I suspect that the common error is not the one you identify, but rather its reverse; it strikes me that there are significantly more people who care too much about money than there are people who care too little about it.
While posts like this are very useful for those who care too little about money (because, let’s be real—money is pretty useful!), I consider them somewhat dangerous for those who care too much about it.
In other words, I like this and think it’s great for the intended audience, but I think it may be harmful to an unintended audience who will nevertheless read it anyway.
Having had it pointed out, though, I wonder if this is largely a salience thing. Stereotypical Rich Assholes (TM) get a lot of news coverage, while the dubious career-planning decisions of the mass ranks of recent college grads get very little attention. However, I personally know an awful lot of those recent college grads who made dubious career-planning decisions.
And I think it’s even less plausible that the people on the bottom half of the income distribution care too much about money. To a large extent not worrying much about money is a luxury of the rich. Poor people may often have unrealistic ideas about the best way to become better off financially (winning the lottery, making it in sports / entertainment) but I doubt caring too much is their problem.
I share your guess that more college-age people care too little about money than too much.
On the other hand, I seem to recall seeing figures suggesting that a startlingly large fraction of good students from the US’s elite universities go into finance, which is (assuming for the moment that Izeinwinter’s prophesy of doom turns out to be incorrect) an excellent choice from a money-optimizing perspective and probably a pretty poor choice for most in other ways. That might indicate that all those people have carefully considered their values and their career prospects, and have made a rational decision to prioritize earnings early in their career—or it might indicate that they’ve just jumped for the highest-paying option they can see without considering other issues. I’d guess the latter is nearer the truth.
If what I seem to recall is actually correct, and if my guess contingent on that is also correct, then there’s a sizeable population of intelligent people caring too much about money rather than too little. I’m pretty sure the population in question is statistically pretty wealthy to start with, and as you say caring less about money is easier for the rich (and also probably more rational for them, unless they’re very altruistic[1]), which makes it more likely they’re caring too much about money.
[1] My meaning may not be perfectly clear here, so I’ll explain. How much you should care about money depends on how much you can influence how much money you have and on how much difference that makes to your utility function. If you are already well off, the former is bigger (more opportunities) and the latter is much smaller if you’re selfish (diminishing returns) but not if you’re altruistic (there are enough starving Africans, un-malaria-netted beds, etc., to absorb all the money you can throw at them). So selfish people should probably care less about money if they’re rich, and altruistic people should probably care more about money if they’re rich. Of course most people are somewhere in between...
I think this post is wrong and dangerous, but I like it a lot and I think you’re bold to post it. Hopefully it will help more than it harms.
Thanks. I think.
It would be more helpful if you said why you think it’s wrong and dangerous, though.
I suspect that the common error is not the one you identify, but rather its reverse; it strikes me that there are significantly more people who care too much about money than there are people who care too little about it.
While posts like this are very useful for those who care too little about money (because, let’s be real—money is pretty useful!), I consider them somewhat dangerous for those who care too much about it.
In other words, I like this and think it’s great for the intended audience, but I think it may be harmful to an unintended audience who will nevertheless read it anyway.
Huh. Interesting. Wish I’d thought of that.
Having had it pointed out, though, I wonder if this is largely a salience thing. Stereotypical Rich Assholes (TM) get a lot of news coverage, while the dubious career-planning decisions of the mass ranks of recent college grads get very little attention. However, I personally know an awful lot of those recent college grads who made dubious career-planning decisions.
And I think it’s even less plausible that the people on the bottom half of the income distribution care too much about money. To a large extent not worrying much about money is a luxury of the rich. Poor people may often have unrealistic ideas about the best way to become better off financially (winning the lottery, making it in sports / entertainment) but I doubt caring too much is their problem.
I share your guess that more college-age people care too little about money than too much.
On the other hand, I seem to recall seeing figures suggesting that a startlingly large fraction of good students from the US’s elite universities go into finance, which is (assuming for the moment that Izeinwinter’s prophesy of doom turns out to be incorrect) an excellent choice from a money-optimizing perspective and probably a pretty poor choice for most in other ways. That might indicate that all those people have carefully considered their values and their career prospects, and have made a rational decision to prioritize earnings early in their career—or it might indicate that they’ve just jumped for the highest-paying option they can see without considering other issues. I’d guess the latter is nearer the truth.
If what I seem to recall is actually correct, and if my guess contingent on that is also correct, then there’s a sizeable population of intelligent people caring too much about money rather than too little. I’m pretty sure the population in question is statistically pretty wealthy to start with, and as you say caring less about money is easier for the rich (and also probably more rational for them, unless they’re very altruistic[1]), which makes it more likely they’re caring too much about money.
[1] My meaning may not be perfectly clear here, so I’ll explain. How much you should care about money depends on how much you can influence how much money you have and on how much difference that makes to your utility function. If you are already well off, the former is bigger (more opportunities) and the latter is much smaller if you’re selfish (diminishing returns) but not if you’re altruistic (there are enough starving Africans, un-malaria-netted beds, etc., to absorb all the money you can throw at them). So selfish people should probably care less about money if they’re rich, and altruistic people should probably care more about money if they’re rich. Of course most people are somewhere in between...