Money for the Rest of Us

Two days ago Your Credit Advisor posted a list of 25 Personal Finance Myths. This was a great list and I highly recommend that you take a look at it. My favorites include:

5. Money makes you happy. Money makes you unhappy.
7. Becoming rich is hard work.
14. Saving is hard, and I don’t make enough.

But, what I found more interesting about this post was the following statement:

“Someone once said that if you were to make a list of your 10 closest friends and acquaintances and order your earnings and theirs from smallest to greatest, you’d probably find yourself somewhere near the middle. All that this means is that we are subtly influenced by our friends, even when we’re not aware of it, especially in matters of money. Being somewhere in the middle is probably more comfortable for the average person.”

I don’t know if My Credit Advisor meant “earnings” or net worth. I did this exercise and found myself to be roughly in the middle in terms of earnings, but much closer to the top in terms of perceived net worth. (I know for a fact that the majority of my friends have little or no savings and no investments.)

I completely agree with the statement that “being somewhere in the middle is probably more comfortable.” However, I also think there is more to this. I think that most of us are in the middle because we really like appearing average. We like not standing out. Personally, very few of my friends have any idea of how much I have saved or invested. I don’t want to share this information with them because I don’t want to appear exceptional. I like being in the middle.

But what would happen if I told them how much money I have saved? I don’t know. I think I don’t tell them because I fear that they would reject me because I’m no longer “like them.” A main sociological theory is that we are friends with people who are similar to us. By telling my friends that I am essentially “rich” (in their eyes) I would fundamentally alter our friendships because one of their perceived notion that I too live paycheck to paycheck with no emergency fund. They would no longer understand that I also struggle to make ends meet, but that’s only because I don’t see the money I save.

But what would be the positives of telling my friends that I save and invest? For starters, they would probably see that it’s entirely possible to live on a small salary and still invest. I could teach them about saving and investing and spending more wisely. I know this would help them, but I still hesitate to tell them. Why is our culture so afraid of money that we don’t even talk about it with our closest friends?