On a trading desk everyone sits together, from interns to managing directors. When the guy next to you makes $10 million, $1 million or $2 million doesn’t look so sweet. Nonetheless, I was thrilled with my progress.
My counselor didn’t share my elation. She said I might be using money the same way I’d used drugs and alcohol — to make myself feel powerful — and that maybe it would benefit me to stop focusing on accumulating more and instead focus on healing my inner wound. “Inner wound”? I thought that was going a little far and went to work for a hedge fund.
Now, working elbow to elbow with billionaires, I was a giant fireball of greed. I’d think about how my colleagues could buy Micronesia if they wanted to, or become mayor of New York City. They didn’t just have money; they had power — power beyond getting a table at Le Bernardin. Senators came to their offices. They were royalty.
Only a wealth addict would feel justified in receiving $14 million in compensation — including an $8.5 million bonus — as the McDonald’s C.E.O., Don Thompson, did in 2012, while his company then published a brochure for its work force on how to survive on their low wages. Only a wealth addict would earn hundreds of millions as a hedge-fund manager, and then lobby to maintain a tax loophole that gave him a lower tax rate than his secretary.
Addiction seems to be a good framework to study excessive wealth accumulation.
I liked this one:
Dozens of different types of 12-step support groups — including Clutterers Anonymous and On-Line Gamers Anonymous — exist to help addicts of various types, yet there is no Wealth Addicts Anonymous. Why not? Because our culture supports and even lauds the addiction. Look at the magazine covers in any newsstand, plastered with the faces of celebrities and C.E.O.'s; the superrich are our cultural gods. I hope we all confront our part in enabling wealth addicts to exert so much influence over our country.
You can download the wealth addiction book referenced in the article for free here:
Reading the book I get the impression that ERE is a great way to get wealth addiction.
The only way to get out is the notion of enough. The question is if one is able to pull the plug. "I can stop at any time if I want to."
Being trained to avoid giving "wasteful" christmas presents and to limit the costs of social interaction (going out, birthday presents, vacations, etc.) by molding it in alignment with financial goals, the fetishization of efficiency for its own sake and the disdain for others not focused on this accumulation sounds like it's coming straight out of this book.
Felix wrote:Addiction seems to be a good framework to study excessive wealth accumulation.
I liked this one:
Dozens of different types of 12-step support groups — including Clutterers Anonymous and On-Line Gamers Anonymous — exist to help addicts of various types, yet there is no Wealth Addicts Anonymous. Why not? Because our culture supports and even lauds the addiction. Look at the magazine covers in any newsstand, plastered with the faces of celebrities and C.E.O.'s; the superrich are our cultural gods. I hope we all confront our part in enabling wealth addicts to exert so much influence over our country.
You can download the wealth addiction book referenced in the article for free here:
The part you quoted was what stuck out to me as well. Addiction might be a useful metaphor, but wealth accumulation operates very differently in our society overall.
As the Xmas season ran its course I saw all kinds of addiction. Somebody told me everyone has a demon. My dad's wife who could have been his daughter is the latest phase of his women problem. Sister's spending problem. My aunt's pills. My other aunt's plastic surgery, Botox, gym rat body complaining she cannot find another 75 year old to satisfy her sexual appetite (yuck TMI). My neighbor's bottles hidden in MY recycling. My cousin's stash of food, tools and hunting gear he tends to use in one of many uncertain disaster scenarios. He's never caught one fish or taken wild game. My very skinny teen niece playing with a salad leaf on her plate at a big dinner.
I started wondering what my addiction was. My SO jumped in and said saving money. I asked if speculating (gambling) was the addiction, but she said that is the risk I take to feed the former. Like a whore who street walks to get a needle. Ouch. "honey, ever realize how often you count your money?". "I know what will happen, you say all you need is double what you have, eventually you'll get it, then you will say if you just had double what you have then you'd feel safe."She said safe and not happy. She went on about how I say I no longer carry my HP12c but I actually have an phone app that looks like one and I'm punching it like a 13 yr old texting.
What I thought? That's normal, as images of my childhood counting a well organized drawer of cash in my dresser flashed by. I actually had gone to that same dresser over the holidays to check if it was empty...the way I left it 30 yrs ago. I always check it when I visit my mom.
Funny how addiction drives so much human endeavor. Any extreme behavior has some element of addiction behind it.
Is wealth addiction so bad? Man I'd sure like a $3.6 M hit right now. (sweating shaking) How can I get to that level?
Last edited by Sclass on Mon Jan 20, 2014 9:17 am, edited 1 time in total.
Certainly worship is there. He treats these hedgers like powerful demigods who can do things we can't.
There's also a mix of ego stroking. Like he's better and smarter and he's addicted to establishing his superiority using a number. I'd almost say he's not just addicted to the wealth but also he needs to fill his void as he says.
The article was good, but it seemed a little heavy-handed. Like this quote...
"Like alcoholics driving drunk, wealth addiction imperils everyone. Wealth addicts are, more than anybody, specifically responsible for the ever widening rift that is tearing apart our once great country. "
I don't think wealth, or the accumulation of wealth, is inherently evil. The author was doing it for the wrong reasons, but that doesn't mean everyone is.
Also, wealth addiction is a little different than other addictions like gambling or drinking. You can give those up completely, but giving up earning/having/spending money is mostly impossible (kind of like food addiction problems--everyone needs some food). I wouldn't lump all of those addictions together.
He seemed more addicted to winning or succeeding. Money was his chosen measure of that.
Last edited by jennypenny on Mon Jan 20, 2014 11:51 am, edited 1 time in total.
jennypenny wrote:
He seemed more addicted to winning or succeeding. Money was his chosen measure of that.
