The Taboo on Talking About Money Hurts Us Because We Learn through Conversation.
Take an opinion survey on how it is that people learn and my guess is that the most popular responses would be “by taking courses” and “by reading books” and “by experience.” I believe that the single most important way in which we learn is by talking things over with others. We don’t feel confident about what we think we learned from a course or a book or an experience until we talk about it and get feedback on what we say. Conversation is the best teacher.
Most of us have taken at least one course that has something to do with money and most of us have read a few books on the topic and most of us have some experience with money. But how many of us regularly talk about what we learn from these other sources of knowledge?
We talk about how the price of gasoline has soared lately. But we don’t talk about the important questions: How much of our pay should we be saving?; Are stocks as safe as the “experts” are telling us?; Why are we taking on so much debt even though we earn more than our parents or grandparents did?; Does it make sense to pay off the mortgage early?
Talking about money is taboo. Get involved in serious discussions of money topics and you might reveal to your friends how much you earn or how much wealth you have accumulated. That can inspire envy. Or you might make yourself look foolish because of the things you spend money on or because you don’t possess a firm grasp of the basics of how stock investing works.
There are good reasons why talking about money is taboo. We pay a big price for keeping the taboo in place, however. Talking about money more openly would allow us to rein in wasteful spending. Talking about money would allow us to develop greater confidence in our investing strategies. Talking about money would help us to determine whether paying off the mortgage makes sense or not.
The Taboo on Talking About Money Hurts Us Because We Must Put Ideas Into Our Own Words to Develop Confidence in Them.
Thoughts don’t travel from the pages of a book to your eyes and then into your brain. It is by giving voice to new ideas that we come to understand those new ideas. If you cannot repeat something you have learned, you probably do not understand it well. If you do not give voice to new money ideas, it is not likely that they will remain in your memory for long enough to inspire a change in behavior.
I am reminded of the importance of putting ideas into words on a daily basis, when I construct posts that I submit to the Retire Early boards. Discussion-board threads are conversations. Writing a post is a form of speech. Every post I write solidifies my thinking on the topic being addressed. When I fail to engage in discussions of my ideas, they disappear from consciousness, like an unrecorded dream. It is by talking about money that we learn about money. It is by talking about money that we remember what we have learned about money.
The Taboo on Talking About Money Hurts Us Because the Information Vacuum Is Filled by Misleading Visual Money Messages.
It is human nature for us to compare ourselves with our peers. If you see a fellow who you went to school with driving an expensive car, there is going to be a voice in your head saying “you should have such a car too.” If you knew that a fellow you went to school with had saved $100,000 in his first five years out of school, there would be a voice in your head saying “you should have saved $100,000 in your first five years out of school too.”
We don’t need to engage in talking about money to learn that a friend is driving an expensive car. We can see the car. But if we don’t engage in talking about money, we are unlikely ever to learn that a friend has saved $100,000 in his first five years out of school. Spending communicates itself visually in a way that saving rarely does.
We see the benefits of spending everywhere we turn. That makes us want to spend. We rarely see the benefits of saving. That weakens any desire we possess to save. If we engaged in more talking about money, we would be better able to assess effectively the pros and cons of spending and saving decisions.
The Taboo on Talking About Money Hurts Us Because It Is Only Through Conversation That We Can Obtain Truly Customized Money Advice.
We like money because it enhances our enjoyment of life. We all have a particular vision of what constitutes The Good Life. The best money advice is customized money advice.
Conversation yields customized advice in a way that courses and books never can. When you engage in talking about money with your friends, you obtain feedback on the particular money topics that are of greatest interest to you. Give that up out of concern over the taboo on talking about money, and you give up a lot.
The Taboo on Talking About Money Hurts Us Because We Miss Out on Stories of Money Successes and Money Failures.
The Millionaire Next Door is a wonderful book because it reports on an important truth that few suspected before that book came along. Most millionaires don’t live in huge houses. Most millionaires don’t drive sports cars. Most millionaires don’t dress the part. It’s spenders that do those sorts of things, and few spenders become millionaires. You become a millionaire by saving. Savers care most about buying freedom, not houses and cars and clothes.
Why didn’t we know that?
It’s because for years and years we weren’t talking about money with friends. You probably have a friend who is a millionaire but who you don’t suspect of being one because you don’t often engage in intimate money conversations. If it were not for the taboo on talking about money, we all would know who the millionaires are and we all would be having conversations with them and be learning from them.
