“Economics is the study of the allocation of scarce goods and services. What could be scarcer or more precious than love? It is rare, hard to come by and often fragile.” With these words economic writer Ben Stein introduces some guidelines for what he calls “the economics of love,” combining financial savviness with wisdom about love. ( “Lessons in Love, by Way of Economics,” The New York Times, 13 Jul 08)
1. “In general, and with rare exceptions, the returns in love situations are roughly proportional to the amount of time and devotion invested. The amount of love you get from an investment in love is correlated, if only roughly, to the amount of yourself you invest in the relationship.”
“If you invest caring, patience and unselfishness, you get those things back. (This assumes, of course, that you are having a relationship with someone who loves you, and not a one-sided love affair with someone who isn’t interested.)”
2. “High-quality bonds consistently yield more return than junk, and so it is with high-quality love. As for the returns on bonds, I know that my comment will come as a surprise to people who have been brainwashed into thinking that junk bonds are free money. They aren’t.”
“In love, the data is even clearer. Stay with high-quality human beings. And once you find that you are in a junk relationship, sell immediately. Junk situations can look appealing and seductive, but junk is junk."
“(Or, as I like to tell college students, the absolutely surest way to ruin you life is to have a relationship with someone with many serious problems, and to think that you can change this person.)”
3. “Research pays off. The most appealing and seductive (that word again) exterior can hide the most danger and chance of loss. For most of us, diversification in love, at least beyond a very small number, is impossible, so it’s necessary to do a lot of research on the choice you make. It is a rare man or woman who can resist the outward and the surface. But exteriors can hide far too much.”
4. “In every long-term romantic situation, returns are greater when there is a monopoly. If you have to share your love with others, if you have to compete even after a brief while with others, forget the whole thing. You want to have monopoly bonds with your long-term lover.”
5. “The returns on your investment should at least equal the cost of the investment. If you are getting less back than you put in over a considerable period of time, back off.”
6. “Long-term investment pays off. The impatient day player will fare poorly without inside information or market-controlling power. He or she will have a few good days but years of agony in the world of love.”
7. “Realistic expectations are everything. If you have unrealistic expectations, they will rarely be met. If you think that you can go from nowhere to having someone wonderful in love with you, you are probably wrong.”
“You need expectations that match reality before you can make some progress. There may be exceptions, but they are rare.”
8. “When you have a winner, stick with your winner. Whether in love or in the stock market, winners are to be prized."
Many of us nurture dreams of wealth in both the monetary and romantic realms. In order become real in the waking world, these dreams must be moved beyond the evanescent form of pipe dreams. They need the very real legs of practicality with which to walk into wakaing life. In order to attain such waking- world wealth, we must apply skills, knowledge and work in order to make successful investments of the heart.
