In grad school, I was the RA (resident assistant) of a 50-person house. We had a house budget that we had to decide how to spend on things like a house party or better food.
HOLY SHIT. I’ve never seen a worse side of humanity than when a small amount of money being pooled has to be used for a group decision. This was when I first learned that whenever a group has to decide how to spend its money, everyone loses their mind.
Whiny kid: “I don’t want to use my $20 for a house party … I don’t drink.”
Staff: “Um, we’ll be serving Coke/Pepsi/non-alcoholic punch too.”
Whiny kid: “Well … uh … I still don’t want a party.”
Imagine this conversation happening about 90 times with increasingly angry college kids. I tried to calmly explain how house dues work — you contribute a little bit of money, and the staff votes on how it will be spent. Seemingly normal people turned into monsters over $20.
My room was on the second floor so, unfortunately, jumping out head first wouldn’t have ended the pain. I just stared, like a Vietnam vet’s thousand-yard stare, for hours upon end. People weren’t even willing to give up a LITTLE bit of money for the greater good.
Years later, I’d learn that these irrational attitudes don’t change when we grow up — the amounts just get bigger.
Take taxes as an example: “I WOULD be happy to pay my taxes, but not if they spend it on X.”
(This is EXACTLY why I don’t listen to anyone’s stupid complaints about their tax money. In college, I learned how people act when the stakes are low.)
We may not understand how house dues or billions of dollars of national funding are spent. But we sure know how angry it makes us when we see money taken out of our paycheck every month. That anger — count how many times you’ve heard someone ranting about their taxes — is so much easier than actually learning how things work.
Here, I’ll show you. Pop quiz: How much do we spend on foreign aid? (Just ballpark it.) If you ask a random American, the average answer is 31%.
The reality: It’s actually less than 1%.
Similarly, if you ask people if crime is up, they’ll say yes. (Wrong.)
I’m picking these examples not only because people are wrong (which is fine, nobody can be expected to know everything), but people feel VISCERALLY ANGRY and PERSONALLY AFFECTED by them. Just like that lame college student who wouldn’t have a party under ANY CIRCUMSTANCES.
Like taxes — the topic that nobody understands yet everyone “feels” mad about. To show you how little people understand about taxes, look at this:
You are wrong and will be wrong for the next 50 years. But I understand, you “feel” right.
Let’s examine the psychology of this guy. He genuinely believes that because he got a raise, he now makes less money than before. He is wrong.
(Dear guy, it’s called marginal taxe—ah, forget it. At this point, it’s impossible to have a logical discussion. That’s why approximately 239,283 of you are getting your spindly little fingers ready to write me an angry email. Don’t bother.)
The most insane part is, he will probably believe this for next 40 years of his life. Imagine him at a party when someone brings up taxes. You and I can totally see this guy launching into a rant about how it’s not fair, how he’d happily pay his taxes if there wasn’t so much “waste,” and how there’s no incentive to work.
He’s wrong, plain and simple.
So what’s going on here?
It’s easier to get angry than to get educated. I guarantee this guy has never read a single book on personal finance. And, to put it charitably, no CEO has ever decided not to grow his business because of taxes.
As the famed philosopher Gotye said, “You can get addicted to a certain kind of sadness.”
Preach, Gotye. Preach.
But for a lot of us, it’s not sadness. It’s anger. ‘I’m ANGRY that I have to pay for dates.’ ‘I’m ANGRY that I have to pay so much in taxes.’ ‘I’m ANGRY that baby boomers are stealing our future.’
Look, I’m not the guy who tells you not to get mad. I’ve made it a life skill to get mad at thousands of things. In college, I created an entire blog called THINGS I HATE!!
But I also know there’s only a certain amount of rage we can all hold. Is ranting about national tax policy really going to change anything? No, of course not.
You’d be better served to focus on being mad at Kate for stealing your lunch from the fridge every Monday at work. Why don’t you do something about her?
Or why not take a look in the mirror and get mad about not following through on the things you said you would?
I got mad about the personal finance industry lying to everyone and decided to do something about it. In 2004, I started a blog that nobody read and I just kept at it, week after week, until it finally started to break through. But it took me 13 years to get from there to here.
Think about the chain of changes this guy would have to go through to change his view:
- “Hey, I’ve noticed I get mad about taxes A LOT.”
- “Hey, I’ve realized I don’t actually know much about taxes.”
- “Hey, I’m going to do some research, find the best 2-3 books on taxes, read them, and develop an educated opinion.”
- “Hey, I might have been wrong.”
- “Hey, I’m going to stop ranting about taxes and talk about something else.”
Let’s just say … this is unlikely. You’d be more likely find me dressed in leather chaps dancing around a fire with a bunch of unemployed life coaches than see this guy doing even one of those things.
Don’t just laugh. It’s exactly the same for you. Maybe not with taxes, but you have an opinion that’s become part of your identity, that you’re viscerally angry about — and that you don’t really know anything about.
Will you recognize it?
Will you change it?
Will you make the decision to focus on the things you can control, pick them carefully, and do something about it?
And only a few will.