Hey, guys. It's Chelsea from
"The Financial Diet." And this week's
video is sponsored by Haven Life Insurance Agency. And this week, we are going
to be diving deep into a topic that we rarely touch here on
TFD because our primary focus is making everyone feel more
comfortable with money and speaking to people from
all over the economic spectrum. And quite frankly, if
you're a rich person, you probably don't
have all that much of a need for this
channel, and that's fine. That's your journey. But sometimes, both
because rich people are a topic that have
quite a lot of relevancy in a country where they
control so much of everything, but also because, frankly,
they're a fascinating case study in so many different
elements of life-- sociology, gender dynamics,
personal happiness-- that from time to time,
it's kind of worth talking about rich
people here on TFD. And I want to speak
about it purely from my own personal,
somewhat unique experience. Many of you may not
know this, but before I got started in a
career in media, I somewhat unintentionally,
but also looking back, probably subconsciously
intentionally, worked for a lot of rich people. From the age of
about 10 onwards, I lived in a town called
Annapolis, Maryland, which is a pretty fancy, waspy sailing
town on the Chesapeake Bay, where there are a lot of
very, very high earners. And I think also because I
had grown up pretty poor, and when we lived in Maryland,
we were pretty middle class compared to a lot of the people
around me who had so much, I think I always had a
fascination with rich people, an anxiety about them. I wanted to be them, but
I also resented them. It was all very complicated
and tied up in the fact that Chelsea of that
age didn't really have a whole lot of self-esteem. But also, quite frankly, if
you were working, for example, in the service
industry in Annapolis, chances are, even if you
didn't expressly intend to, you were going to come across
a lot of very wealthy people in your work. But over the years, I was also
a nanny for several very wealthy couples. I was a personal
assistant/errand runner for a very, very wealthy man
who worked in Washington, DC and also had an art studio. I worked at a yacht club in
Annapolis, which is essentially a country club where
one of the requirements is that you have a boat. I was a secretary there,
which I'll get into later, but secretary at that place had
a very loose interpretation. I pretty much did it all. And frankly, on some
level, looking back, I think that those experiences
shaped me in a lot of ways and created the relationship
that I now have with money. I think that now, because I
had such an up close experience of what having a lot of
money can do to people on a psychological level,
it's one of the reasons why, for example, even though I
own the majority of my company and can, frankly, pay myself
whatever the hell I want, I choose to pay myself less
than other people in the company and keep the employees generally
quite on par with what I earn. I also am someone
who no longer has any kind of a fear of seeming
cheap or saying no to things for financial reasons. And above all, I am
extremely invested in the concept of
financial transparency. There's basically nothing
about the finances of my business or my
life that I wouldn't feel comfortable
sharing or don't already share on Twitter
because I realized that one of the most
insidious things about wealth is how keeping it
secret can make you less accountable to the
community that you live in, and therefore make you more
removed from the people with whom you share this planet. But more on that later. Long story short is that over
the course of several years from about age, like,
16 to age, like, 22, I worked for a lot of very
high net worth individuals, and I learned a lot from it. So combining that with some
more legitimate, less anecdotal research, I've compiled
a "6 Secrets That I Feel Comfortable Sharing
Based on My Experience with Rich People." Number 1 is probably the one
that consistently felt the most jarring to me when I was
working for wealthy individuals, and that is rich
people don't care what they look like in front
of you if you're not rich. And by this, I mean the
behavior that I saw frequently exhibited, whether
it was members of the yacht club
that I worked for, the couples that I nannied
for, the people that I was an assistant for, the customers
that I had in various food service jobs-- the behavior that they clearly
felt comfortable exhibiting was what I would call
really, really embarrassing. For liability
reasons, I'm not going to get too into
some anecdotes at, for example, the yacht
club I worked with. But let's just say that
one of the rules of being a secretary at
this yacht club was you had to stay at your desk
until the last member left the club that night. For me, that often meant
literally being at the desk until 3:00 in the morning
because some of the members were having their very,
very boozy poker game, or were having a party,
or were doing something that probably didn't want to
end before 3:00 in the morning. And let's just say that the
version of those people that would come by the secretary's
desk to get the keys to their cars to go home--
which is, by the way, in and of itself an
entirely different issue-- were not the best
version of the people that they probably demonstrated
themselves as, say, at work or with their friends. When I worked in
restaurants that had very, very high net
worth individuals frequenting the restaurant,
