For this to be true you have to actually be true you have to first experience having X as the catalyst for the recalibration. That is similar to my expensive tastes recalibration as a way to remain motivated so I can see it happening for people who are not that aware. The problem though is that most people who subscribe to cheapness usually never experience X so unless the recalibration happens via some kind of social osmosis I can't see how it would happen.

This is hard for me to accept. I know I don't behave this way but since I have no way to access other people's thought process I have no way of knowing if other people do. I have an incredibly low opinion of psychology so studies from that field won't help. I have no reason to think I'm special so barring other evidence I have to assume that other people are like me. In the alternative if this actually is an accurate description then it would really lower my opinion of humanity.

I can believe that this process occurs but it seems like a bizarre choice of explanation for why many people value wealth for its own sake.

I think I would rather take Freud's explanation of miserliness resulting from sublimated anal fixation.

VanVeen

Interesting post you made.

No, his post concerned a safe withdrawal rate of 10%, which is absolutely absurd.

Yes, this is the only thing that can make you genuinely happy. (Unless your work is the thing that fulfills you as a human being)

Great to hear that you understand this thing, I would guess that you are from the US and so many Americans are so brainwashed in the "money" = "self worth".

"If you can't find happiness with $100, how are you going to find it with $1.000.000?"


IQ tests are only a good tool to find underachievers. The IQ test has always mainly been used to find people that have mental/learning issues. So the state can point to the test and say: "this person need psychiatric help" "this person need welfare money because he/she won't be able to support themselves"

The interesting thing is that the test doesn't tell you anything. The numbers/cutoffs are very arbitrary and it's mainly used to find people that have mental disadvantages. Also you need to realize that IQ tests are a very big group of tests. There is a huge difference between a online IQ test with 40 questions and WAIS-III test.

So I really like that most people here have understood that IQ is not actually telling you much


EQ test also has the same kind of problems. You are testing for one thing and thats the only thing you will get an answer on. Can you understand how another person thinks? Do you understand that the other person is doing the best he/she can with the information and the value system he/she has? etc...
And this kind of skill is much more important than problem solving if you really want to make it. We are still living in a world where you need other people if you are going to become filthy rich. (Best I throw this in here, yes there are exception to all generalizations)

This is a irrelevant response to the point made. At no point did I say anything about wealth being the only thing that genuinely makes someone happy. Only that if you work -- thus sacrificing the ability to do thing that make you happy to make money but then fail to transform those funds into something else that has the ability to make you happy that you have sacrificed for nothing.

I don't reject the idea that work can be fulfilling in and of itself in some cases but that most options that lead to wealth do not fall into that category. Of the few that do fall into that category altruistic versions of the occupation exist. Given that the point presented involves individuals who horde wealth we can easy conclude that the motivation for them working is the pay rather than self-actualization.

Actually I'm not but again anti-US attitude is expected.

Even though at no point did I equate happiness with wealth I'll still take the time to answer a pretty stupid position to take. How are you happier with money than without? Less stress, better health, more freedom, and the ability to do stuff are the big ones.

One of my degrees is in psychology I while I appropriate the effort to educate me I am more than familiar with IQ tests.

This is simply wrong. At a minimum IQ has been shown to be strongly correlated with both performance on standardized testing and academic performance. As such even if other correlations are ignored the importance of formal education to your future already makes IQ's correlation with your ability to get the grades and SAT/ACH scores required to get into a good school tells us a lot.

IQ has been shown to be correlated to income. EQ has not been shown to be correlated with anything in a meaningful way. There is disagreement about how to measure emotional intelligence and possibly in the future some form of EI will be of some predictive value but generally when people talk about EQ they mean Goleman and that model of emotional intelligence is not taken seriously by anyone who actually understands research methods.

any explanation for why many people value wealth for its own sake will be reducible to an explanation of how our reward system works. i offered a comprehensible approximation of how many researchers think our reward system works (in the abstract) because i think it is useful to know. discard the dry terminology if you dont like it.

the gist of my post was this: some people like having money because they like having money. that isnt surprising when you think about how people come to want and enjoy things. you could argue i should have written those two sentences instead of what i wrote, but i think what i added aided comprehension and forestalled non-specific criticism.

i have yet to encounter a plausible description of the functional role of emotions that wasnt essentially, ''its all about prediction and motivation [the future], man''. how would you prefer people to come to want and enjoy things?

