Is a Little Knowledge a Dangerous Thing?

For a long time, I lived more or less in ignorance of all things financial.

Of course that had a lot to do with fear — the world of finance seemed big, opaque, and most of all complex. And therefore it was easier (in the short term, anyway) to simply bury my head in the sand.

Part of the fear, though, had to do with something other than confronting complexity. It was the intuition that money decisions are on some level moral decisions — and so the more I knew, the more culpable I might be.

In time, I came to see that there is such a thing as culpable ignorance, too. I’m using money (and it’s being earned, spent, and invested on my behalf) in the market as it exists.

The morals seem to be at least two: first, what I didn’t (and don’t) know about money can hurt. I’ve foregone a lot of potential earnings by failure to get a clue. Second, non-action does not confer blamelessness. Maintaining an unsophisticated relationship with money and markets wasn’t changing anyone or anything for the better.

From those two insights, I decided first to try to learn something about how money works in general and how my money works in particular, and then to ensure that I was making intentional decisions with the money I control.

I still don’t know much — and much of what I do know is uncomfortable — but I have found it easier to deal with the moral questions of money with a little knowledge and a little more control.