9th August, 2021
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Welcome to the Idiot Money newsletter. The newsletter that’s at war with waste.
This week: becoming wiser with money by understanding that choosing to make money the exception to the rule that it’s better to get the same output for less input is a pretty dumb way to live.
Living well and living expensively are not the same thing. If you spot yourself bragging about the latter to try to impress upon people the former, it’s a sign that something needs to change.
We measure living well differently to doing anything else well. Why?
In every other walk of life, doing something well is signalled by putting in less effort for no shortfall in the quality of output – doing something more quickly, more neatly, more efficiently, or more elegantly.
Yet when it comes to living a Good Life (which is the only thing we should ultimately care about), we act as if achieving it for £10,000 per month is better than doing it for a tenth of that.
‘Sorry, did you say £10,000 a year for jewellery?’
‘No, a month.’
‘Oh.’
At first, they cared only about the swirly writing on SJP’s marketing material and how it spoke to their aspirant insecurities. Later, they came to care about the detail.
However, they didn’t care about the details because they were worried how much money they’d spunked on slick sales patter.
They didn’t want to know the sums. They just wanted them to be wrong.
Heck, if you’d offered them a chance to pay more to magically make them wrong, they’d probably have taken it. If you think St James’s Place advisers are good at selling their shit, you should hear the defences of the people they’ve sold that shit to.
There are few things more frustrating than seeing people sacrifice better future decisions for want of admitting the imperfections of their past ones. In financial planning, this frustration is monumental, because a core part of the job (when done well) is turning the very thing a client is bragging about into the object of challenge.
No harm, right? After all, if someone were genuinely proud of something, they'd welcome the challenge... wouldn't they? ;)
If Lord and Lady Jewellery Addictions’ defence of the exploitative ways of their erstwhile advisers was one thing, their defence of their own spending habits was quite another.
Apparently being ennobled doesn’t come with the realisation that you don’t tend to get defensive about stuff you’re secure about, and that therefore attempts to promote an identity rather than let it emerge are always an instant, affectatious, and frankly ignoble backfire.
The oddest part of Lord and Lady Jewellery Addiction’s jewellery addiction wasn’t the quantum. It was the pride in that quantum.
‘I spend £4,000 per month.’
‘On what?’
‘Oh, I don’t know, really. I like nice clothes. And I like to go out and have a good time. I don’t even really drink myself. It’s mostly for other people.’
‘Is it?’
‘Is it what?’
‘A good time?’
Yet underneath, there it was again. The pride. The need to impress and the blindness to the truth that the harder you try to be impressive, the less you are. We show-off only our insecurities.
There was – inevitably – a whole history behind the fears. The fear of being seen as ‘cheap’ by his peers. Or not good enough by himself. Or an inefficient converter of gifted resources into something ‘worthwhile’ by his parents (with ‘worth’ strictly limited to the sort of stuff that could be certificated and stuck on a fridge).
I was lucky enough to have a longer and more meaningful chat with Teenage Ozymandias than I ever did with Lord and Lady Jewellery Addiction.
He wasn’t an idiot.
When I questioned how he’d react were the costs and benefits of his proudly quantified lifestyle a case study in a business-school textbook, he not only got the point before I’d finished making it, but welcomed it too.
‘Man, if my life were a business, and I the CEO, I’d fire myself.’
‘My average monthly cocktail-bar cost is higher than my rent was when I moved to London a couple of years ago,’ bragged 25-year-old me.
‘Oh, I’m pretty sure I’ve spent more in restaurants and bars than rent since the second I started working,’ responded one of 25-year-old me’s equally unenlightened colleagues.
‘It’s okay when you’re aware of the numbers, though, right?’
I may even have claimed to have ‘expensive tastes’, just to ensure I sounded like a total twat.
I’m an idiot in many ways. 25-year-old me was an idiot in even more.
However I liked to dress it up then – paying for objective quality, aligning my expenditure with what I cared about (it wasn’t the drinks, it was what they expressed!) – it’s an inescapable and embarrassing fact that by bragging about the ‘average monthly cocktail-bar cost’ I wanted to impress people with numbers.
Naturally, I didn’t consider it bragging. Using the numbers was simply making an objective point! Given I had the evidence, it would’ve been weird not to share it to support the conversation!
Tracking, however, is not the same as seeing.
It doesn’t even really matter what those numbers were spent on. I was choosing to construct a world where they were the measure of something that the subtext claimed had meaning, yet in reality it was a total myth.
Tracking is necessary for trade-offs, but if your vision is shot, it can mask insights as much as highlight them. The point of examining your life is to get to a place where you are no longer examining, but living an examined life.
Sharing Good things makes them better, but sharing silly things just makes them sillier… and you more likely to do silly things in future, by reinforcing the muddiness of your and others’ vision; it may increase connections, but it decreases the quality of them.
I suppose there may be people out there that are genuinely impressed by Veblen lifestyles (those built around goods whose expense is counterintuitively a cause of their demand) and hear numbers-based bragging as a cry of triumph rather than a cry for help. But I’m not sure choosing to try to impress such people is ever wise.
‘What does it matter?’ the likes of Lord and Lady Jewellery Addiction would ask, when challenged on their spending decisions. ‘We can certainly afford it,’ they’d probably puff out under noses trying to sniff the moon.
Well quite, what do they matter?
Life in financial advice is one long story of people feeling good when they’ve done Good with their money and Bad (in a gnawing, existential 'bad faith' sense) when they haven’t. And yet mostly failing to connect the dots.
The first I came to know of Lord and Lady Jewellery Addiction (real title, poetically licensed surname) was being asked to do the maths to prove quite how badly they’d been screwed by being suckered into signing up with .
The message was clear: ‘The more I spend on jewellery, the better my life is, and the more you should respect, revere, and quite possibly worship me. How very dare you even ask if it “”? If it didn’t work, why would I keep doing it?’
Being young and South Asian, the only surface-level thing Teenage (aka Crazy Rich Entrepreneur Kid) had in common with Lord Jewellery Addiction was that they both went to business school.
As reliably as poison doesn’t become a ‘’ just because that’s what those with the most poisoned bodies call it, so a shared myth of ‘meaning’ doesn’t become meaningful just because it’s shared.
It is a mark of quality company that the circumstances in which the dance of companionship takes place are .
Allocation is far more important than accumulation. But we so desperately want to believe the accumulation is the aim. So we spend money – we print money, without caring that the printer is hooked up to a paper shredder.