people find the pursuit of goals rewarding and satisfying. they routinely find the achievement of specific, definite goals like ''winning a gold medal'' and ''making a million dollars'' unsatisfying and empty. why? why is it the journey and not the destination? why can everyone relate to the lyrics of a popular miley cyrus song? those questions have obvious answers if you model a reward system as i suggested in my earlier post. those answers also imply an easy way to lead a fulfilling and productive life: pursue a higher-order goal without a terminal point. usually this will look like ''acting like a leader'' or ''being don draper/don quixote'' or ''acting as a high-minded spiritualist'' or ''being a know-it-all asshat''. the series of rewarding sub-goals will only end when you cease to be.

meh, it's strongly correlated within a limited range. of the 10% of non-******ed persons outside of that range iq doesnt tell us much about who will and who wont become exceptionally proficient. i actually think those with very high iqs are less likely to prove helpful in the most common classes of social games: a) games where all of the players have convergent preferences, e.g., charades, ''forum sheep'', limited range of conversation types, so on, and; b) games where the players have preferences that both converge and diverge, e.g., fashion games (markets, poker, trend-following and trend-exploitation generally), romantic relationships, business relationships, most conversations, etc. scoring very highly is impossible without having invested your attentional resources in an atypical fashion which betrays atypical preferences on a fundamental level (leading very commonly to aberrant high-level preferences).

unassailable self-assurance. you want to be so sure of your ''value as a person'' that decision outcomes are evaluated dispassionately. when your self-worth depends on how well you do things you quickly stop trying to do things you cannot easily do. since mastering anything complicated requires repeated failure this attitude basically ensure mediocrity.

frequently (but not always) this kind of confidence has irrational and/or unjustifiable origins, e.g., someone thinks being good at math matters the most and they are the best at math ever, or someone thinks being rich and handsome matters the most and they're both. it is very often evidence that someone isnt well-calibrated socially (former case represents larger proportion of total than latter). that often proves to be to their long-term benefit, though!

i was going to chime in early to say those most likely to take risks are:

i) those at the bottom of the totem who stand to lose nothing by 'defecting' and gambling on a paradigm shift in values or beliefs, and;

ii) those at the top of the totem who cannot lose by gambling (chief's son, super proficient at valued tasks, etc.) but who stand to win by either rising higher or expanding the ambit of their status (now they are not only the best warrior but the cleverest philosopher!).

a third group is just those who are super confident for whatever reason (imaginary status creating a freeroll).

yes.

I find it very surprising -- in fact I can't even understand it. Would these people still like having money in a post-apocalyptic world where money can no longer be exchanged for anything?

Finding dissatisfaction with the hole that is left because some specific goal that occupied a major part of your life is done and now you are a little lost until you find something else to take the place of that goal. That is very different than getting satisfaction from something that can't in any meaningful way give you satisfaction. Without the ability to use money to get stuff it has no value and brings no satisfaction. If I was locked in the hole for the next 100 years having 20 billion dollars or nothing would be equivalent to me.

1. Dedication

2. Creativity

3. Intelligence

4. A strong desire to "win"

5. Emotional awareness and control

What would your explanation be for, let's say people who are very cut-throat about holding highscores in games, where the score has no tangible utility? Or people who like to collect things that most others would consider "useless"?

The score actually had a tangible utility but it is simply limited to a tiny sub-group of the population. If I met someone who had the high score at WoW I would think what a loser but amoug the demographic that play WoW he is a hero. I guess the same could be said about the cheap and they could be held in high regard on FatWallet or OOT.

The major difference though is that unlike the WoW player who will do most of his socialization among the demographic that puts value in his "achievement" someone who is acquiring considerable wealth and hording it will be forced to interact a good amount with people who hold views that are diametrically opposed to his own. Further, I think I could take a WoW player and put him into a lifestyle where he gets laid and all of a sudden he doesn't care about his previous prized score. The same transformation doesn't seem possible with the cheap.

lol @ Buffett nuthuggers on this board. The past thread about him and taxes pretty much exemplifies the lols. Either he's too stupid to know what he's saying or a hypocrite.

Henry


Are you basically saying -> what is the point of making X amount of money or accumulating X, if your yearly expenditure is significantly less?

And if so, what industries or career paths are you referring to?


Does this apply to a relatively average wealth individual that is relatively cheap with his personal expenditures, but uses the extra money as capital to reinvest for a more comfortable future.


Does this apply to someone like Donald Trump?

No. He's referring to scorecarders like Buffett.

No the score-carders I somewhat understand in that it is about getting the high score and there is all the value in jockeying for position on the Forbes list. Not something that would interest me but I understand it.

