Your Money_ The Missing Manual - J. D. Roth [158]
Social Capital
You create social capital—mutual goodwill—when you volunteer at a soup kitchen, help your neighbor move a piano, have your Sunday School class over for a barbeque, or join a softball league. Any time you participate in your community, you're generating social capital, both for yourself and the other people involved. People with lots of social capital can find help when they need it; those with little social capital can spend a lot of time frustrated and alone.
The classic Christmas film It's a Wonderful Life is a great illustration of social capital. Jimmy Stewart plays George Bailey, a man who repeatedly foregoes his own interests to help his friends and neighbors. It costs him—financially and mentally. When disaster strikes, Bailey decides he's worth more dead than alive, and plans to commit suicide so that the proceeds from his life-insurance policy can set things right.
In the end, Bailey is saved when all the folks he's made sacrifices for over the years come to his aid. Sure, it's a schmaltzy, feel-good moment, but it's a fine example of social capital in action. When Bailey's brother declares that George is "the richest man in town," he's not joking: Bailey may not have much financial capital, but he's flush with social capital.
You don't have to sacrifice your own interests to create social capital. You can often create win-win situations where everyone profits. But the best way to build social capital is to help others without expecting anything in return.
There's more to wealth than just money. Social capital is just as real as financial capital—and often more valuable.
Note
For an in-depth look at social capital, pick up a copy of Bowling Alone (Simon & Schuster, 2001) by Robert Putnam.
True Wealth
It's easy to believe that having more money is the key to a better life—but it's not. The key to a better life is increased happiness.
Wealth and happiness aren't mutually exclusive, of course. In his final column for the Wall Street Journal (http://tinyurl.com/wsj-final), Jonathan Clements wrote that financial stability improves well-being in three ways:
If you have money, you don't have to worry about it. By living below your means, you get a degree of financial control—even if you aren't rich. Avoiding debt gives you options.
Money can give you the freedom to pursue your passions. What do you want out of life? What gives you a sense of purpose? These are the sorts of things you'll want to pursue in retirement. Better yet, structure your career so you can do the things you love now.
Money can buy you time with family and friends. In fact, Clements says, true wealth comes from relationships, not from dollars and cents. In other words, social capital is worth more than financial capital.
Money is a tool. As with any tool, a skilled craftsman can use it to build something amazing: a meaningful life filled with family and friends. But if you're not careful and don't have a plan, the life you construct with your money can be fragile—even dangerous.
Really, there's only one way to ever be satisfied with the money you have: knowing how much is Enough (see How Much Is Enough?). True happiness comes when you learn to be content with what you have. If you never take the time to figure out what Enough means to you, you'll always be unhappy with your financial situation.
Enough is different for each of us. It's not just different amounts of money, but different types of wealth. For me, Enough is having my home paid off and cash set aside to let me buy comic books and go out to dinner with my wife once in a while. For you, Enough may mean renting a small apartment but owning a