Envying the green

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  By Guest Blogger Doug Rowat

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The late, great Berkshire Hathaway vice-chairman Charlie Munger once famously said, “The world is not driven by greed. It’s driven by envy.”

Think of this when your neighbour pulls into their driveway with a new SUV, or your work colleague gets a big raise, or your brother-in-law mentions a stock pick that’s tripled. Are you happy for them or just jealous?

A recent NerdWallet survey shows that money jealously is a common struggle. Nearly 3 in 5 respondents (57%) indicated that they’ve “felt envious of someone else’s financial situation” with more than half (54%) of those envious respondents conceding that the envy has taken a toll on their mental health. Such results are backed by academic research, which suggests that, under certain conditions, we’re even willing to engage in ‘destructive envy’, which basically means that we’re not just jealous but actually prepared to destroy another’s wealth if given the opportunity.

Truly then nothing good comes from envy.

A significant percentage (65%) of the NerdWallet respondents also acknowledged that social media contributed to their envy and led to reckless financial decisions such as overspending. And this dovetails neatly with Gabrielle Bluestone’s book Hype: Inside the Fyre Festival and the Golden Age of Grift, which notes that in their desire to ‘status signal’, wannabe influencers are willing to go so far as to rent out grounded private jets for photo ops and will, similarly, buy used (and empty) Hermes, Dior or Chanel shopping bags to further create the illusion of lavish shopping trips.

So, how to bypass all this nastiness?

• First, recognize that we likely possess no information on the true financial status of our peers. I might know, for example, that my neighbour’s driving a new SUV, but I don’t know how much debt was incurred to buy it or how much it’s stressing their finances to continue owning it. Similar to the empty shopping bags mentioned above, some (and perhaps all) of my neighbour’s status signalling could simply be an elaborate illusion. Therefore, there’s a more than reasonable chance that our envy is misplaced from the very start.
• Second, focus on yourself, not others. A Harvard Business Review study showed that individuals who focused on their own successes and accomplishments ahead of being presented with a rival’s business plan were willing to allocate 60% more time to listening to that plan versus those who didn’t affirm their own strengths beforehand. In short, if we focus first on our own talents and achievements we’re less likely to be envious.
• Third, be grateful. What are the things in your life that you appreciate and are thankful for? If we count our blessings, research shows that it reduces envy and enhances our well-being. Many studies have shown that gratitude—and this could be something as simple as being grateful to have found a nearby parking spot—counteracts both envy and materialism. UC Berkeley notes that “because envy and materialism involve dwelling on what we do not have, they may be antithetical to gratitude, making it difficult for people to be grateful and envious at the same time.”
• Finally, reduce your time spent on social media. This doesn’t need further explanation.

Charlie Munger highlighted that wealth accumulation should result in the freedom to do what you want on a day-to-day basis and to associate with who you want to associate with. It shouldn’t lead to needless showcasing or resentful competitiveness. Berkshire Hathaway, in fact, has a policy of not revealing the salaries of most of its top executives precisely to avoid nurturing envy.

What’s most important is living a rewarding life and associating with good people. This, Charlie noted, always “beats 25-room houses, or six cars.”

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Investment Advisor, Private Client Group, Raymond James Ltd.

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About the picture: “Tilly the Yorkie is checking out her new friend Buddy the husky,” writes Herb. “Tilly wants to meet every person and every dog she sees. Tilly is 9 months now, Buddy is 12 years  – both are going strong. Garth, keep up the good work on your blog, people like me rely on it.”

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