Very well said. There is a lot going on.
I didn't mean to lump all addictions together, they just seemed to have some commonality. I'd certainly choose Botox and gym over booze. I don't think I want sis's debt. If my cousin would get a hunting license and actually go out with me it would be fun...he has better stuff than me .
Just saying, a lot of energy goes into fueling addiction.
jennypenny wrote:He seemed more addicted to winning or succeeding. Money was his chosen measure of that.
Yup. Many of those Fortune 500 guys are on record saying things like "Money is just how I keep score".
I honestly think the obsession shown in articles/books like this comes from applying a middle class viewpoint to an outlier. Ask a middle class person what they'd do if they had a million dollars, and they almost always get about the business of spending that million.
There was a Jobs quote in the Isaacson book that was something to the effect of, "I didn't have money, and then I was rich, so I have never worried about money"
People I've known that had liquidity events, and looking at my own life, I found this insight both profound and spot on. The more money I have, both the less I think about it, and the differently I view it.
jennypenny wrote:
The article was good, but it seemed a little heavy-handed. Like this quote...
"Like alcoholics driving drunk, wealth addiction imperils everyone. Wealth addicts are, more than anybody, specifically responsible for the ever widening rift that is tearing apart our once great country. "
Agreed. Also...
I was in a meeting with one of them, and a few other traders, and they were talking about the new hedge-fund regulations. Most everyone on Wall Street thought they were a bad idea. “But isn’t it better for the system as a whole?” I asked.
One should not hoard all the blow. It's better for the system that everyone gets a taste! It strikes me that the author is absolutely still an addict. He simply switched to a more popular gang in the turf war.
Any time your predominant world values -- be it power, success, or safety -- can be quantified in net worth it is no wonder that people can get addicted to counting their money pile. I certainly struggle with that at times, and see it a lot in early retirement internet forums especially when people talk about investments or paying off a mortgage. Suddenly the same people preaching a modest lifestyle get downright dogmatic about maximizing returns with no regard to how much is "enough". (See "safety" above).
FWIW, the thing I like most about ERE in comparison to other ER philosophies is the concept of focusing less on wealth as a source of personal empowerment and more on maximizing other non-monetary skills. It helps keep me grounded.
Sclass wrote: I didn't mean to lump all addictions together, they just seemed to have some commonality. I'd certainly choose Botox and gym over booze. I don't think I want sis's debt. If my cousin would get a hunting license and actually go out with me it would be fun...he has better stuff than me .
Just saying, a lot of energy goes into fueling addiction.
My comment wasn't directed at you. They are similar. People who have addictive personalities also tend to have several addictions or mirgrate from one to another. In the article, it sounded like that guy's therapist knew greed/addiction wasn't his problem but he refused to listen.
I think score keeping is dead-on. I think it's important to realize that "not all money is created equally".
For the poor and the middle class (by which I mean the mentality), money is intended to use, so all personal values are framed in these terms.
Once you have somewhat more than you use, like most of us here, money is intended to invest. That's a very different attitude. For example, I hate paying 25 cents too much for a loaf of bread, whereas I'm much less emotionally affected if my portfolio dips $4000 within a day.
And when you have even more than you can invest, that is, you literally have so much cash coming in that you don't have the time or energy to use it for investing because such returns matter little compared to the next bonus, then money becomes just a way of keeping score.
I think the systemic impacts are overblown. Very likely the bonuses just sit as cash in some bank---hence the banks get to lend it out. The invested money simply changes hands. The biggest problem is the envy it generates from the spenders. Perhaps there would be a way to "honour" the score-keepers in other ways than giving them ridiculous amounts of what most people use to buy bread and cell phone subscriptions. Like medals and titles. Maybe bringing back the aristocracy would be cheaper all around?
I don't think it's as bad as it sound. While it's owned in principle, it's still controlled by far more many people. While I may own $25000 worth of UPS shares (I don't) it doesn't mean that I can show up at the nearest hub and claim the keys to a delivery truck so I can drive it around. In fact, my socalled business ownership by common equity doesn't mean much at all. I'm literally powerless.
Of course I could own more of the company and get on the board of directors and start exerting more influence. Still, that would take a lot and I'd pretty much need 51% of the vote to really carry through any outrageous policy that the rest don't agree with. Hence ...
The actual power is delegated to a huge number of managers and it's executed by pretty much all of the rest. If people collectively decided to stop working and consuming tomorrow, the 1% who owns 50%+ of the wealth would not be able to do much of anything about it. Hence, their power (what little there effectively is) is by convention and common agreement.
On the flip-side, a lot of this "virtual power" can be grown by simply arranging for bubbles which causes the weak hands to fold and hand over even more power. The real question is ... once 1 person holds 100% of the power. What are they gonna do with it? They only hold it by virtue of everybody else agreeing with it.
Addiction in general (and the degree of its manifestation) seems to be related to a lack of social connections. The rat park experiments come to mind: http://www.stuartmcmillen.com/comics_en/rat-park/
I would certainly like to see people who have more money than they can possibly spend use another means of scorekeeping than the stuff most people need to feed themselves. The book says that other people losing and suffering seems to be a big part of "winning", though. There's no fun in it if you can't make other people envious or make them suffer. I guess that is part of the problem.
I really don't think ambition is quite the same as addiction. There are parallels, sure.
The further you move from a typical performance in any part of your life, the less balance you will have. People that choose to be the very best at anything are by definition not balanced. I'd even include frugality* in that mix for the reasons you list above, Felix.
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