I'm talking about people who just are insanely cheap. Two examples, a guy I use to be friends with who make(s) $140-160k/year but livid in the lowest of the low student housing until the building was condemned for mold, drove a 15+ year old POS car, would bring a bottle of gin with him to drink in the cab so he wouldn't have to buy drinks at the bar, he would go to this one bar four hour early to avoid paying the $4-15 cover, etc. The guy had about half a million in savings and a good income yet the quality of life of a pauper and no intention of ever changing. The second example, the guy was worth a decent amount and owned two business and actually made a deal with a local sandwich shop where he bought and prepaid for 30 or 40 sandwiches, he flew on the anniversary of 9/11 because he believed that airfares would be cheaper, and he basically would just nitpick any server looking for a justification to not tip. He actually circled $30 worth of private calls on his business partner's company cell phone and left it on his desk despite the partner having equal equity but bringing in 80% of the revenue.

So basically people like that. People who work hard to build wealth but who have nothing to show for it except a number on a statement.

I drive a 9 y.o. POS car. :-(

I constantly indulge in small stuff, I just can't bear to make like a $50k expenditure when I could use that money for bankroll or investing.

Ppl will seek to acquire more money than they need or believe they will need because its insurance. The only ppl that ever quit a real job without a comparable replacement are the financially set and the irresponsible.

Its also the quick and dirty measure of success and the one most often used whether accurate or not. In that it provides both social recognition and self-confidence. Speaking of Buffet, I think Munger made a good point on this in a recent interview when he said that envy is the real motivator. Some guys cant be happy making $5mm when the next idiot is making $7mm regardless of their lifestyle.

Those are the senior citizens you see in the casino every weekday dumping their life savings into slots. Its called poor financial planning.

I will concede though that some ppl find greater utility in saving money vs spending it. Nice to be their kids unless of course you adopt their behaviors.

I can understand sacrificing at the beginning if your motivation is to make the snowball bigger and thus grow faster so that you can then enjoy even more stuff. That is perfectly logical. There were periods of my life were I lived a very pragmatic life as a means to an end. The whole time though I clearly knew it was for a finite time and that the reason I was doing it was so that I could have more stuff in the future. More stuff and the freedom to enjoy it was always the motivation.I put a heavy premium on having stuff when you are young so plans about payoffs in my 50s never appealed to me but that is a different debate. The people I'm talking about never spend it and they have no intention of spending it. They just keep getting accumulating more of it and then they die. If I went and found me ex-friend I certain he would now have about $1M doing nothing for him and he'd still be clipping coupons and only going to movies on cheap night while driving a **** car and living in a dump. If I found him ten years from now he'd still be living exactly the same and just accumulating more money that he'll never spend.

They should ask your friend to run the check book for governments.

Yeah, those people are morons. Discussing them is the equivalent of HS gossip. Its fun and indulgent, but really serves no purpose.

I would agree with this.

I read a story some time ago about a woman who spent her entire life nutpeddling her life expenses and living on barely anything and they found $2M cash stuffed in her mattress or something like that. Living the life of a poor person and dying with $2M is a waste -- in terms of garnering any utility from the money.

Sure, she had some benefits of it, in the sense that she had peace of mind that if an emergency ever came up that she'd be OK, but as far as her standard of living, she may as well have been poor. Same lifestyle, same expenses. Not sure if the story is true but even if not, the principle idea is mainly what seems illogical to me.

If someone doesn't want to spend money or garner any value from it, then why not exchange the time spent making it to be used on something else that may provide more value to your life. I do buy the argument though that some people just really want to provide for their children so they can live a better life than they did -- just a shame though if those kids go on to blow it.

+1 Saving for a goal is the important part, you don't want to accustom yourself to a $100k lifestyle while getting there. We can get ourselves nice things while we are on the come up but make them spare, and over time add more as you earn more.

misers exist and people who like to spend money dont understand them. i agree!

a lot of people like money and enjoy just having it (including you). this isnt surprising given [edited out!]. it isnt stupid because values are arational unless being discussed within a framework of higher-order values. frugality may be a good or bad policy in the management of one's private pleasure economy depending on.. stuff [what those higher-order values are]. you get the idea.

to answer henry's question, yes, scrooge mcduck would still love swimming in his moneybank after fiat currency collapses and gold turns out to have lost its ability to coordinate beliefs. eventually he would probably update -- he seems pretty clever to me -- but he'd still probably retain a fondness for money. he may even say it has ''sentimental value''.

this is a good point and relates to what i was saying earlier: people expect others to expect them to expect that others will use wealth as a proxy for success/person-value. if you sincerely argue that money isnt a measure of success you'll seem poorly calibrated/stupid/******ed. if you knowingly argue that money isnt a measure of success you'll either seem high-minded and wise (you have it or you're clever enough to fool others into thinking you could if you wanted) or envious and pathetic (if you dont and arent).

vagueness notwithstanding, this is one of the better lists offered.