How to Become Wealthy with a Good Heart?

Problem with money

One of the craziest things about Finnish culture is that, according to some surveys, Finns consider lottery to be a more ethical or likely path to wealth than investing. Unfortunately, such perspectives show the sad reality that a large number of Finns do not understand how to accumulate wealth – or about statistics for that matter.

At this point, it is worth asking why the majority of Finns have such an erroneous view of money and prosperity. There are probably many reasons. One reason is probably Finlandisation (Ger. Finlandizierung) that is the influence of Soviet politics (read communism) in Finland after World War II especially in the 60s and 70s. At that time, some Finns even consider entrepreneurship to be a (semi-)criminal activity – let alone investing.

Another reason for finnish misunderstanding regarding the accumulation of wealth is probably that schools, in particular, have not taught or placed enough emphasis on how to accumulate one's own wealth with a reasonable income. Here, too, ignorance is probably the biggest problem.

Fortunately, however, the situation is gradually changing. Investing is increasingly becoming part of everyday life in Finland – especially younger generations seem to be more keen on investing than e.g. lottery. This is an excellent thing for many reasons.

First of alla, investing is more ethical than gambling. After all, playing the lottery is a gamble and gambling is not harmless "fun" for everyone.

Some people are addicted to various forms of gambling and excitement related to it or are desperately trying to fix their own finances with it. Unfortunately, I have also heard stories where a person's gambling problem has also brought the family to ruin.

However, I do not want to moralize those who e.g. play the lottery – especially those who are looking for a way out of a desperate situation. My point is that gambling is not a good strategy for accumulating wealth. On the contrary, it often exacerbates people's problems.

If you look at the ethics of investing instead, it is difficult to find anything wrong with it, especially when done ethically. After all, investing has many benefits for the individual and society:

• In investing, it is very likely that the return on capital obtained wisely will provide society with tax revenue, which can also be used to take care of the weakest.
• Investing in environmentally friendly technology can help prevent the destruction of nature and climate change.
• Through investing, the average citizen gradually learns how the world and finance work.
• The (wise) investor is not an usual customer in social services. Investing teaches a person to save and accumulate wealth instead of living beyond means.
• In short, investing is the path to prosperity, the lottery is the way to poverty.

No Brainer Probabilities

In order to understand the difference between gampling and informed investing, it is also useful to look more into probabilities. First of all, the chance of winning the lottery jackpot is one in millions. Instead, if you diversify your investment in reasonably costly index funds over time (e.g. monthly savings), industry and geography, you will almost certainly get at least some amount of money comparable to winning the lottery with long-term savings.

A good practical example of this is the fictional character Matti. If he spends €25 a week playing the lottery, he is unlikely to win the jackpot or anything bigger, even for 50 years with a weekly bet. Instead, he will most certainly lose around €60,000 over that 50 years, unless you include some small wins. In any case, over a long period of time, Matti will have an estimated at least 99% chance of losing tens of thousands.

If, on the other hand, Matt were to embark investing on the aforementioned index funds, he would probably make an annual profit of at least 7% over 50 years. With that €25 a week, he would almost certainly get a fortune of around €506,000.

In other words, by playing the lottery, losing ten tons would be almost certain, while investing in index funds would very likely make him close to half a million. Based on the above, it should be clear which option is the more sensible path to prosperity. Unfortunately, this is not the case – at least in the minds of many Finns.

Can money become too important?

Finally, one may ask whether money can become too important and how investing and accumulating wealth fits into Christian beliefs, for example. It has to be said that there are many different kinds of us Christians and different views.

Personally, I am aware of the danger that, at worst, property can become an idol for a person. In that situation, money becomes the supreme value, riding roughshod over a deep relationship with God, neighbors and important people, as well as moral life, among other things.

The most tragic thing about this attitude is that, at the end of the day, money does not even bring real happiness. It becomes only cold material that can bring momentary pleasure, but in the end always leaves an empty hole in the soul. So money is a good servant, but a bad master.

It is worth noting that in the Bible, prosperity can also be a blessing from God. For example, King Solomon received wealth from God as a gift, but precisely because he did not ask for it. You see, Solomon asked God for an understanding heart so that he could be a good ruler. In addition to fulfilling this request, God also gave Solomon an additional gift of wealth. In this case, wealth was precisely the servant who belonged to a good master.

Ps. The perspectives presented here on investing are not really investment advice, but illustrative examples of how investing works.