An Excerpt from The Difference
Chapter 1: Meet the Neighbors
This all brings up the questions that are at the heart of this book: Where do you fit in now? And how do you rise to the top?
I suppose that's fitting, as this entire book unfolded as the result of asking—and attempting to answer—one very large question: Why do some people seem to move relatively easily from a paycheck-to-paycheck existence into comfort or wealth, while others get stuck or—worse—fall back?
I set out to answer that question by reading volumes of research— academic and otherwise—on the subject. Or I should say subjects: wealth, education, success, entrepreneurship, risk taking, and the bigger worlds of behavioral finance and positive psychology, which danced in, out, and around the question I was trying to frame. Many professors walked me through their work, explaining their theories and answering my questions.
In the end, though, it wasn't enough. I wanted specifics of which behaviors, attitudes, goals, and personality traits mattered most. I needed to know how these elements combined to make The Difference. How many of these behaviors, attitudes, goals, and traits did you need to boost you from one category to another? What, if anything, held you back?
That was when I joined forces with Merrill Lynch and Harris Interactive to develop our own survey instrument that would look— specifically—at these questions. For months, a team of eight to ten of us met regularly. We used the preexisting research as the foundation for our a twenty-minute questionnaire. Then we rewrote those questions, and rewrote them again. Finally, several months later, we administered the poll to more than five thousand individuals.
The study, formally known as the 2008 Merrill Lynch New Retirement Study, delved specifically into four loosely constructed categories: nonfinancial behaviors, financial attitudes and behaviors, goals (both financial and life), and personality. We asked hundreds of questions about topics including—but not limited to—the following:
FINANCIAL ATTITUDES AND BEHAVIORS: Are you where you want to be financially? Why or why not? What has been the most important factor in reaching your financial status? How do you handle your credit cards? Do you or do you not budget? Do you look up to people with more money than you have? Have you worked with a financial adviser? How do you feel about stocks? Bonds? Do you feel entitled to a good standard of living?
GOALS: What financial goals have been absolutely essential for you as an adult? Save more? Reduce debt? Which goals have you been able to accomplish as an adult? Can you envision a day where you won't have to work to meet your financial needs? Do you see a retirement where you will work part-time? Start your own business?