Updated on 02.24.16

The Power of Social Indifference

Trent Hamm

How to handle expensive desires brought to you by social media.

Yesterday, as I was doing a bit of research into my article about the traits of a typical millionaire, I came across a fascinating article from MarketWatch entitled Social media can keep you from being ‘The Millionaire Next Door’. The article features an interview with the daughter of one of the authors of that book, Sarah Stanley Fallaw, who has continued her father’s work as the founder of DataPoints, which is essentially a company built around finding and extracting data on the affluent.

Here’s an excerpt from that interview:

MarketWatch: Were there any surprises resulting from the new research?

Sarah Stanley Fallaw: The new things that were interesting were how being responsible for one’s finances impacted net worth. If you look at some of the research that relates to self-efficacy (which means you believe you can do things) and internal locus of control (believe that things around me are driven by my actions and behavior), you see the importance of social indifference.

Do I care what other people are driving, or about trends? That sort of thing. When you look at the correlation between those scores and net worth, it holds true.

The research is based on the idea that personal financial management is a job. My background is in industrial psychology, developing assessments that would predict someone’s performance on the job. We designed assessments for use in the selection in leaders and sales people. That’s essentially what my dad did. He defined how people who were self-made were able to build wealth on their own.

MarketWatch: So social indifference is our ability to resist the temptations of fashion, trends, fads or the luxury car parked next door. This isn’t really a new problem, as your father pointed out in his book.

Sarah Stanley Fallaw: I think the difference today is the unending nature of knowing what “the Joneses” do, given technology. Purchases, vacations, educations are all broadcast via social media and other means, and he couldn’t have anticipated this in 1996. Still, the research we’re doing demonstrates that those who ignore trends have higher net worth, regardless of their age, income and percentage of wealth that they inherited. Building wealth means ignoring what others are doing, which may be more challenging today than in the 1990s.

MarketWatch: Do you have advice for people in the “mass market” or “mass affluent” categories on which wealth destroyers they need to avoid?

Sarah Stanley Fallaw: In this day and age, making an assessment of how much you are distracted from the goals you want to reach. My dad, in his final years, was focused on how challenging it was to be disciplined to manage time, and to assess how much you are being distracted from those goals, and make changes. What we are doing here is measuring behavior you can change. It’s not something you are born with. You can change. And that was his advice too.

In other words, we are heavily influenced in our spending choices by the people in our social circle, and thanks to social media, we are more heavily exposed to our extended social circle than ever before. For example, Facebook is a constant flood of pictures of things like the cars that people own, the houses that people live in, and so forth. Twitter is often the same.

The reality is that social media creates a very false view of what the lives of other people are really like.

When you interact with someone every day, you tend to see the “average” of their life pretty clearly. You see their day-to-day activities, their small highs and their small lows, along with their occasional peaks and valleys.

On social media, those things are edited. You only see the highest peaks and, sometimes, the lowest valleys. People want to make their lives seem as impressive as possible, so they cut out the everyday elements of their lives and show only the things that will impress others.

“Look at our gorgeous new kitchen!” “I love our new car!” “Here’s our whole family at Disney World!” “We are soooo in love!”

You get the idea.

Yet, we can often fall into the trap of taking our cues on living from those snapshots on social media. If one of our friends has a big house, we begin to believe we need a big house. If one of our friends has a shiny new luxury car, we begin to believe we need a shiny new luxury car. If one of our friends is showing off pictures of their wonderful trip, we begin to believe that we need that wonderful trip, too.

What those snapshots don’t show you are the average moments in life, the ones that you see when someone is really close to you. Facebook doesn’t show you that person in their pajamas watching Netflix all day. Facebook doesn’t show you that couple arguing about how they’re going to pay the bills at 11 o’clock at night.

All we see are the glossy pictures of their life, the ones where everyone is happy and smiling and seems to have tons of money. We see what people perceive to be the peaks of their life.

And, since we’re human, we want those peaks as well, and it’s not a stretch to see how our minds instantly make that connection between the purchases and the joy that we think we’ll get.

Yet, when you look back through your life, very few purchases really bring you a lot of lasting joy. I know this is certainly true for me. Many things I’ve bought have given me an initial burst of joy, but that burst has quickly faded over time. Sometimes, I’ve even fallen into a trap of routine purchasing, where I buy something out of routine because it once brought me joy but now seems utterly normal.

So, what’s the fix? How do we deal with the constant encouragement of social media to live a perpetually more and more and more affluent lifestyle, which chains us to our jobs and forces us onto a financial tightrope?

The solution is social indifference.

Here’s the crux of the whole issue. If you didn’t see a friend of yours with a shiny new car, would you even want a shiny new car? If you didn’t see a friend of yours going on a luxurious vacation, would you even want that vacation? If you didn’t see a friend of yours owning a bunch of expensive home furnishings, would you even want those furnishings?

The truth is that you almost always wouldn’t want those things. They wouldn’t be present in your mind at all. They wouldn’t be associated with a person that you care about. You wouldn’t feel vague pangs of jealousy about that person’s life.

tourist taking selfie in London

Our social media profiles are painstakingly edited to highlight the fun and leave out the bad parts. Photo: Nigel Burley

Nothing whatsoever is different about your life. You still don’t need that thing that you desire in your life. The only thing that changed is that you saw a picture of a friend enjoying something and you craved that happiness and enjoyment, too. If your friend is happy about something, you want to be happy, too, and you make the logical leap that the thing your friend is happy about will be the thing that brings you the joy that you want.

The way to fight this off is through a conscious effort toward social indifference. This doesn’t mean that you cease caring about your friends, but simply a realization that an expense that brings your friend joy will not necessarily bring you joy – and, in fact, usually won’t bring you joy.

It’s a hard switch to flip, to be honest.

For me, the most effective technique for encouraging a sense of social indifference is to ask myself why exactly I haven’t considered buying this item before. Why haven’t I been interested in this before? Why haven’t I wanted a new shiny car very much before seeing my friend with one?

When you ask that question of yourself honestly, you start looking at your own personal needs and wants, separate of the influence of others. You look at what’s actually important to you, not what others might value. And, unsurprisingly, you’re probably going to come to different conclusions.

If you do this often enough, you train within yourself a certain level of social indifference. You don’t want it to be high enough that you genuinely don’t care about your friends, but you do want it to be high enough so that you don’t feel the need to replicate their experiences or their purchases.

The happy medium is a point where you can feel quite happy for your friends because of the joy they’ve found, but at the same time you don’t feel a need to replicate that joy because you have your own sources of joy independent of that.

That’s a mindset that will keep you from feeling jealously and making purchases because of what you see from your friends on social media, and reaching that point is going to save you a great deal of money, both directly and indirectly.

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