Aweh dearly beloved fellow ruminants & groupies
When I introduce myself to students, I teach, I deal with the issue of white privilege straight away. I confess to being white and privileged. Relatively speaking and in the South African context, I am very privileged. You only need a net worth of about R4.2 million ($233 000) to be in the top 1% in South Africa. I certainly would not consider someone, particularly of my age, with a net worth of R4.2 million to be rich. You could not be financially independent with this amount of money. In the USA to be in the 1% you need a net worth of $10.8 million which is 46 times the number in South Africa. It is generally considered to be vulgar to discuss your personal finances, but I will confess to not being part of the 1% in America. Not by quite a long way.
What does it mean to be rich? Who decides if you are? Do other people make that judgment for you, or do you decide for yourself? Financial institutions classify people with $1 million of liquid assets as high net worth (HNW) and ultra-high net worth (UHNW) as $30 million.
Let’s consider Lloyd Blankfein, 68, the former CEO of Goldman Sachs one of the most powerful financial institutions in the world. Goldman Sachs played a significant role in the 2008 financial crisis and has famously been described as, “a great vampire wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”. Perhaps this judgement is a bit harsh and these days Goldman Sachs isn’t doing nearly as well as it did. But Lloyd Blankfein retired from Goldman Sachs in 2018 and one can now debate his legacy. How rich is Lloyd Blankfein? According to Forbes, Blankfein is currently worth $1.1 billion and is number 2405 on the world’s rich list. This means he is in the top 0.00003% in the world. I think that if you randomly polled any number of people, they would classify him as rich. I would call him stupendously rich.
Does Blankfein see himself as rich? Apparently not. According to him, he insists he’s well off not rich. Is he just bullshitting or perhaps we need to delve into why he thinks this. Perhaps it has to do with how we see ourselves within our peer group and the peer group we associate with. Throughout his high-profile career, he has interacted with the billionaire club and looks upward within this exclusive club. There are about 2700 billionaires in this club, and he is near the bottom. If he does not manage his money well and carefully relegation is a possibility. He is very unlikely to ever reach the elite billionaire club who have $10 billion or more. Spare a thought for poor Lloyd who appears to have some anxiety about maintaining his membership in the most exclusive club in the world.
Let’s now go down many notches in the wealth ladder and consider chapter 8 in the excellent book, “Fooled by Randomness” by Nassim Taleb published in 2005. I highly recommend this book but for those of you with short attention spans, including me, there is a good summary here. The chapter relates a story about a hard-working couple earning $500 000 ($773 000 in 2023 dollars) per year. The husband has a high paying job working as a corporate lawyer. To me, this is a very big income. So, what is the problem? They live in an exclusive apartment building on Park Avenue in Manhattan, and they are the poorest occupants in the building. All their neighbours are richer than them and have lifestyles associated with that wealth with holiday houses in the Hamptons and their children attending the most expensive schools. Their life is a very difficult struggle to try and keep up and they lead an anxious and stressful life. They feel poor compared to their peer group. So, Taleb suggests that the fastest and easiest way to get rich is to start socialising and living with people poorer than you. Your position in the dominance hierarchy will improve and you will lead a much less stressful existence and ultimately be happier.
How many people follow this advice? Is life not about achieving as much as you can and living your best life? Are you, not a loser if you settle for mediocrity? How is our family doing? I don’t interact or socialise with any dollar billionaires. It’s not that I have anything against them as a group it’s just that I don’t move in those circles, and I guess I’m of little interest to them. But many of my friends and associates are richer than us, some marginally so and a few a lot. But many of my friends and associates are not richer than us. Do I aspire to compete and be more like my richer friends? Not anymore. I have limited time left on this planet and that is worth far more to me than striving to compete with those richer than me.
I have been spending more time in the poorer communities that dominate South Africa. Does this make me feel richer? Not really, but it does make me grateful for what we have.
Why do we engage in certain actions that define our lives? I have always loved the Talking Heads song, “Once in a Lifetime” from 1980. Do we aspire to acquiring a large automobile and a beautiful house and then more of the same in a never-ending cycle? Do we live life according to the drudgery of social expectations? Spare a thought for poor Lloyd who is trying to keep up. It is worth repeating the opening verse of the song:
“And you may find yourself living in a shotgun shack.
And you may find yourself behind the wheel of a large automobile.
And you may find yourself in another part of the world.
And you may find yourself in a beautiful house, with a beautiful wife.
And you may ask yourself, Well, how did I get here?”
Well dearly beloved readers how did you get here, how rich are you and, how rich do you feel?
Thank you for all the ideas and comments. I really appreciate them and please keep them coming.
Regards
Bruce
Ruminant Pink Friday 