Wealth journalism and the self-regard of the “single-digit” millionaire

I am a love-hate reader of the New York Times’ “Wealth Matters” series. I find such articles embarrassingly addicting. Less focused on straight real estate porn than the Wall Street Journal’s “Mansion” section, Wealth Matters provides an interesting sociological window into the world of wealth. The section often reveals more than it intends, about both its subjects and its comfortable reading audience.

$2500 analog model (Also available in rust).
My own conspicuous non-consumption item

Consider one recent column by Paul Sullivan: “Millionaires Who Are Frugal When They Don’t Have to Be.”

Sullivan opens with a charming anecdote about a middle-aged couple nearing retirement:

Bob Weidner likes to play a game when he goes to a high-end outlet store like Brooks Brothers or Ralph Lauren: How many things can he buy and not spend more than $100? On his last visit, the answer was seven.

“Every year, we go up to the outlets and find a deal,” he said. “It’s worth it.”

His wife, Angela Marchi, who chides him for darning his socks (just the toes, not the heels, he said), prefers to buy her clothes twice a year when her favorite stores put last year’s styles on sale.

Sullivan notes that

The couple are the face of the self-made millionaire who has the financial security of true wealth, not the fleeting rush of sudden riches. While the popular perception of millionaires is that they are more ostentatious than frugal, recent research shows that single-digit millionaires, at least, are generally far more mindful about how they save, spend and invest their money.

“It’s about paying attention to what makes you happy and not just doing what our society tells us to do,” said Donna Skeels Cygan, a financial advisor in Albuquerque and the author of the book The Joy of Financial Security.

“They look upon money as a tool…. It’s an important tool. They don’t neglect it, but they also don’t worship it.”

I know this world a little bit. I know some of its little self-satisfactions, too.

Weidner and his wife seem like wealthier versions of my wife Veronica and me. We have prudently invested 25% of our gross income for a decade now. I proudly drive a banged-up old Hyundai Elantra whose blue book value hovers in the high two-digits. We own a much cheaper home than those awful “mortgage affordability calculators” say we can afford. I nag my peers to live similarly. I even produced a financial advice index card, which Helaine Olen and I have turned into a forthcoming book. Sensible saving—and, yes, living somewhat below one’s means–is how one accumulates millions of dollars over one’s career.

I’m sure Weidner and Marchi could provide useful advice to garish over-spenders such as Senator Marco Rubio, who seems chronically unable to manage his finances without being bailed out by a sugar daddy billionaire. And, yes, there’s nothing wrong with reminding yourself, in small and big ways, to remain frugal after you’ve accumulated a nice bit of wealth.

There’s only one problem. While this article flatters the self-image of comfortable readers, its main theme is really quite misleading. Weidner and Marchi are not garish or flashy; they not especially frugal, either. Right after that lovely sock-darning anecdote, we learn the following:

And while they own three homes — condominiums in Naples and Boca Raton, Fla., and a house in Lebanon, Pa., where they grew up, none of them are huge. One splurge is an annual trip to Italy.

According to Zillow’s, the median sale price of a Naples condo is $290,000. One would have to darn 185,699 pairs of nice Hanes crew socks to pay for it.

Sustained high income provided the main reason for their accumulated wealth. Marchi, is a veteran hospital chain executive. An anonymous source—A.K.A. Google search–indicates that she is President and CEO of an impressive organization called Vicinitas Cancer Care. The Times identifies Weidner as a senior researcher at a nonprofit.

Barring horrible luck or exceptional family circumstances, sensible people who earn high incomes for decades, will retire multi-millionaires. It’s not particularly complex or virtuous, though Weidner and Marchi deserve credit for following through. You sensibly invest a reasonable chunk of your high income every year. Then you watch the money grow.

This isn’t rocket science. But you do need the rockets—by which I mean the actual cash to put aside. A 28-year-old secretary raising her kids alone will skimp a whole lot more than this couple to pay her family bills. She will also derive less tax advantage from the alphabet soup of 401(k)s, 457(b)s, 529s, SEP-IRAs and other tax-advantaged savings vehicles that were expressly designed for the affluent. My original index card told people to save 20% of their gross income. For tenured professors like me, this is great advice, and an achievable goal. For many others, this is often out of reach.

For the couples willing to be profiled in Wealth Matters, conspicuous non-consumption, even cheapness in trivial matters, says more about the image they project to themselves and to others than it truly indicates about how people live or how they actually become wealthy.

While it’s charming to read stories of successful professionals spending their time sock-darning, there is something mischievous in these stories. Tales of apparent financial discipline invite the Times’ affluent readers to see their superior character as the main ingredient of their own financial success, and to downplay the critical role of luck and advantageous personal circumstances. Tales of penny-pinching as a personal hobby are easily confused with the more-genuine sacrifices made by people of ordinary means who seek decent daycare or who struggle to pay their bills and to save the bare minimum for their own retirement.

There’s something off-putting in the suggestion that wealthy professionals are more aware of the true value of money than some single mom whose own splurges involve McDonalds Happy Meals. She might need financial advice. She probably doesn’t need to be told that her spending should be devoted to what’s most important rather than what her neighbors think.

Wealth really does matter. The accompanying awkward realities seem easy to miss in wealth journalism these days.

Author: Harold Pollack

Harold Pollack is Helen Ross Professor of Social Service Administration at the University of Chicago. He has served on three expert committees of the National Academies of Science. His recent research appears in such journals as Addiction, Journal of the American Medical Association, and American Journal of Public Health. He writes regularly on HIV prevention, crime and drug policy, health reform, and disability policy for American Prospect, tnr.com, and other news outlets. His essay, "Lessons from an Emergency Room Nightmare" was selected for the collection The Best American Medical Writing, 2009. He recently participated, with zero critical acclaim, in the University of Chicago's annual Latke-Hamentaschen debate.

4 thoughts on “Wealth journalism and the self-regard of the “single-digit” millionaire”

  1. I suppose people do it, like the Chinese workers and families that save 40-50% of their meager incomes. You're right that it's a serious bite, though – saving $5000 out of an after-tax income of $25,000 means a very noticeable bite out of your living standards, made worse by the fact that you're probably surrounded by people who aren't saving that amount and are possibly living better than you in the short run because of debt.

  2. This isn’t rocket science. But you do need the rockets

    Can Harold Pollack write or what?

  3. To their credit, Weidner and Marchi seem to have accepted that they are not too poor to be happy. That actually shouldn't be a hard insight to achieve for folks who — like them — are richer than 99 percent of the rest of the world; or even when that number is 95 or so, my guess for myself and probably rather typical for a Samefacts reader. But apparently, and sadly for our society, it often is.

  4. As a member of this group of lucky lottery winners, your article offends me. Darning socks is a metaphor for a lifetime of sensible, delayed gratification choices in multiple areas of ones life. And the most important is to focus on education, career, marriage and family, in that specific order. That is why the single Mom is in such a difficult spot. That isn’t luck. That is a result of failings in decision making and/or perseverance. Consequences for those errors early in life can be brutal. You are doing people a disservice by failing to feature that in your article.

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