I don’t waste a lot of time feeling guilty about things, but it wouldn’t be too hard to feel guilty about succeeding financially because others make poor financial decisions. Let me explain.
I have saved my money and have put some of it into bank stocks. Many people get second jobs to pay the interest on their credit card balances, and some of these interest payments flow back to me in the form of bank stock dividends. Similarly, the value of my shares in retail stocks goes up because other people shop compulsively.
We have all heard the sound financial advice to save some of your income and invest in stocks for the long term to get rich slowly. Once you have enough money, you can stop working if you like. But this advice only works because most people don’t follow it. If everyone saved and invested for 20 years, we couldn’t all quit working. There aren’t enough young people to do the jobs that keep our society functioning.
If we all saved and invested, stock market returns would have to drop, and the advice on how to get rich wouldn’t work very well any longer. My investment success depends on other people handling their money poorly.
Would we all be better off in the long run if everyone handled their money better? I’m convinced that those who handle their money well now would be worse off for a while if the poor money handlers suddenly wised up. But in the very long term, would greater efficiency cause everyone to benefit?
Of course, this is an academic question because it is extremely unlikely that everyone will suddenly smarten up financially. I’m not even sure who I would trust to answer this question accurately – maybe Warren Buffett, Chairman of Berkshire Hathaway and considered by many to be the greatest investor of our time. I suppose the chances are slim that he would find this question interesting enough to answer, and even slimmer that one could get his attention to ask the question.
If you have credit card debt, do your best to pay it off, even if it hurts me financially.