How do people balance their obsession with getting rich and their current finances?
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Transcript:
[Michael] He said, “Michael, is that wrong?” I said, no, that’s not wrong. It’s how you feel and it’s driving your behavior. The question is, is that feeling serving you? [Emily] Um-hmm. [Michael] Hi humans. Welcome back to the About Money podcast. I’m Michael Liersch, behavioral psychologist and head of advice and planning at Wells Fargo. [Emily] And I’m Emily Erwin, head of the Advice Center at Wells Fargo, where we provide research-based advice on topics ranging from retirement to business planning and even longevity. [Michael] On this season of the About Money podcast we’re breaking down trends, we found in the Wells Fargo Money Study and discussing topics from social media millionaires to why people lie and keep secrets about their money. [Emily] So, let’s get into it. Hey, Michael. [Michael] Hi, Emily. [Emily] We, as you know, just ran the Wells Fargo Money Study. [Michael] We did. [Emily] Yes. [Michael] Thousands of Americans. [Emily] Thousands. [Michael] Telling us their thoughts and feelings about money. [Emily] It is a privilege that they would want to share their stories with us. [Michael] Yes. This is the second one. [Emily] It’s pretty impressive. [Michael] Yep. [Emily] And what’s really cool about it is, based on the data, we can now actually take some of our audiences’ responses and really slice them in a way that gives us a little bit more insight into their thoughts. [Michael] Hundred percent. [Emily] And so today’s discussion is about employees of Fortune 500 companies. [Michael] Big, huge companies [Emily] Huge. These are like the biggies. These are. [Michael] Wells Fargo’s on it. [Emily] We are, we are. And actually, we are two of the 32 plus million Americans who are employees of Fortune 500 companies. [Michael] Love working at Wells Fargo. Love talking to our listeners of the About Money podcast. So yes, we are. [Emily] And so, if you think about the Fortune 500 companies, do you know that two thirds of them represent the GDP of the United States? [Michael] Well, because I read it in advance, I did, Emily. [Emily] Oh, well. [Michael] But it is pretty extraordinary. And that’s a lot of product being sold. [Emily] Coming out of these organizations. And more important, it’s not really the organizations, it’s the people who fuel them. [Michael] Yes, exactly. [Emily] 52 of these companies are led by women. That’s an increase of 20% year over year from 2022 to 2023. [Michael] Excellent. So much evidence getting diverse thinking into organizations, corporations, which is a priority for Wells Fargo as well. [Emily] Totally. [Michael] Helps lead to better business decision making and outcomes. [Emily] That’s exactly right. And it and it makes it feel different for their employees. And that’s what we’re going to talk about today. [Michael] Excellent. Let’s do it. [Emily] Okay. So, we know from the Wells Fargo Money Study. [Michael] Yes. [Emily] 45% of employees said that they’re sometimes obsessed with getting rich. [Michael] Only 45%, Emily? Compared to what? [Emily] Compared to 37% of all respondents. [Michael] I’m surprised it’s not 100%, honestly, but I got it. 45%. Okay, say they obsess about getting rich. [Emily] Okay. [Michael] Do you? [Emily] I mean, a little bit. It’s like it’s like a dirty little secret. But yes, I’m willing to say it out loud. Why not? [Michael] I mean it’s why the state lotterys exists. [Emily] Yes. [Michael] Right. And everyone has a little fun with it, right? Yes. Okay, so? So fine. [Emily] I’m not giving back my paycheck. [Michael] We’ll say 45% of Fortune 500 employees say they sometimes obsess. I got it. [Emily] Yes. [Michael] And maybe we’re not obsessed. So I get it. Compared to 37% of adults. What? What do we think that means? [Emily] Do you know what I think it means? I think it means that people are, like, really driving themselves, right? It’s like they’re looking around. Maybe they’re looking at the C-suite. They’re kind of seeing what’s possible in their careers, and they’re like, this is going to happen. This is going to happen for me. [Michael] I, I buy into that. I think the other element possibly in that is they see to your point that that hard work can yield outsized financial outcomes. [Emily] That’s exactly right. [Michael] By adding value in the marketplace. You know, winning. You