Our relationship with money is complicated.
Some folks spent their childhoods listening to tirades against the rich. Others were told that the pursuit of wealth is evil. Or that it’s unfair how some people have more money than others.
We all need money to survive. And yet, most folks don’t realize their attitudes toward wealth and the wealthy is a big determinant in their ability to generate income.
Yes… hating the rich can keep you poor.
That’s the conclusion of Dr. Brad Klontz, a financial psychologist and fellow of the American Psychological Association.
In 2015, he helped pen a study titled “The wealthy: A financial psychological profile.” According to Klontz and his team…
Research has noted some differences between higher income individuals and lower income individuals on a number of psychological variables…
Whether deserved or not, research has supported the notion that negative beliefs about money and wealthier individuals are associated with lower income, lower net worth, and a host of financially self-destructive behaviors.
In other words, hating the rich is a self-limiting exercise.
Klontz focused on three psychological constructs to make his case:
- Money ambivalence/cognitive dissonance: People who are “anti-rich” tend to have a love/hate relationship with money. They simultaneously believe that more money can make them happier… and that they can never have enough. This can be the root cause of many self-destructive financial behaviors.
- Envy: When you feel “inferiority, hostility and resentment” toward someone else because they have more than you, it can play tricks on your brain. You spend more energy on being angry than, say, working hard… or learning to invest wisely.
- Relative deprivation: The idea is that “an individual’s level of satisfaction is not based on their objective realities but on their life circumstances relative to the experiences of those around them.” According to Klontz, people who feel this way tend to prefer smaller immediate rewards over larger delayed rewards.
We don’t bring this all up as a roundabout way to say, “C’mon, give rich people a break.” Rather, it supports a longtime belief of ours…
That Americans need to get their financial acts straight.
Liberty: Only a Trade Away
As our political climate has grown more contentious, we’ve heard a lot about income inequality and corruption on Wall Street.
But we argue… if the average person spent as much time making smart financial moves as they do grumbling about the Kardashians, the disparity between the haves and have-nots wouldn’t be so great.
A Gallup poll found that a mere 57% of adults are able to pass a basic personal finance exam. In other words, nearly half of our society is financially illiterate.
Yet we rage against the 1%.
We often write here about the liberating nature of wealth. The idea is simple: More money means more freedom to do the things that fulfill us.
It’s a universal concept. Who doesn’t yearn for more freedom?
But recommend the stock market as a proven means of getting ahead and the average person will return a blank stare.
As a nation, we tend to act like stocks are locked away in some cabinet… That they’re somewhere up high, where everyday Americans can’t reach. The notion is bunk.
The truth is that literally anyone, rich or poor, can sign up for a trading account and start investing for the future. There are even smartphone apps that let you conduct trades for free. You can be up and running in 10 minutes.
Unfortunately, it’s just easier – in the short term, anyway – to heave blame around.
Most folks would rather commit financial self-destruction.
Research proves it’s a dangerous mindset. It’s certainly no way to achieve liberty.
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