the way that they would treat the female staff-- for example, once,
when I was a hostess at a restaurant like this-- was almost as if they were
completely entitled to you. They would touch you. They would ask you
inappropriate questions. They would ask you
to drink with them. They would say really
inappropriate things. And even some of
the couples that I nannied for would have
knockdown, drag-out fights or say horrible things
about other people or other issues in front of
me as if I weren't even there. And it's funny because
I, looking back, can realize that a lot of
this really atrocious behavior that these wealthy people felt
entitled to exhibit in front of someone that they knew did
not have nearly as much as them and in many ways was working for
them is because, on some very inherent level, they did
not see me or the people that I worked with as having
the same level of value as they did. In fact, at the yacht club,
there was once a big uproar because several of the yacht
club members, who, I guess, had been frustrated at how
frequently the employees were quitting because of some of
the behavior that was going on, started a group
amongst themselves that was called YACHT, which
was an acronym for Yachtsmen Against Constant Help Turnover. So hopefully, that
anecdote gives you an idea of where we were seen
in all of this as the help. But it turns out that
the research actually does indicate that as
individuals get more and more wealthy, they actually
start to even notice and perceive the people
around them much less, in many cases
because they simply don't have to because
their money protects them. In fact, one NYU team had a
group of 61 study participants walk down a city block in
Manhattan wearing Google Glass. The pedestrians, who were
told that they were testing the technology, later
filled out surveys asking them to self-identify
their social class. Analyzing the Google
Glass recordings, the researchers found that
those who had self-identified as wealthy didn't rest their
eyes on their fellow humans for as long as
those who said they were from lower social classes. Basically, one of the
privileges of being wealthy is not really even needing
to see the people around you, particularly if
you don't deem them as having the same status
you do, in which case, your opinion is
likely to count more. So all of the behavior
that I was constantly seeing that I felt
pretty shocked by in so many of these different
jobs really makes sense when you consider
that, for them, I was probably just a
really advanced smartphone or something. Like, I wasn't a human
being in their presence watching them behave
like a buffoon. But listen, that's
just speculation. I can only say what
the science says. Number 2 is that gender
dynamics are just as complicated in super wealthy houses. An assumption that
I used to make before being pretty intimately
familiar with the gender and marriage and domestic
dynamics occurring in these high net
worth houses was that having a lot of money
and professional status and accomplishments would
probably even out the playing field between men and women. Of course, there's all those
myths of having it all, or the woman who's super
accomplished and can dictate her own schedule,
and all that stuff. I just somehow imagined
that with enough money and professional
success, you would be able to escape the
kind of gender norms and, unfortunately,
discrimination that most of us live under. But it's actually not
true, and I experienced that both anecdotally, but
it's also really borne out by the data. When I was a nanny,
for example, I was often nannying
for families where both the man and the
woman in the couple worked outside of the home in
very high-level, high-stress, demanding jobs. They were both high earners. They both brought a lot to
the table professionally. But in every single home that
I worked in, without exception, the woman in the family, on
top of, of course, having the domestic help, i.e.,
me and other people that they were hiring
to work with them, took the vast majority of the
child rearing onto themselves. As a random example, in
some of these families, the woman would often come
home, say, like 7:00 PM, and she would often
be really flustered. She had to leave the office. She was still half
at work in her mind. But it was very
important that she come home, take
care of the kids, be part of their meal time, give
them a bath, put them to bed, like, have some
time with the kid. And frequently, the
husband would come home much later than the wife. And maybe he would have a
few minutes with the kid before bed. But it was never
a sense of guilt or he needed to really be there. It was always the
dynamic of like, hey, if he happens to
get a couple minutes in, well, isn't he just
being a great dad? While the woman often seemed
both stretched really, really thin at work, but also
put in a position of guilt for not being with her children
more, even though, arguably, it should be a completely
joint responsibility. And part of this is because
a lot of the dynamics that we see in society about
whose responsibility it is to be with the children
more, who should be the more primary caregiver,
what is expected of a woman versus
a man in a marriage really holds true even at
the highest earning levels. In fact, only 39% of
high-achieving men are married to women who
are employed full time, and 40% of those spouses earn
less than $35,000 a year. Meanwhile, 9 out
of 10 married women in the high-achieving
category have husbands who are employed
