Finance is not merely about making money. It's about achieving our deep goals and protecting the fruits of our labor. It's about stewardship and, therefore, about achieving the good society.
Interpretation
Finance transcends just profit-making; it encompasses fulfilling our deeper aspirations and ensuring the well-being of society.
In this quote, Robert J. Shiller emphasizes that finance is not solely focused on generating wealth. Instead, it is fundamentally tied to our broader objectives—personal growth, societal responsibility, and the preservation of the benefits of our efforts. Shiller advocates for a view of finance as a stewardship role, where the ultimate goal is to contribute to the betterment of society rather than mere accumulation of riches.
In practice
In a finance seminar discussing the broader impacts of financial planning.
Those on the downside of rising economic inequality generally do not want government policies that look like handouts. They typically do not want the government to make the tax system more progressive, to impose punishing taxes on the rich, in order to give the money to them. Redistribution feels demeaning. It feels like being labeled a failure.
Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
That's the world we live in: when it comes to economics, people have emotions; it's not like chemistry or physics.
Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.
We should not be focusing on quick solutions. The really important concern for policymakers everywhere is to prevent disasters - that is, the outlier events that matter the most.
If we wait until income inequality is much more severe, we will have a whole class of new superrich who will probably feel entitled to their wealth and will have the means to defend their interest. That's already gone far enough. We shouldn't let it become more extreme.
Never pay the slightest attention to what a company president ever says about his stock.
Everyone recognizes that's a joke because obviously the number and shape of the pieces doesn't affect the size of the pizza. And similarly, the stocks, bonds, warrants, etc., issued don't affect the aggregate value of the firm.
Those who don't manage their money will always work for those who do
The propensity to swindle grows parallel with the propensity to speculate during a boom the implosion of an asset price bubble always leads to the discovery of frauds and swindles
A mortgage casts a shadow on the sunniest field.
We make too much out of past performance, and it's very misleading to investors. It causes them to move money around. They buy a fund that's hot and then it turns cold as all hot funds eventually do. And then they get out. Well, buying at the high and selling at the low isn't going to leave you a satisfied shareholder, right?
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