#22: The psychoanalysis of money, or How to screw up your children’s financial worldview

15th February, 2021

Welcome to the Idiot Money newsletter. The newsletter that models for Rorschach tests.

This week: becoming wiser with money by understanding that meaningful stories are written by minds, not by money.

Are you telling your story through money, or is an inherited and imposed money story telling itself through you?

It is a central theme of the book that money, in the way it is relevant to your ability to live a Good Life, is about stories. About narrative, not number. Money is integral and instrumental, not merely incidental, to the story we tell ourselves about ourselves.

This is wonderful, in a way. Because we have tremendous capacity to edit these stories. And because if you’re monetarily unlucky, it needn’t bother you anywhere near as much as you (and the rest of the world) may be prone to believing it should.

In other ways, it’s a disaster. The reason the weeds of our wiring around money are so hard to even acknowledge, let alone do something about, is because so many of them have their roots in our childhoods (and your parents’ childhoods, and so on).

Of vastly greater import than any actual money we may inherit from our parents are their money stories. Not least because we inherit them at a time when we have zero capacity to challenge them, and zero money to prove that they are probably bollocks. This can set us up for some pretty tragic life choices when we do.

Get these worldview-shaping stories right, and the money doesn’t really matter. Get them wrong, and before you know it, nothing else matters as much, and you end up with the mind, if not the means, of a member of the Bullingdon Club.

As psychoanalyst Stephen Grosz explains in The Examined Life:

Our childhoods leave in us stories like this – stories we never found a way to voice, because no one helped us to find the words. When we cannot find a way of telling our story, our story tells us – we dream these stories, we develop symptoms, or we find ourselves acting in ways we don't understand.

Despite dozens of client conversations, covering many millions of pounds’ worth of transactions, I was continually surprised by how many money actions were taken that, when put on the spot with innocent questions, the actor didn’t understand. And while mouths may loudly deny such a deep-rooted connection between searching for meaning and searching for money, actions while they don’t speak more loudly, do speak more honestly.

I’ve known people excitedly dive into the details of tax-mitigation strategies for hours, only for them to abandon them in a second when asked if such action were a fair reflection of who they wanted to be. I’ve known people on the brink of trading in months of hard-earned opportunity, and stressful weeks of research for a purchase, only for it to be kiboshed when asked if it were likely to ‘work’, i.e. make their life sustainably better. Or ‘did it work last time?’ Or ‘did it work for the million other people that tried it before you?’

Plenty has been written about the dangers of praising children for outcomes over inputs, because it ties senses of worth to achievements over existence, and forces everyone to live in a world where ‘success’ is valued more than competence.

As Grosz continues (echoing the story from Idiot Money #4):

Being present builds a child's confidence because it lets the child know that she is worth thinking about. Without this, a child might come to believe that her activity is just a means to gain praise, rather than an end in itself. How can we expect a child to be attentive, if we've not been attentive to her?

Less is written about how the same story plays out with money. Praise expensive things and your sense of worth becomes unhelpfully – and self-deceptively – material. The child’s inevitable aiming for praise becomes the adult’s inevitable aiming for money.

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The duty of our parents is to define the universe of the possible. To define the worlds in which whatever story we decide to tell with our life is told. The children of a parent who started their own business will think this more of a possibility than the children of a lifelong employee of a single firm. The children of a professional athlete will know that their parent is less a superhuman and more a person that didn’t shirk from the challenges of their practice.

We are all highly susceptible to the limitations of our parents’ views of the possible. So susceptible, that we remain in a psychological sense, children. Especially, I think, when it comes to that most interwoven of aspects of our lives – money. This is a huge problem. Because children are idiots.

‘The source of neurosis in the young is, as a rule,’ wrote Jung, ‘the collision between the forces of reality and an inadequate, infantile attitude.’ And ‘Mankind in respect to the most essential things, is psychologically in a state of childhood […] The great majority of people need authority, guidance, and laws.’

This is part of why despite ‘not having to think about money’ being the reason a lot of people get rich, getting rich doesn’t stop those people thinking about money. It’s also why, as I wrote last week, there’s a depressing tendency among those that have the opportunity to wait for a personally fulfilling and fitting job to take work primarily for the money anyway. Come from a place where money meant meaning, and you’ll head off that way in search of it too.

Many, mistakenly seeing money as a path to a meaningful life, also see it as a tangible sign of ‘freedom’. Yet money has no inherent meaning, and, to quote Jung again, ‘It is only the meaningful that sets us free […] The least of things with a meaning is worth more in life than the greatest of things without it.’

Yet meaningful stories are written by minds, not by money.