full time or self-employed, and a quarter are married to
men who earn more than $100,000 a year. Similarly, even high-achieving
women who are married continue to carry
the lion's share of domestic responsibilities. Only 9% of their husbands
assume primary responsibility for meal preparation,
10% for the laundry, and 5% for cleaning the house. When it comes to children,
husbands don't do much better. Only 9% of them take time off
from work when a child is sick. 9% take the lead in helping
children with homework. And 3% organize activities, such
as playdates and summer camp-- 3%. Now, listen, this is not to
say that just high-achieving couples are ones in
which the gender dynamics and the expectation of who
is a parent-- even though, spoiler alert, you're
both frickin' parents-- is so disproportionate. This is true across
socioeconomic classes to varying degrees. But the point is,
of all the freedoms that wealth can buy
you, for many women, it doesn't buy them any
greater level of freedom when it comes to
the gender norms that they are
expected to live by. Number 3-- that lack
of empathy is actually scientifically a thing. So in addition to
not even necessarily seeing other people
as much as people from lower
socioeconomic classes, there is a real problem within
the wealthy of having empathy for people around
them, particularly people who earn less than they
do or are perceived as lower than them socioeconomically. This is really an issue of
how much they are humanizing the people around them, how
much they are extending empathy to those people. So in addition to often just
being careless and unaware, when it comes down to it,
for many wealthy people, there is just a sincere
lack of humanity that they perceive towards the
people around them and towards, in many cases, what could be
considered their community. Here in New York,
for example, we are inundated with incredibly
wealthy people who live right on top of each other. But anyone who's ever
been around wealthy people in this city knows
that they could not give two craps about
their community, their neighbors, working
toward some kind of a greater cause with them. They're primarily just
interested in making sure their building, their
child's schools, their own personal
favorite places are not disturbed and
are allowed to thrive. And it's worth saying
that this is not some sort of innate problem,
where all rich people happen to be born unempathetic or that
all the empathetic people just happened to become rich. But it's actually
quite the opposite. Wealth in most
cases tends to make us more unempathetic
by nature because of how much it insulates you. You no longer need to
interact with your community. You no longer need to
be worried about what's happening around you. You don't have to
rely on your neighbors for impromptu child care
or work with them together to achieve a greater goal
of, let's say, for example, working on a community
garden together. You could just pay to
have that done yourself or have your own garden. And this fundamental disconnect
with the people around you and a lack of need to be
both seen as human to them and to see them as human
yourself fundamentally starts to wear away at
that natural instinct. And this can often feel
particularly egregious in service jobs,
where the dynamic is so clearly that you
are simply there to cater to their every whim. I mean, hell, the
job is called server. But if you've ever
felt in these jobs that you were perceived as,
frankly, less human than others because of, for example, the
social class that you were occupying or the role you were
playing, it's not in your head. Research has shown how
upper class individuals are worse at recognizing
the emotions of others and less likely to pay
attention to people that they are interacting with, i.e.,
checking their cell phones or doodling. But why would wealth and
status decrease our feelings of compassion for others? After all, it seems more likely
that having few resources would lead to selfishness. But researcher Piff
and his colleagues suspect the answer
might have something to do with how wealth
and abundance give us a sense of freedom and
independence from others. The less we have
to rely on others, the less we may care
about their feelings. This leads us towards
being more self-focused. And another reason has
to do with our attitudes toward greed. Like Gordon Gekko,
upper class people may be more likely to endorse
the idea that greed is good. Piff and his colleagues
found that wealthier people are more likely to
agree with statements that greed is
justified, beneficial, and morally defensible. These attitudes
ended up predicting participants' likelihood of
engaging in unethical behavior. But there may be an even
more compelling reason behind why so many of these
upper class individuals feel that greed is justified
and maybe even necessary, which brings us to
our next point, which is 4, that most rich people
don't actually feel rich. An interesting dynamic among
the wealthy is how much through self-isolation, creating
communities of people of similar incomes, working
with people of similar incomes, socializing with people
of similar incomes-- it tends to wear down
their social group to just people who tend
to be on their level or very close to it,
but in many cases, often much higher than
their financial level. This could be as simple as
someone else at work who got a way bigger
bonus, or it could be the person in
your luxury building who lives on a better
floor with a better view. Because your sense of normal,
