Monday, August 6, 2012

Who wants to not spend like a millionaire?

Here's what the Washington Post had to say yesterday on "the delicate politics of wealth and class":
We want the pony. We want the Jet Ski. We want the big house on the beach, the big account at the bank (Swiss or otherwise), the big car in the garage (especially if that garage comes equipped with a super-cool elevator that lifts the car from one floor to the next.)
Face it, we want what Mitt Romney has — we want to be rich. Americans don’t just want to be rich — when we’re young and looking ahead at our lives, many of us really believe we will become rich. It’s in our national DNA. An American Dreamscape of private jets and bubbly...Wouldn’t you like to be able to casually throw around $10,000 bets, own a couple of Caddies, haul in a few hundred grand to give a few speeches? And would it matter to you whether you made your dough building widgets or buying and selling shares in a widget-manufacturing company, hitting a baseball or collecting an inheritance?
The rest of the article explores the question of why Mitt Romney is taking so much flak for being a clueless rich guy who doesn't understand the problems of the common man, considering that what the common man really wants is to be just like Mitt. It's an interesting point—if you accept the initial premise, which is that what all Americans want, deep down, is immense wealth. And the article does back up this claim to a certain extent, producing poll numbers to prove that over 60 percent of Americans think it's good for the country to have "a class of rich people" and more than half of all young adults believe they will one day be rich (in the face of overwhelming evidence to the contrary).

But for me, those two initial paragraphs just stuck in my throat. Because the simple truth is, I don't want the pony, nor the Jet Ski, nor the big house, big car and elevator in the garage. The idea of "casually throwing around $10,000 bets" and "owning a couple of Caddies" doesn't appeal to me in the least. So either the article is wrong about what Americans want—or else it's me, rather than Mitt, who is completely out of touch with the mainstream culture. An American anomaly. A freak.

Mind you, I'm not trying to suggest that I object in the least to having a nice, healthy balance at the bank. After all, what are all my frugal efforts for, if not to improve my financial condition? I don't even object to the idea of having a big enough amount to my name (say, a round million) to be considered "rich." What bothers me is the assumption that not only I should want to be rich, but the reason I should want to be rich is so that I can own lots of fancy toys (the pony, the Jet Ski, the Caddies, and so on). Indeed, the article seems to be working from the assumption that this is what "being rich" means.

Now, I can think of lots of good reasons for wanting to be rich, but a Jet Ski doesn't appear anywhere on the list. For me, the chief benefit of wealth would be never needing to worry about money. It would mean knowing that we can survive any financial crisis—a job loss, a natural disaster, a major health problem—without losing our home or having to tighten our belts to the breaking point. It would allow us to enjoy our jobs more by turning them into a choice—something we do because we want to, not because we need them to pay the bills. And it would give us the freedom to spend freely on the things that matter to us most, such as making our home beautiful and sustainable, supporting local businesses and organic farms, and donating to charities. Oh, sure, we'd probably buy more treats for ourselves, too—dinners out, concert and theater tickets, maybe even buying new clothes before our old ones have worn out—but I just can't imagine either of us developing a sudden hankering for a pony simply because we could afford one.

In fact, I would say that having this kind of wealth—more commonly known as financial security—generally means not spending a lot on fancy toys. If you want to be able to live entirely off your investments, without having to rely on a salary, there are two ways to do it: build up your nest egg to the point that the income it brings in is sufficient to support a lavish lifestyle, or pare down your expenditures to the point that you can live off the interest from a much smaller sum. And at today's pitiful interest rates, the latter approach is a lot easier. (This is the route to financial independence touted by Joe Dominguez and Vicki Robin in their hugely successful self-help book, Your Money or Your Life.) So for me, the whole point of being rich is having enough to support a modest lifestyle without additional income, not having enough to put an elevator in my air-conditioned garage.

Does this mean I'm out of touch with America? Well, maybe, but I'm not entirely convinced. The statistics cited in the article show that Americans have no problem with the idea of wealth as such and, indeed, aspire to become rich themselves—but nowhere do they show that the average American's idea of what it means to be rich is a huge house, several huge cars, and an Olympic-caliber racehorse. In fact, the very Gallup poll cited in the article finds that most Americans, while saying they would like to become rich one day, do not actually believe that the rich are happier. The Gallup folks suggest several possible reasons for this discrepancy: "Americans who are not rich may simply not want to concede that they are missing out on something that would make them happier, or they may perceive that being rich carries with it new problems or that happiness is related to much more than wealth." However, here's another possible interpretation that might make sense of the findings: "Sure, I'd like to be rich, but I don't think most of the rich people we have now are actually making themselves happier with their money. As far as I can see, they just spend it all on great big houses and Jet Skis. I bet I could do a lot better with it myself."
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