Recently the wife and I were having a bitching session about some of our relatives and friends, about how despite being rather wealthy they’re rather miserly, both in terms of spending on themselves and spending on others.
While we were wondering why people with so much money are so stingy, the wife noticed a pattern – they are all people who are used to getting freebies in their professional lives.
There are consultants on expense accounts whose every expense on tour is paid for by their clients. There are doctors who are routinely provided “expense accounts” by medical representatives. There are people who work for the government who get a lot of “perks” in addition to the (rather meagre) salaries they make. There are journalists, who when on PR jaunts, are again used to living on an expense account.
The point with all of them is that they are so used to getting others to pay for their expenses that they are simply not used to spending themselves. And so when it is time for them to spend, they spend like they used to in the time before any of these expense account taps opened up for them.
This, for most of the above referred to people, refers to time when they were either students or they were entry level employees – times when they didn’t have much money in life at all. And they end up living the rest of their non-professional (non-expense account) lives spending like they used to as students or entry level employees.
Back when I was a banker making lots of money, I remember having this conversation with a then medical student who was excited that once she became a “big doctor” she would have medical representatives at her beck and call, who would fund her life. I had replied that I would rather make all my money in cash and have the discretion on what I wanted to spend on, rather than have someone else make the decisions on what I should be splurging on.
I guess there are other benefits as well to spending your own money, rather than living on an expense account.
PS: I just remembered that I haven’t “filed expenses” to my client for a business trip I took a couple of weeks ago.
Interesting. I had noticed this too. I felt that with quite some of them they’ve reached a stage where they are racing against time to save money and hence being miserly. They probably expected to have a corpus of x by the age of 40 but suddenly at 35 they realize they are far behind.
This expense account is an interesting perspective.