know, that competitive spirit. So okay. Got it. All right. [Emily] Yes. [Michael] What’s our next one? Can I do the next one? Is that OK? [Emily] You may, you may. [Michael] All right, perfect. So, the other one. Well, actually, this is kind of my favorite one. Is that okay? [Emily] Yeah. [Michael] And you knew it would be. And all our listeners know that because I’m a behavioral scientist, after all. 44% of Fortune 500 employees say they admire social media millionaires. I don’t know why we didn’t ask billionaires, but fine. Millionaires. Versus 34% of all adults. Okay. Wow. That one’s a little bit more surprising. What do you think that one’s about? [Emily] It’s not really perplexing when you think about it. Like, everyone has a bad day at work. [Michael] Yeah. [Emily] Everyone looks on social media, and it’s like, you know what? [Michael] Yeah, I got you, scrolling. [Emily] I might be more into that today right than that bad day at work I just had. Even though that bad day at work can still feel good, right? We all have those moments where we can have, like a little bit of an out-of-body experience. [Michael] Yeah, okay. So, we’re kind of focused on our social media. Maybe the other one is an element of respect that, you know, social media just a decade or two decades ago wasn’t really monetized. [Emily] Mm-hmm [Michael] And now you have these human beings who are a point of sale, you know, propagating information and advice in a completely brand-new format and actually yielding outsized financial outcomes because of it for themselves. [Emily] Sort of like little mini Fortune 500 companies. [Michael] Yeah. Interesting. Okay, so something to learn there so I can see the admiration. [Emily] MM-hmm. [Michael] As long as it’s controlled, authentic, best interest type of advice. Got it. [Emily] Totally. [Michael] So, what’s our next one. [Emily] Okay. 31% of Fortune 500 employees sometimes overspend to keep up with others around them. [Michael] Okay. [Emily] Compared to 23%. [Michael] Also, I’m surprised that data point honestly isn’t a little higher. I think just with human beings in general. I mean, can I ask you a personal question? [Emily] Yeah. Of course. [Michael] Sure. [Emily] Yeah. You ask me a lot of personal questions. [Michael] I do, I do, I do, especially about money, because that’s like my favorite. So, have you ever overspent to keep up? [Emily] Oh, totally. [Michael] Okay, so have I. I think, when I think about it, I wonder if our listeners would ask themselves, you know, 23% of adults say they sometimes overspend to keep up with others around me. I mean, I would say I’m thinking over the past month or two, I’ve definitely done that at least once. [Emily] Okay, so my like soft spot is accessories. [Michael] Okay. And what’s an accessory? [Emily] Well, I define accessory as anything that is in my hand or. [Michael] Okay so a handbag. [Emily] Right. [Michael] Like earrings. [Emily] Adornments of some type. [Michael] Okay. Sure, okay. [Emily] And so, I have been known to, because it’s maybe not like, you know, totally valued by everyone in our family, someone who just kind of splurges a little bit on something. [Michael] So, my version of that is shoes. [Emily] Okay. You’re a shoe person. That’s okay. [Michael] Yes. I love shoes. Tennis shoes. Everyone at work knows that. I’m a, I have a lot of tennis shoes. [Emily] Okay. All right. [Michael] So? So. Okay, so. But 31% of Fortune 500, company employees, sometimes overspend to keep up with others around them, versus 23% of adults. So, the idea here is, is the difference. So, these are Fortune 500 company employees are admitting that they do that more. What do we. Do we think that’s because of the work life competition and wanting to show up and present yourself, you know, in a better or more effective way. What do you think that’s about? [Emily] I think there’s a little bit of that. [Michael] Okay. [Emily] I also think there’s a little bit of when you think about the comparison. [Michael] Yeah. [Emily] You’re really thinking about maybe business owners or small businesses. [Michael] Okay. [Emily] Right. And in that environment, there’s probably a little bit more of a black box. [Michael] Okay. [Emily] Maybe it’s a little bit more cowboy country. Whereas Fortune 500 companies tend to be maybe a little more structured. [Michael] Okay. [Emily] Right? In, in level, in compensation. And, and you want to be able to kind of