I’ve been working on my next book proposal—an essay collection—since February, and have finally arrived at that sticky part in the process where it’s clear I need a few singularly focused weeks to tease apart some of its remaining questions. You’ll hear from me again after the July 4th holiday, hopefully as a changed woman with 47 new viable ideas.
This week’s piece, written about 18 months ago, was one of my first forays into thinking critically about a core theme of the project: the implications of our choices in structures that incentivize behavior we may find unacceptable in theory but (seemingly) unavoidable in practice.
I’ve edited it with fresh eyes. Enjoy.
In 2021, I earned more in a month than I had earned in all of 2018. I was 26.
The psychological experience of sudden material abundance is disorienting. During this shift, money transformed from something essential and tactile, like food or shelter, to pixels on a screen. It was possible to live comfortably on one-third of my income—I would eventually buy a nice car, move into more square footage, shop for organic food without looking at the price tag. It might come as a surprise, then, that this was the first time a glimmer of disillusionment with “the system” flashed across the windshield of my perspective. Not in spite of my income, but because of it.
One of the chief edicts of capitalism is that the market always allocates resources efficiently. The infallible, invisible hand dispenses its bounty according to who deserves it most. When I earned $54,961 in 2018, I didn’t yet have a reason to doubt this principle—vast financial excess was an abstraction. Back then, defending things like CEO pay and minimum wage felt effortless. I figured I deserved my $54,961; why wouldn’t the same be true of the suit atop the Carlyle Group and his $186 million?
But experiencing the material immensity of even a fraction of that wealth—the mythic “multiple six-figure income”—rendered the existence of $186 million pay packages viscerally absurd. I now had evidence that “limitless” verged on “meaningless” long before one accumulated nine figures. That anyone would go to such desperate lengths to influence policy or avoid taxation or do whatever else the Koch brothers have been up to for decades no longer seemed like an understandable impulse of a system that incentivizes accumulation, but pathetic, even pathological.
Still, our modern economic logic urged me to seize my lightning bolt moment of good fortune and save like hell. Having marinated in the FI/RE methodology for years before my earnings shot up, high savings rates and eye-popping investment contributions were just the standard price of entry and an all but expected outcome of devotedly following the path. As you earn more, you invest more—and if you do this for long enough, eventually, you will become wealthier than you need to be, since the technical objective is to amass a pile of money large enough that whatever you use is always replenished. If all goes according to plan, you should actually become richer as you withdraw what you need. Possessing more than you could ever use is a feature, not a bug. Projecting myself into this future, I began to wonder if choosing to keep getting richer anyway would be less a validation of my brilliance than an indictment of my character; wondered how the ethical fingerprint of such a decision was any different from the billionaires I impugned with such moral certainty.
Usually our cultural norms do the heavy lifting to relieve such dissonance, but the undermining logic is baked right in: We’re adept at discussing what our spending could’ve generated if it were invested instead, fluent in the language of opportunity cost when confined to our individual balance sheets. The zero-sum nature that governs our personal spending and investment decisions is all but indisputable. Why, then, is it less common to acknowledge the same is theoretically true of personal wealth that, deployed differently, could’ve delivered a far broader benefit? To the extent the system “works,” it works by appropriating our self-interested impulses for the collective good. But the more money you accumulate, the stronger its gravitational pull becomes; the more you have to cling to ideas about individual deservingness to silence the small voice reminding you that even now, somewhere much closer than is comfortable to admit, someone is sleeping on the ground with an empty stomach.
When we say “the system” incentivizes a certain course of action, we mean that capitalism rewards immense black holes of insatiability with more matter. Eventually, this gravitational pull will begin to warp and distort space-time for everyone else. We know that extremely rich people use their money and access to refashion the world in ways that reinforce both. Forty percent of all political donations come from the top 0.01%. Researchers have struggled to quantify the impact of the ultra-rich on American policy, but formal studies are challenging: This group is not exactly forthcoming about their desire to privatize Social Security (although…). Even if they were, they employ legions of public relations professionals to sane-wash and launder their motivations, and, if that weren’t sufficient, they mostly own the platforms where these ideas might be earnestly critiqued.