what you expect out of life, your tastes, what you
consider to be a need are continually
evolving and upgrading with what we call
lifestyle inflation, where, because you can now
afford that nicer thing, you get used to it, and now,
you only want that nicer thing-- the endowment effect. When that becomes
your entire life and your entire
social circle, you tend to actually
perceive yourself as not particularly that
wealthy because you're most focused on the people
around you who have more. And of course, then, by
default, that perception of greed being justified
is in part out of necessity because, in order to
catch up to them, which is what, in many cases,
you're likely to want to do, you're going to need
to be a bit greedier. I remember in working for
a lot of wealthy couples how often I was struck by
their own perception of not being wealthy. Sometimes, you could
think that, OK, maybe this is just a question of
wanting to be demure or to be low key about it. But yes, there were
the comments about, oh, we're comfortable
when it comes to people who are literally
multimillionaires. But they were often,
in many cases, the impression
amongst these people that I worked with of feeling
like they were on a pretty tight budget because
the things they wanted, they couldn't afford. I remember certain
families I worked for complaining about having
to fly first class because they wanted to be flying
in a private plane. I never even told
them that I flew coach because I'm sure they would
have probably just had a stroke. And this phenomenon
is especially prevalent in
communities where there are a lot of people
who have what could be considered
entry-level richness but are surrounded by people
who have pretty developed and established richness. Silicon Valley is thick with
those who might be called working class millionaires,
nose-to-the-grindstone people like Mr. Steger who,
much to their surprise, are still working as hard
as ever even as they find themselves among
the fortunate few. But many such accomplished
and ambitious members of the digital elite still
do not think of themselves as particularly fortunate, in
part because they're surrounded by people with more wealth-- often a lot more. And it's funny because I
often remember even when I was working for
these people and had very, very little, and in many
ways felt envious of the ease that their life
seemed to embody, I remember feeling
pretty sad for them because, for the most part,
no matter how much they had, they always in some way seemed
very focused on wanting more. Especially in the environment
like the yacht club, where so many wealthy
people were coalesced into a small environment where
they had every opportunity to compare one another's
wealth, how big their boat is, how nice their car is,
the kind of parties they were throwing
at the club, it became very clear that it
was much more about comparing yourself to others
than it was really about enjoying what you had. And as their social
class becomes more and more restricted
and the lifestyle inflation gets more and more
prevalent, you're basically on a hamster wheel of
always wanting more and being basically immediately
dissatisfied with what you have. And this is exacerbated
when you consider number 5, that work
addiction amongst the wealthy is a very real thing. One of the things
that surprised me most when I was very up close with
people who could have afforded to be retired at
the age of 30 was how much they continued
working, and in many cases, actually worked much more than
the middle and working class people that I knew. One of the gentlemen
that I worked for had so much money that he not
only could have been completely retired, but he also could have
dedicated 100% of his free time to his passion project, which
is a luxury most people would dream of. But he actually only gave a
very, very small amount of time to that passion project
that he loved so much because he was
frequently-- basically, almost every week--
putting in 70 to 80 hour weeks at his 9 to 5 job. And a lot of that, I
think, amongst the wealthy has to do with a sense
of validation only really coming from that
professional achievement. When you look, for example,
at high-flying executives who might receive a bonus one
year that would literally be enough to retire
on in and of itself, you start to understand that
that continual desire to work for next year's bonus and
make it slightly better and make it slightly nicer
than your other executive peers' bonuses becomes in and
of itself a kind of addiction because the money is now
so vast and so accessible that it's no longer
even really connected to its real-world applications. When you're talking about
salaries and bonuses and packages in the tens of
millions of dollars a year or, frankly, even just in the
millions of dollars a year, you're talking about people
who are no longer thinking just directly in terms of what
that increase in income can buy them in terms
of day-to-day life. The money becomes a game, and
the professional validation becomes an insatiable need. And what's so funny
about this is one could argue that the
most valuable thing any single person can buy
themselves with money is time. But yet, that's a choice so many
wealthy people are not making. And though they do try
to compensate by spending so much on conveniences-- things to be delivered,
people to do errands or minute tasks for them, people
who can buy them free time here and there. Part of the reason they