demonstrate, I think a little bit of, “Hey, this is who I am”. This is, “I’ve arrived.” [Michael] So no matter what your level, executive presence. [Emily] Right. [Michael] You know, lean into the culture. [Emily] Correct. [Michael] Even if it is tennis shoes and cool like a cool, neat, modern outfit. I’m showing my age here, but that’s okay. [Emily] Hey, hey. Or a handbag and jewelries. [Michael] Or the power suit. [Emily] Right. Whatever it is. [Michael] Okay. Yeah, I got you. All right. And sometimes, you know, there’s cool, toned down outfits cost more than the more traditional versions of them. By traditional, I mean, you know, like 30, 40 years ago. [Emily] That’s right. [Michael] You know, the power suits that we all used to wear. [Emily] The double breasted. [Michael] Yeah, that men and women used to wear. Right. [Emily] Yeah. [Michael] We all had those in the 80s. Yeah. Right. [Emily] With shoulder pads. [Michael] I’m dating myself. Those are back in, by the way. Just FYI. [Music] [Michael] What is that financial goal you just can’t get out of your head. Maybe it’s having enough for that dream trip to Rome or those perfect seats at The Sphere. How do you plan to get there? LifeSync in the Wells Fargo mobile app is your destination for setting, tracking, and taking steps to help you reach your financial goals.You can see an overview of your finances with snapshot to know where you’re at with your money, and explore content in the news feed. From exclusive clips of this podcast, to quick hit, videos and articles. If you’re a Wells Fargo customer, check out LifeSync for a simple way to watch your progress. Keep yourself accountable and celebrate milestones along the way.
[Emily] This is interesting to me. 67% of Fortune 500 employees sometimes judge themselves based on money or lack thereof. [Michael] Okay, [Emily] As compared to 57%. [Michael] Hmm. Which relates to the other ones too. So, I think our hypotheses aren’t so far off. Which is, it’s that competition. Am I making it? Am I successful? Am I being valued? Am I spending or using my money in the right way relative to my peers in this organization? You know, where is this all going to take me? [Emily]Mm-hmm. [Michael] I gotcha. So I can see that self-judgment. I’ve done that to for sure. [Emily] Totally. Totally. [Michael] For sure. So, there’s a lot of advice in here, Emily. [Emily] There is a lot of advice. There’s a ton of advice. And what’s interesting is when I think about the Fortune 500 employees in particular, you know, the obsession with getting rich. [Michael] Yeah. [Emily] You know, for everyone, their money story starts from a different place, Michael. [Michael] Yes. [Emily] And we’re talking about Fortune 500 employees. Everyone who’s maybe starting their career to mid-level, to maybe the most senior ranks. What would you say to someone as they’re starting the professional arc? Like, how do they tie financial behaviors and maybe not dampen, but maybe balance out the obsession with getting rich with their finances? [Michael] What’s interesting that you ask the question in that way, because it’s a, again, our listeners know this, as someone who’s studied a lot of human behavior and motivation. I, I would say, you know, I’m just thinking about a particular client that I met with who was always, you know, focused on making money and, and he said, “that’s why I wanted to be an executive.” [Emily] Mm-hmm. [Michael] And ultimately, he became his own business owner, ran his own corporation. That wasn’t Fortune 500 level. And he said, “I’m always hungry. Because I grew up poor and all I want to do is make more and more and more money.” He said “Michael’ is that wrong?”. I said no that’s, that’s not wrong. It’s how you feel and it’s driving your behavior. The question is, is that feeling serving you? [Emily] Mm-hmm [Michael] Or not. [Emily] Mm-hmm. [Michael] And only you can answer that question. And I’m, you know, I’m a cognitive psychologist but I’m not, no one’s laid on a couch in front of me and shared their feelings. That’s not the kind of, you know, psychologist I am. And I said that to him. I’m effectively a mathematician. Right. So, I look at what you’re trying to accomplish, your behaviors and whether their behaviors achieve what you’re trying to accomplish. [Emily] Mm-hmm. [Michael] That’s my goal here. And what he decided is it actually was serving his business enterprises, but not necessarily how he was