometimes I am overwhelmed with how much other people seem to need. I am happy to help someone that is working hard and such. However, I have a much harder time helping out those that are taking advantage of the system, or at least appear to be. Children should always be helped as they are victims (or benefactors) of circumstance.

My spending priority is on my children. Not toys, but healthy food, books, that kind of thing. I want to make sure they are taken care of mentally, emotionally, and physically to the best of my ability. I also want to make sure I save enough to not be a burden on anyone when I am older. As long as those things are taken care of, along with some things I enjoy like vacation, I don't really care how much money I have. Sure, I would love a ton of money, but I would make it my full time job to distribute scholarships and try and help people rise out of poverty.

[TMS]

I'm pretty sure capitalism existed from the beginning. It comes naturally to people - working, buying and selling and giving freely with others.

Socialism and communism came along much later and are purely man-made institutions.

[KH]

I agree with Everyday Tips--taking care of my children and my own family including myself, is my first resposibility. After that my extended family, my students, my local community, my country, the world.

I'm amused by "TMS"'s historical ignorance--"socialism" is nothing more than taking care of your own.

Families and communities have always contributed and pitched in to take care of widows and orphans, the elderly, even those who make poor choices (alcoholics etc). It's been a feature of the United States from the very beginning.

I wouldn't want to live in a society where only the wealthy could afford schooling, homes, and the poor, sick, or old die from illness and want while others in the same society hoard their excess.

[Beth]

@ TMS True, the acts of working, trading, selling and giving have been around since ancient times, but capitalism is still a relatively young concept -- it didn't get off the ground until the demise of the feudalist system after the 16th century.

If I'm not mistaken, "capitalism" has to do with ownership of the means of production, not the "natural" acts you describe above. I don't recall seeing in the Bible that it's necessary to have an economy where the means of production are privately owned. Besides, most countries aren't strictly capitalist -- they are mixed. Otherwise, the government wouldn't be subsidizing industries or bailing out companies.

[TMS]

Socialism:
a political theory advocating state ownership of industry
an economic system based on state ownership of capital

Abraham owned the means of his production - his flocks, servants, etc.

[Beth]

@ TMS -- yes, but Abraham didn't live in a society with a democratic government, globalization, a stock market and industrialization. To say Abraham owned flocks and slaves doesn't really tell us much because the socio-economic context is completely different.

But we're getting off-topic here.

[Infinite Banking]

It doesn't matter what Dave Ramsey does or doesn't do. What matters is if the concept itself is true. CS Lewis talks about this same thing in Mere Christianity where he says basically you should give everything except what you can't afford to give. Meaning it should hurt. Now whether that is something you live by or not, it does bring up an interesting thought, how much should you give? But it's a personal answer, and sometimes business owners are better off giving jobs than money, handouts often hurt.

[StL Pastor]

If socialism is about the state ownership of capital, I think you have to say it existed from the beginning of civilization, since Kings nominally owned entire countries, and were in charge of 'industrial' development such as it was (building storehouses, organizing roads, etc.) The 'mixed' economy of both state and private actors working together has been the norm for all of human history (usually, of course, to the benefit of elites).

On giving, I think it is very much a sliver in your eye, log in mine situation. Rather than trying to figure out what is 'right' objectively in terms of wealth what I often suggest is to consider what 'enough' might look like in your life, both in terms of savings and income, and think about whether you would be willing to give away the income above that level (kind of like how FMF gives away everything from this blog), rather than trying to judge others choices.

Although, I think it is worth pointing out that Mother Teresa had enough because she spent almost nothing, and lived in a single simple room, and Ramsey gets to live in a 10 million dollar house, and I do think there is an ethical difference.

[Scott]

On the Ramsey thing... As with most things there are usually two extremes that are easy to label as too little, too weak, clearly not good enough, or whatever and then too much, too strong, clearly good enough, etc. Then there is that area in the middle where this is always subject to debate...the on the bubble stuff, the gray area. If Dave's house was in that middle zone...$800,000, $1 million, $1.5 million (a TON of house in Tennessee!)...then it would be debatable.

The value of Dave's house, in my opinion, puts it clearly and safely in the too much or excessive category. I have a hard time believing that God blessed him with the money he has so that he could put it into a castle like that. It's fine to have nice things and to live well. But when you go this far, I think you've crossed a line and have put yourself subject to seeing God remove his hand of blessing from your life.

The "right amount" of wealth is different for everyone, but some cases are no-brainers. This seems to one of them. It just adds to my belief that Dave is about helping people be financially successful (which is fine and good) too often under the guise of "biblical stewardship" when it helps his marketing. Just my thoughts.

[BD]

Knowing Dave Ramsey though, he probably bought the house as an investment and plans on reselling it later for millions more than what he bought it for. And then, what if he gives a lot of that away? We really can't judge him...he might be using his 5 talents to make 5 MORE talents or something along those lines.

As for how much wealth is just right.... I have no clue. I have very little...no home of my own, no vehicle, no TV, no steady income of money. But just by living in the USA one might argue that I have a lot more than most people in the world. But then again, the world has different standards of wealth. By some tribes in Papua New Guinea, I'm ultra-poor and have no social status. I have NO pigs, NO yams (much less BIG yams) and NO wives. A regular pauper! It's all so relative.