have to spend so highly on those conveniences
and those shortcuts is because they're filling
their time with work. Studies over the
years have indicated that the rich, unlike the
leisure gentry of old, tend to work longer hours and
spend less time socializing. Tim Cook, for example, the
chief executive of Apple, whose worth has been estimated
in the hundreds of millions, has said that he
wakes up at 3:45 AM to mount his daily assault
on corporate rivals. Elon Musk, the man
behind Tesla and SpaceX is worth some $23
billion but nevertheless, considers it a victory
that he dialed back his bonkers 120-hour work weeks
to a more manageable 80 or 90. If you swapped literally any
other activity, habit, routine, substance for work
in these situations, you would immediately
recognize this as compulsion. But because we put
work on such a pedestal and how much you
earn as a result of that work on such a pedestal,
we tend to look the other way. And all of this brings
me to number 6, which is the most important and
invaluable lesson that I have taken with me from working
for the wealthy for so long and has informed so
many of the choices that I make with my own life
and with my own business, which is that money doesn't buy
you happiness, but it can. We know pretty
well when it comes to the psychological phenomenon
of things like happiness, fulfillment, joy that there's a
pretty simple formula for what can bring us those things. And there are a
few key ingredients that are totally
accessible to the wealthy but which in many cases
they opt not to have. Of course, one of the
minimum requirements of a feeling of
happiness is a feeling of stability and safety. Your basic needs
are being met, which is why you often see
those studies about how after you earn a
certain amount of money, the returns are diminishing
because your needs are met, and now you're just
thinking up new needs. And of course, the wealthy earn
so far and above what they ever need to meet their
needs, but they keep giving themselves more
needs, more aspiration, more envy, more things to
aspire to that they can't even feel that fulfillment and
satisfaction of having those needs met. And there's another key
component of happiness that is often profoundly
lacking from their lives. One of the things that most
determines whether individuals will identify
themselves as happy is a strong sense of connection
with their communities. Most of us live a
life where in order to get by, in order to live
well, in order to prosper, we need to have
meaningful connections with the people around us. We need to know our neighbors. We need to take care
of our neighborhood. We need to stay
close to our family. We need to rely on each other. So not having complete access
to buy whatever you want or hire someone to do anything
makes you intrinsically more dependent on that
community and creates a greater sense of
interwoven needs and desires. When you don't have this and you
feel isolated from communities and atomized from
communities, you're likely going to be less happy. There's also a
direct correlation between working massive, taxing
hours and not feeling happy. Aside from the immense
stress that it causes, you're robbing yourself of your
own ability to enjoy your time or even dictate what
you're doing with it. And it's funny because one
of the more simple solutions for the wealthy to
become more connected with their communities,
to be more invested in the lives of people who
are different from them, and to give themselves
a higher meaning would be to share as much
of that money as possible with the people who
need it or with causes that they feel strongly about. But despite the reputation
for being philanthropic, as a group, the wealthy
actually don't give that much. The rich are not
the most generous, concludes a 2012 study
published in the Chronicle of Philanthropy. Middle class Americans
give a far bigger share of discretionary income to
charities than the rich do. The data, which
looked at IRS records, found that while households
earning $50,000 to $75,000 give an average of 7.6%
of discretionary income to charity, households
making $100,000 or more give an average of 4.2%. But of course, if
you're thinking about people who have
naturally developed less empathy for their
fellow human beings and have no real need
to be super implicated in their community,
that makes total sense. And above all, it's sad,
because as I said in my point, money could buy us happiness. Money could buy us the
feeling of security and warmth and connectedness. We could provide for others
and have them provide for us. We could be part of
something much bigger and celebrate as much in
someone else doing well as we do in ourselves doing well. But in order to do
that, we must have a profound level of
empathy and connection with the people around us. And as the saying goes, never
look in your neighbor's plate unless it's to make
sure that he has enough. If you are privileged enough
to have discretionary income, to be comfortable financially,
as I myself very much am, it is incumbent upon
you at every turn to do everything you can not
to let that money make you less human, less connected, less
empathetic, or less charitable. In an era of soaring
wealth inequality, it's important that we
stop idolizing the rich and start seeing them
for what they are-- kind of a little sad. And if you are looking to
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you so much for watching. And don't forget to hit
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