structuring his personal wealth. [Emily] Mm-hmm. [Michael] So, I would say that’s my first point of advice on that first one. [Emily] Mm-hmm. [Michael] Which is you know what. What is that? Have you looked at those in very distinct ways? You know, how are you making money in your business endeavors? You know as a Fortune 500 employee. And how is that also relating to how you’re storing, saving, investing, you know, planning for your future and your personal balance sheet? And are those two things aligned or misaligned. [Emily] Mm-hmm. [Michael] And we don’t even need to get into how you’re spending your time and energy, you know, with your colleagues, with your family, you know, all those types of things. You know, your health and wellness, you know, are you traveling a lot and taking care of yourself at the same time? So, there’s just a lot in that. But that was my open question to him, and it really forced an important conversation with his family. And he actually didn’t have a spouse, at the time. [Emily] Mm-hmm. [Michael] Although he was planning on getting partnered with somebody. [Emily] Mm-hmm. [Michael] And so, it just opened the door to a lot of great conversations and also a lot of great conversations with his adult children. So, I would just throw it out there like that obsession with getting rich. I think that’s fun. [Emily] Yeah. [Michael] Like, why not lean into it. The question is, is it serving you or not professionally, and your personal balance sheet? Are those aligned? And ultimately, if they are, fantastic, keep doing it. If they’re not, or some adjustments need to be made, really think about then what are your goals, financially speaking and professionally speaking, and make those changes in alignment with a financial or in collaboration with a financial professional and the people that you’re collaborating with. [Michael] Does that resonate with you? [Emily] That makes total, it totally resonates with me. And, you know, I think there is for many a perception of, you know, what is reality and what is kind of the smoke and mirrors. [Michael] Yeah. [Emily] Right. And when you come into work every day and you’re your best self and you present yourself a certain way, you know, you can own who you are as that Fortune 500 employee. And you just don’t know everyone else’s money story and what their motivation is. [Michael] You don’t. Right. [Emily] Right. It’s impossible to know unless you really dig into it and you know, you have an open conversation about it. I think that for many of us, wealth tends to be kind of the demonstrative reflection of what we see our success to be. [Michael] It’s like what’s my number. [Emily] It’s what’s my number. [Michael] Right. [Emily] What’s my number? How am I projecting that number? And do I feel like, do I feel good about the projection. And so… [Michael] This is true. This gets like with the bougie… [Emily] Yeah, a little bit. [Michael] …broke kinda concept. [Emily] A little bit. Right. [Michael] Did you want to tell our listeners what bougie broke is? [Emily] Oh totally. Yeah. So, when you’re essentially thinking about hey bougie broke, I’m living on a budget, but I’m projecting this lifestyle that’s ostentatious and fabulous. Meanwhile, everything’s being kind of taped together and band-aided and all the good stuff. [Michael] That’s how I grew up. [Emily] Right? But let me tell you, it looks good. [Michael] Yeah. [Emily] It looks good, Michael, right? [Michael] I gotcha. [Emily] And we see this and I think part of it is our finances are so tied to “did we make it?” Right? Did we make it at work? Have we made it with respect to the number that we anticipated? [Michael] Yep. [Emily] Have we been able to pay down the student loans if we have them? [Michael] Yep. [Emily] Have we been able to put the kids in the school we expected. So as a Fortune 500 employee. [Michael] Yeah. [Emily] We’re dealing with life. [Michael] Yeah. [Emily] And we’re looking at everyone else. And we might be scratching our head and wondering, like, well, they seem to be able to do all those things. What decisions are they making that are different than mine? [Michael] Well, I think… [Emily] And that makes it? [Michael] I’m with ya. [Emily] You’re in a little bit of like a, this, like you’re like, we’re all kind of the same and yet we’re different. Head scratcher. Why is that, right? [Michael] Well, so I think we should. [Emily] Right? [Michael] We I think we should refocus then everyone’s energy and say, okay, so I’m an employee, how should I then… [Emily] Right. [Michael] Just be more internally focused, less focused on all of that. [Emily] Correct. Correct. [Michael] So, let’s go through a couple tips. So, if I’m an employee at a Fortune 500 company, regardless of what level I’m at, there are some certain things that people should absolutely be leaning into. [Michael] Right. Your employee benefits. [Emily] Hello. 