The Taboo on Talking About Money Hurts Us Because We Miss Out on Non-Conventional Money Ideas.
We rely on the media for most of our money information. That’s fine up to a point. But the learning experience that can be obtained from the conventional media is a limited learning experience.
When a magazine editor is putting together a cover article, she is aiming to attract lots of eyeballs to the page. That means that she is searching for lowest-common-denominator advice — advice that appeals to everyone and that offends no one. The most powerful money ideas are often ideas that do not appeal to everyone and that offend a good number of ones.
Those sorts of ideas are life-changing ideas. Those ideas need to come in through a back door. Those are the sorts of ideas that usually catch on by word of mouth. Those are the sorts of ideas initiated by a group of people sitting in a room together talking about money. It is through human conversation that powerful ideas are born and it is through human conversation that powerful idea are spread.
The Taboo on Talking About Money Hurts Us Because It Makes Us Dependent on the Views of Dubious “Experts.”
Today’s investing advice stinks. There’s no softer way of putting it that is accurate.
Why? Why can’t we do better?
The biggest problem is that middle-class investors are intimidated by “experts.” They hear many experts saying one thing, and they are not willing to trust the voice of common sense telling them a different message. Why are we so intimidated? Because we don’t have confidence in our own money beliefs. Why do we lack confidence? Because we don’t engage in talking about money with friends.
Conversation frees us. It permits us to check out new ideas, to test our skeptical reactions before putting them forward in public and risking the embarrassment of being wrong on a large stage. Conversation is liberating. The taboo on talking about money renders us dependent on “experts” who do not necessarily see it as their primary objective to advance our best interests.
The Taboo on Talking About Money Hurts Us Because It Is Often By Speaking Our Fears Aloud That We Gain the Courage to Deal With Them.
Feelings matter more than facts when it comes to dealing with money issues. If you want to become a more effective saver, you need to work through the emotions that are holding you back from doing so. You cannot work through emotions by reading a book or attending a speech. This is why so many turn to financial advisors to help them deal with money problems. People sense their need for hand holding as they do combat with their money problems.
Financial advisors get paid a lot of money for assuming these hand holding duties. And they do not always give the best possible advice. Sometimes that’s because they are compromised by having goods and services to sell. Other times it is just because they do not know the people they are trying to advise well enough.
Our friends know us well. And our friends have our best interests at heart. We should be talking about money with our friends a lot more than we do. They have the ability to give us what we need to deal with the emotions attached to money problems and wouldn’t think of charging a big hourly fee for doing so.
The Taboo on Talking About Money Hurts Us Because We Don’t Adequately Explore the Implications of Our Money Beliefs.
Learning doesn’t come about in a flash. That’s why books can never do the complete job and speeches can never do the complete job and even personal experience can never do the complete job. We learn in stages, little by little, bit by bit.
Talking about money permits this learning process to unfold naturally. You learn something about money and you talk with your friends about it. Then, a few months later you are in a position to build on the earlier insight, and you talk with your friends about it a little more, focusing on a different angle. It’s a good idea to consult books and listen to speeches to get started thinking about money. Nothing beats talking about money for coming to terms with the full implications of a fresh money management insight.
The Taboo on Talking About Money Hurts Us Because We All Need Reassurance When Our Strategies Come Into Question.
Why is it that the communities that congregate on internet discussion boards are sometimes reluctant to permit the voicing of new ideas? One big reason is that many use discussion boards not to learn but for affirmation of ideas already held.
Say that you are following a buy-and-hold investing strategy. There comes a time when the market is behaving in such a manner as to cause you to feel doubts about the ongoing wisdom of your stock allocation decisions. What you most need in such circumstances is a group of like-thinking people to tell you why you made your decisions in the first place and to tell you that everything is allright and that you just need to firm up your courage to stay the course. A discussion board at which a good percentage of the community follows a buy-and-hold strategy provides this.
That’s the power of talking about money. Books tell us the benefits of buy-and-hold; talking about money supplies the reassurance needed to make it happen in the real world. Speeches explain the benefits of saving; talking about money permits the back-and-forth that expands the good idea into a workable plan that inspires changes in human behavior.
The taboo against talking about money has been around for a long time. It is a strong force. We’re not going to overcome it overnight. We do need to begin work tearing down the wall. It holds us back in our efforts to attain financial freedom early in life.