"The pessimist sees difficulty in every opportunity. The optimist sees opportunity in every difficulty."
Let me tell you a story about a boy. This boy had some good relationships with kids at school. He was pretty funny and could make people laugh. Math came easy to him so he was able to help people with their homework. He was pretty fast and good at sports. He could draw pretty good and liked to learn from others who shared his hobby of drawing comic book characters.
When he went home he played with some friends from the neighborhood, but he never hung out with the kids from school. He would hear kids at school talking about sleeping over at each others' houses. He was never invited over, but he never invited anyone over to his house, either. It seemed all his friends from school lived in large houses in fancy areas that had names, like Morningside, or Village Green. When kids from school had sleepovers at their house in Oakport they had (at least in his head) large basements where they would play Nintendo all night long and drink RC Cola. He didn't have that.
He was too ashamed to invite people over. What if they said "no"? What if they came over once and told everyone that there was no large basement with Nintendo and RC Cola? What if they found out he wasn't rich?
Shame kept him from having more friends than he had.
I know that boy well because that boy is me.
Money scripts are invisible rules that live deep inside our minds. They are contextual, partial truths that are passed down from generation to generation and drive our financial behaviors. Money avoidance is one category of money script.
If someone happens to be born in a low socioeconomic status, the shame that can come from that is very real. They observe the world around them and see, what they think, is everyone else enjoying life and it's just not possible to do anything about it. There can be a belief that they are trapped.
When they look at their life they see the fork in the road and often stick with the status quo. They take a vow of poverty and continue the life they know, even though it's a life filled with shame.
They don't try to advance their situation. They don't want to invest in education or training, because they don't see the value, or they don't think the value is worth the cost.
For many, it's far easier accepting the idea that the world is unfair and it's best to just live with it. It's a seemingly easier choice. The alternative is to go in a new direction and face a world that you don't know. That's difficult.
Wealth Doesn't Equal Income
One contributing factor in deciding whether or not to do something new is how easy it appears. Unfortunately for many, there is a view that being wealthy or successful means you have to have a high-income job. This confusion between wealth and income makes it seem impossible to get ahead for many, because if I can't get a job paying me six figures, then I'm doomed to be poor.
It's a little-known fact that having a high-income job is not a requirement for gaining wealth.
Cumulative Effects of Small Changes
One of the best tools available to us in personal finance is compound interest. The idea is that small changes over time will add up to big effects. It can seem boring in the short run, but exciting stuff happens later. The exciting stuff is the payoff for putting up with the boring stuff upfront.
The boring stuff is paying yourself first, living on less than you make, investing in yourself, looking for new opportunities, and getting your system automated. None of those things on their own is going to be life-changing tomorrow. But they add up!
Earning More...Without a High-Salary Job
When it comes to your cash flow - that is, what money comes in and what money goes out - you have two levers. You can spend less or you can earn more. Everyone always talks about spending less, and it's important. But fewer people seem to talk about earning more.
Many people, especially those who have money avoidant beliefs, earn less than they could be making. If someone has decided the world is against them, then they are less inclined to seek out promotions, they don't take interviews seriously if they get them, they don't ask for raises, and they don't look for jobs at other companies.
I know it's difficult to do these things, but consider this, if you've been in your current job for five years or more, there's a great chance you're being underpaid (note: I forget where I read this statistic, so, unfortunately, I can't link to it and I may be off on the exact number of years).
I can't talk about the shame associated with being in a lower socioeconomic status without talking about signaling and social media. This adds to the shame of being poor or feeling poor because social media is a wasteland of lies and nastiness.
To unpack what I mean by that, consider the idea that we all have things that we like about our life (you do, even if you don't think you do), and things that we'd like to change about our lives.
In social settings, and especially on social media, people signal what they want the world to see. We want the world to like us. We all want friends, followers, likes, retweets, comments, and respect. To do that we showcase what we are most proud of.
This was one thing when we ran in social circles of a dozen or so people, and went to school or work with maybe a couple hundred people. Now with social media, we aren't just seeing a few dozen people in school or at work. Now we're seeing what hundreds or thousands of people are doing on social media. And we're not just talking about colleagues on the same floor or people in the same grade anymore. Now we follow celebrities and sports stars, so we end up comparing ourselves to them, as well.
What that means is that we end up comparing the best lives of others' to our whole life, which includes the worst part of us. And we see it over and over again. The cycle continues.
It's not just an unhelpful comparison, it's a trap.
It's a Trap
When you compare yourself to the rest of the world one of two things tends to happen. You're could suffer from envy and keep up with the Jones', costing you a lot of money in the process. Or, you could have the insight to know you can't keep up with the latest trends, and suffer from envy and not be able to do anything about it - leading to negative feelings of deprivation and shame.
Can't Change the Hand You're Dealt
There's an old saying that you can't change the hand you're dealt; you can only influence how to play your hand. At first glance, I really like this analogy when it comes to our personal finances and socioeconomic status. We can't change the cards we get. It's a hell of a lot easier to win if you're dealt a royal flush than if you are dealt nothing but an 8-high. But you can change how you play that hand. You have options and strategies available to use to help your chances of winning by focusing on what you can control.
Translating from poker-speak to finance-speak, it's a hell of a lot easier to win if you're born to millionaire parents who have an interest in raising you well and you were lucky enough to be born with a high IQ than it is to be born to a single father who's nearly homeless and is more concerned about where he's going to get his next fix than teaching you anything about life. Still, in the second scenario, you still have some options available to you for you to better your situation.
While the part about not being able to control the cards you're dealt, is valid, the analogy falls apart when you consider the point of poker. The point of poker is to win. And there can only be one winner. Everyone else that plays is a loser. That's just simply not the case with our money or with life.
Play Your Own Game
Everyone starts from a different place. There is no winner, like in poker. Success should be measured by how far you've come from where you started, not an absolute location.
Steps forward are better than no movement or steps backward. Taking steps forward, in a way that fits your personal values, can help alleviate some shame. In the words of Jordan Peterson, "compare yourself to who you were yesterday, not who someone else is today."
You only have one life. Live intentionally.
The Happiness Lab Podcast: A Silver Lining
Brad Klontz, Ted Klontz: Mind Over Money
Sarah Newcomb: Loaded
Jordan Peterson: 12 Rules for Life
Ramit Sethi: I Will Teach You to Be Rich
Thomas Stanley, William Danko: The Millionaire Next Door
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