401(k). I’ve never given back a paycheck. Have you ever given back a paycheck? [Michael] No. [Emily] Okay. So, if you can do it 401(k) matches when they’re available to you. [Michael] Yes. [Emily] Huge. [Michael] Absolutely. [Emily] Tuition reimbursements. [Michael] Yes. There are also, you know, restricted shares. [Emily] Yes. [Michael] That you may have the, you know, really option to look at, lean into, figure out how you ultimately want to monetize those. [Emily] Absolutely. [Michael] When they vest. [Emily] Correct. [Michael] There’s deferred other types of deferred compensation. So really looking at your entire package. [Emily] Totally. [Michael] Where you could benefit financially speaking in a way that if you don’t read that whole package, choose the right or select the right benefits, you might be not afforded those opportunities or benefit from it as much as they can. So, employee benefits, key. [Emily] Mm-hmm [Michael] The second one from my lens at least, Emily, is really to focus on whether you’re financially solvent on a month-to-month basis and then try to progress to a year-to-year basis. [Emily] Mm-hmm. [Michael] Because what I’ve seen with clients is that gives them the confidence to take more professional risk, not negative risk, right? [Emily] Yes [Michael] But you know what I’m talking about. [Emily] But the risk to be able to say yes. I think that’s the risk that they’re accepting, the bigger, getting on stage for the bigger speech, taking on the project for the executive committee, maybe taking on something where they only actually know how to do 60 to 80% of the stuff that’s on the job description. [Michael] Yeah [Emily] That’s okay. [Michael] You learn on the job. [Emily] And you learn on the job, but you can say yes in those circumstances then. [Michael] Because if you failed, you’d have a cushion in front of you. [Emily] Correct. [Michael] And failure could mean, you know, not getting a great review, you know, even maybe even losing your job. But you took the risk because on the other side of it, [Emily] Is huge upside. [Michael] …you might get that promotion, right? [Emily] Right. [Michael] Or take it to the next step. Okay. So, I think we covered this off, thought a lot about this. Any last thoughts from you? I have one last thought. [Emily] Oh, no. Give it to me. [Michael] Okay, so, my last thought here is, this is to me about framing. And instead of framing yourself in the context of the other employees you’re working with, really shift the focus to your own financial goals. [Emily] Mm-hmm. [Michael] And I know that sounds like Captain Obvious, but I think it’s really important because it’s where we started. There are no right and wrong answers. It’s just who you are, how you feel, what you’re trying to accomplish. Make sure you’re really using that as your anchor and not everything that you see around you. Because to your point, who knows if it’s real or not real… [Emily] Totally. [Michael]…in terms of their own personal finances. [Emily] Thanks, Michael. [Michael] All right. [Emily] Thanks for listening to this episode of the About Money podcast. Share this episode and follow our channels on Spotify and YouTube to stay up to date on the latest money conversations. [Michael] Again, I’m Michael Liersch. [Emily] And I’m Emily Irwin. [Michael] Talk soon, Humans.Investment and Insurance Products are:
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About the study: On behalf of Wells Fargo, Versta Research conducted a national survey of 3,657 U.S. adults and 203 U.S. teens age 14 to 17. Sampling was stratified, and data were weighted by age, gender, race, ethnicity, income, and education to achieve accurate representation of the current population based on estimates from the U.S. Census Bureau. The survey was conducted from September 5 to October 4, 2024. Assuming no sample bias, the maximum margin of error for full-sample estimates is ±2%.
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