Let me introduce you to a man with the splendid name of T Harv Eker, who wants to teach you how to become very wealthy indeed. He's founder of the StreetSmart Business School, which is similar to Harvard Business School or London Business School, except in one or two minor respects you don't need to worry your pretty little heads about. He also runs a course called The Millionaire Mind, which, in common with much of the self-help literature on getting rich, is about inculcating the "abundance mentality": the idea that money is limitless, and that it's your cosmic right to have plenty of it flow into your bank account.
Sadly, I can't reveal too many specifics, since The Millionaire Mind costs $1,295 a person, and I'm still mired in the "scarcity mindset" (as are the Guardian's expenses controllers). For Harv, you'd have thought this would be a catch-22 situation, but it doesn't seem to have denied him a client base. Ignore news stories about declining fertility rates: there's still one born every minute.
Harv is right about one thing, though: we do have some strange ideas about money, and they get in the way of happiness. Experiments show we'd prefer a smaller pay rise that left us better off than those around us, rather than a big one that everyone else received, too. We're made much sadder about losing £100 than we are made happy by a £100 windfall. And we put cash into savings accounts yet maintain credit card debts at higher rates of interest. These behaviours make no sense to traditional economists, since money is meant to be fungible: every pound is interchangeable with every other pound. But we don't treat it like that: we use "mental accounting", dividing money into imaginary piles, then attaching emotional meaning to each.
A classic study of this phenomenon, reported in the Washington Post, presented a question: if you paid £5 for a film ticket, then lost it, would you buy a new ticket? Only 46% said yes. But what if you'd lost £5 in the street: would that stop you buying a ticket? This time, 88% said they'd buy one, even though the loss was the same. Many respondents, the experimenters said, felt that buying a second ticket would be eating too far into a fixed (but unspecific) amount they'd earmarked, almost subconsciously, for entertainment. Similarly, we're more likely to travel across town to save a small sum on a stapler than to save the same amount on a 42-inch plasma-screen TV. It doesn't seem worth it in the latter case, even though the benefit is identical.
Fortunately, you can turn this to your advantage. Blogger Bryan Fleming (bryancfleming.com) has devised a philosophy of savings based on the observation that putting aside a pound each day is, at least for the moderately well-paid, pain-free: we write off expenditures that tiny as an inevitable part of daily living. Ramp it up incrementally, goes the theory, and you can adjust to spending far less without ever noticing. Or pay $1,295 to learn the secret of wealth - and if you do that, get in touch and tell me what it is.
oliver.burkeman@theguardian.com
