It’s a well-worn anecdote, but if you haven’t heard it before… authors Kurt Vonnegut and Joseph Heller were at a party held by a billionaire investment manager. Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds, “Yes, but I have something he will never have…enough.”
It’s a two-part commentary. Heller is inferring that internally he has a contentment with his status, success in his chosen field and his financial position. At the time, this likely afforded him the ability to continue pursuing his career on his own terms. The second part is more speculation on Heller’s part. Whether it was true or not that the billionaire would ever be happy with his lot in life, who knows. We don’t know who he was, or what he wound up doing with himself, or his money.
The anecdote continues to resonate because we all might have known someone throughout our lives who primarily pursued money and material objects, with seemingly no end. We also have a general idea of what we think that means: usually unhappiness.
While speculation, a great deal of study has been done on intrinsic and extrinsic goals. These can be tied to things like relationships and personal growth on the intrinsic side, and image, money, and materialism on the extrinsic side.
One of the most published and cited experts in the area is Tim Kasser, a psychology professor at Knox College in the US. Kasser has researched the relationship between materialism, well-being, and human values, with a focus on how chasing materialistic goals has an impacts psychological health and satisfaction with life. He consistently finds that individuals who overweight materialistic outcomes will usually experience lower levels of well-being, happiness, life satisfaction, and self-esteem. Worse, he finds these people have increased anxiety, depression, and interpersonal difficulties.
One of his more interesting studies in this area, and building on his previous work, was done with Virginia Grow Kasser and published in the Journal of Economic Psychology in 2001. The pair took two groups of people who’d scored high in materialism and low in materialism. This was assessed on an aspiration index revolving around whether financial success and possessions were central to their system of goals. They then had them recount two of their most impactful dreams, with the themes of the dreams being categorised.
The people who’d scored high in materialism had the most dreams that were related to insecurity. The common themes were falling and death. For dream theorists, falling is interpreted as insecurity and not being in control of one’s destiny. While those who’d scored low in materialism did have dreams with elements that seemed dangerous, the dangers were fleeting because they navigated the danger or it turned out to be not dangerous at all. An example being one person felt scared by a large purple poodle, but it turned out the dog only wanted to lick them!
Poor family dynamics were also a theme with those who scored high in materialism, while positive family dynamics were seen noticeably more in the dreams of those who scored low in materialism. Self-esteem was another theme and probably the most obvious difference between the two groups. While some of those who scored high in materialism had dreams about feeling incompetent and failing to measure up to some standard, no one who scored low in materialism had dreams about feeling incompetent or failing to measure up.
The pair explained dreams are a useful measure because they were something a person had experienced before being approached by researchers and aren’t generated in response to the researcher. The dream is created when other cognitive processes are dormant, which may reveal more about a person’s psyche. Finally, they occur in a unique brain state where issues important to the dreamer are likely to present and represent issues people otherwise wouldn’t share.
Kasser has also suggested there are two primary pathways that influence people toward money and materialism. First, social modelling, this is being exposed to messages and models suggesting it’s a worthwhile goal. The second being insecurity, which brings a coping response that occurs when people feel threatened or worried that their physical and psychological needs are unlikely to be met.
With this knowledge at hand, are financial advisers leading clients down a dark path of chasing wealth accumulation and eventual unhappiness?
We can safely say no. While we all want to build wealth to ensure we have enough, that wealth is there to give us the choices we want in life. We don’t encourage anyone to use it as a measuring stick. We also don’t find potential clients who are focused on money and materialism tend to hang around long.
The dream study highlights why. It appears there is significant internal volatility that accompanies people who place a high value on money and material possessions. They also aren’t fun to deal with.
They’re certainly successful in their chosen field, but they’re often rude, overly concerned about fees, and not from a value perspective: it’s just important they feel they’ve paid less. They’re focused on the short-term wins, easily distracted by speculations, and they’re not really interested in the fundamentals. They just want an exciting portfolio that gives them something to talk about and measure against others.
And if Tim Kasser is right, they’re deeply unhappy.
While people might assume that financial advisers would want the richest clients or wealth chasing clients, there needs to be a purpose for money beyond piling it up. Financial advisers want clients they can make a difference for, have a positive relationship with, and hopefully the client will see and appreciate the value of advice. They already know what enough is.
Hopefully those with a primary focus on money can address the root cause and figure out the who, the what, and the why of enough.
This represents general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs.
With thanks to FYG Planners for this article