13 April 2007
The Hidden Nature of Money - Part Three - A Review of Green With Envy
This week, we’ve been discussing the hidden nature of money. On Monday, I discussed a few truths that people need to hear. On Wednesday, I fleshed out those ideas and shared a incredible story about a girl and her engagement ring. Today, I’m going to do a more formal review of Green With Envy: Why Keeping Up with the Jonses is Keeping Us in Debt by Shira Boss.
This is one of those books that really brought some things to light that I had never put together fully. I’m not sure I would call it relevatory, but it was certainly insightful.
The author’s goal throughout this book is to explore the social aspect of money. You won’t find the formula for how compound interest works or what stocks to put your money on, instead a collection of interviews and research that document how various segments of the population deal with money.
The book goes through the following “segments”:
- the neighbors next door: When rumors spread that the new neighbors paid for their NYC apartment with cash, the author and her husband begin to build up a picture of them as lavishly wealthy and happy. Through some very honest interviews, we learn this isn’t exactly the case.
- the nuclear family, living in the cheapest house in a rich neighborhood: an account of a family living well beyond their means, trying to keep up with their friends, and ending up in bankruptcy.
- the politician: Boss looks at the life of a politician at the federal level: not quite as rosy as it would seem.
- the aging boomer: classic case - aging Baby Boomer, not enough set side for retirement, still working.
- the billionaire: the author interviews and examines the life of a billionaire and his wife, while discussing the effect of money on the ultra-rich.
Throughout these chapters, Boss also discusses a more general view of the social side of money: how we feel when our friends excel financially, our tendency to hide our financial affairs from those close to us, and the pressure people feel to succeed.
My favorite parts of the book had to do with bankruptcy: during the chapter about the family, she shares some thoughts on the topic that I had never considered. For example, she discusses the effect of bankruptcy on children. It’s a topic they aren’t allowed to discuss and probably don’t understand, but they know its causing their parents incredible amounts of stress and shame. In event of another type of stressful event - divorce - at least the parents let other adults in the children’s life to be on the watch for any signs of distress in the child. In bankruptcy, no such alert is given, and the child may feel all alone with regard to the topic - not unlike how their parents likely feel.
The section dealing with the rich among us was also very interesting. Since people feel that being rich should make you happy, when the rich aren’t happy they feel like something is wrong with them. Even more so among those who inherited large fortunes - they have no motivation or ambition to work whatsoever. There certainly is lifelong fulfillment in having a satisfying career that money can’t buy. Some rich people move into middle-class areas, and hide their wealth in an attempt to live a “normal” life.
Other profound topics were more research based: Boss cites a study of money, and found that given the options of: A. earning $50,000 when your friends all earn $25,000, or B. earning $100,000 when your friends all earn $200,000, nearly half would choose option A despite it being half as much.
Another study has to do with a game where player A is given $10, and must give some portion of it to player B. If player B accepts the portion, both players get to keep their money. If player B rejects it, both players lose their money. In situations where player A gave less than half of the $10, player B was very likely to reject, despite the fact he would still stand to gain between one and four dollars. Amazing.
I highly recommend this book to those of you who are intrigued by the topic of how money and the social structure of our country are intertwined. Boss does a great job of highlighting a variety of in-depth issues surrounding the topic.