I know I'd be a lot less stressed and feel a lot "happier" if I was self-sufficient. I'd like a good job that pays enough income to be able to feed and house myself without having to rely on the income and charity of others, I'd like to own a vehicle, to be able to pay all my bills comfortably, to be able to give to others when they need it, and to be able to take a vacation once in a while. Just a nice comfortable middle class. It just seems like a pipe dream at this point.

[Smokin' Joe]

I don't think anyone has the right to tell somebody how much money/wealth they should have or share. Each person has their own opinion and if its their money, they can do with it as they please. I don't think there is a number that is appropriate. A more appropriate topic IMO, would be how much money does the US govt need. Do they have a revenue problem or a spending problem? The govt always talks about taxes but avoids getting into spending.

[cet413]

what about "Thou shall not judge" (Dave's house)?

[Mark B.]

@cet413 - you nailed it. If Ramsey has a deep belief in God, and he has bought "too much" house, then his heart will feel the emptiness that material goods ultimately bring.

[Brian]

From a Christian point of view, we are stewards of the resources God has given us. This includes finances, the planet, our families, etc. As stewards, we should realize that nothing we have is our own. We are only guarding it for God's purposes and are to dispense it when He directs us too. By thinking it is "ours", we are blatantly removing ourselves from a Biblical mindset and mandate. Our giving is supposed to be sacrificial not just what we "feel" like.

In regards to the capitalism argument, we when look at the early church model in Acts, we see what actually is much closer to socialism and communism than capitalism with church members selling off their possessions so those in the body of Christ would have no needs unmet.

[Catherine]

Mary Kate's got the right idea.

Dave Ramsey had his house built. In the middle of a recession, dozens, perhaps hundreds, of people were kept employed in various trades.

It's way too much house for my tastes, but construction of that home kept a few dozen families fed, clothed and sheltered for the year or two it took to build.

[Anonymous]

Catherine, please. Dave Ramsey did not build this house to spur the local economy or to keep families afloat, he did it to bathe his ego in 13000 sq ft of space that acts as a mirror to tell him how great he is. If he wanted to do so, there are far more effective ways to support families.

Look below:

http://www.ers.usda.gov/data/unemployment/RDList2.asp?ST=TN

For the amount of money Dave Ramsey spent to build this house, he could have built a far more modest house for a cool $300k and deployed the other 9.7 million to keep 222 median income TN households ($43,610 per year) afloat, or more powerfully, he could have implemented the Millennium Village Project (which seeks to move African villages from subsistence agriculture to local commercial economies in 5 years' time) at a cost of $300,000 per year for 5 years-- for five African villages (population 25,000 people) and still had $2.5 million left over to build the manse of his dreams.

http://www.unmillenniumproject.org/mv/mv_cost.htm

Now if Dave Ramsey has given more than this amount in charity this year, does it make a difference? Certainly it makes some. But this house is still an exercise in excess. When your electricity bill is bigger than the mortgage payments of probably half of American homeowners, something is amiss.

[BD]

Hey, Anonymous! Obviously, you're psychic if you can tell us all EXACTLY why Dave Ramsey did what he did.

Why not put that Psychic Power to good use and tell us all the winning lottery numbers? :P

[Anonymous]

BD-

Sorry, diagnosing edifice complexes using real estate is a lot easier than the lottery, but try these, no promises made about their quality:

13 17 18 29 42 Powerball 34

But the core question here is not my supernatural abilities and whether they do or do not exist, but whether or not a man and a woman whose grown children (two, I believe, I have heard his show before) live outside the home *NEED* 13,000 square feet of living space? Can you make that case on a square foot basis? I'd love to hear it.

Put another way, have you seen the pictures of Warren Buffett's house? Let's compare it to Ramsey's and see what that might tell us about excess.

[Chris]

There is no "right" amount.

There's you and your choice for how much is enough for you... and then there are other people, whom must make their own decisions - which we shouldn't judge (per Jesus).

[Valerie]

Well, obviously there's no "right" amount. And the commandment to "sell everything" was given to a specific person in the Bible, not more generally.

However, I have trouble squaring "love others" and "love God" (the two greatest commandments) with owning a gargantuan home. Jesus' parables and commandments are filled with giving and sharing, not with earning more money. Sure, Jesus had some wealthy backers... but there's not a great deal about them. Should we follow the lead of some of Jesus' wealthy backers mentioned a few times? Or follow the lead of Jesus himself, who lived on very little?

Yes, I agree that spending money can spur the economy. But the same spurring of jobs and sales would happen if he built a multimillion dollar homeless shelter, community center, or school. There's no reason he has to build/purchase things for HIMSELF to spur the economy.

I am very wary of Christians who keep much wealth to themselves. It's not judgment, but wariness for sure about what they preach and who I want to be influenced by. I have no interest in being a super wealthy, wealth-flaunting person, so I would choose to spend my time and attention on those who I know are also humble and giving.

[BD]

Anonymous: I'm thinking that maybe he bought it as an investment. Not so much as something to live in (although he'll do that in the meantime) but more as something that he could get a ton of cash from later by selling it when the economy gets better. Like someone else mentioned, it'd be the same as investing money in Stocks. Real Estate is just another investment. I'd be highly surprised if he stayed in the house for any real length of time. (And if he does stay in the house for years past the economy getting better, then you can say my argument does NOT hold any water, and I'll totally concede.)

And BTW, thanks for the numbers! I never buy lottery tickets (since the money is better off being saved or invested), but I'm highly tempted to just try your numbers on a $1 ticket, just once. :)
If I win anything substantial, you'll definitely get some.