Evidence suggests the political views they’re paying to implement don’t align with the majority, in part because they don’t live in the same world as the majority. Wealth tends to isolate. While nearly 90% of Americans agree that “the government should spend what’s necessary to ensure all children have good public schools,” only one-third of the richest 1% feel the same way. Fifty-nine percent of the general population say they’d be willing to pay higher taxes in order for every person to have healthcare; only 41% of the richest 1% say the same.1
Essay continued after this message from our partner…
I have a confession to make: Despite transforming my entire identity into that of Personal Finance Personality, I haven’t had a traditional “emergency fund” in years. I was living fast and loose with my money either (a) in my checking account or (b) in an investment account set to a 90%+ stock allocation, with no in-between. Because of this, I never had any real reason for saving meaningfully in a dedicated high-yield cash account.
With my major lifestyle shift to self-employment, that changed in 2026. Now I’m absolutely lousy* with high-yield cash accounts, each earmarked for its own special use case: my taxes, for one, now that I’m setting aside a whopping 30% of everything I earn. It would pain me too much to watch that money rot in checking, earning nothing.
With Betterment’s high-yield cash account called “Cash Reserve,” new customers can:
✅ Earn up to a 4.00% variable APY with a qualifying deposit—that’s nearly 10x the national average—on the same platform where you’re growing your investments.
🤩 Save with no fees or minimum balances.
👼 Feel assured that up to $8 million (joint) or $4 million (individual) is FDIC-insured (though I can’t think of any scenario in which I’d ever recommend keeping millions in cash; go with God, comrade). That’s 16x what most banks offer.
Open your Cash Reserve account today and start saving for tomorrow. You can even create multiple savings goals and use Betterment’s automated tools to help you achieve them.
🥳 Put your cash to work with Betterment Cash Reserve and earn up to a 4.00% variable APY with a qualifying deposit.
*OK, I have two. Still, that’s an infinite increase over zero.
Paid client. Views may not be representative. See App Store & Google Play reviews. Rate is subject to change. Learn more.
Nathan Robinson writes for Current Affairs that economic theories across the spectrum shy away from describing hoarding of this nature as a “choice.” But a structural incentive is not the same thing as an imperative, he argues: “Both socialists and capitalists have good reasons to say that capitalists aren’t ‘selfish’ but it is ‘the system’ that compels them to act as they do. So an argument that makes little sense and is obviously at odds with reality (where rich people could easily choose not to be rich, and capitalists make profits by choice) persists because it is convenient for both the system’s proponents and critics to believe it.” The ‘choice’ framework feels, admittedly, a little awkward to confront directly, because it forces me to acknowledge where I am not a passive victim of capitalist logic, but a willing participant with a Porsche.
Robinson’s candid assessment—that it’s a choice to get as rich as possible, and Adam Smith is not holding the invisible hand over your eyes—might introduce the most prosocial case for frugality: not because self-denial is intrinsically noble, but because it might spring from a generative recognition that your wants aren’t more important than someone else’s needs. It’s true that the system incentivizes hoarding, but that truth can deflect a less convenient one, Robinson says: that doing so is, ultimately, still a choice.
This is less a financial dilemma than a spiritual one, which might be why most worldviews that attempt to contend with it directly are religious. Recently, I was flipping through my high school Morality textbook.2 In the final chapter—the text is structured according to the Ten Commandments—the Catholic church’s view on personal ownership comes into clearer focus, stating that while private property is enshrined in the doctrine, this must be balanced with the fundamental tenet that God is the true owner of everything. Elsewhere, “God” is synonymous with “the common good.” You can fairly possess your own stuff, it seems to say, but not at the expense of everyone else, a tough directive to follow when the entire framework of wage labor and capital accumulation all but mandates complicity with your credit being someone else’s debit.
In Thai Buddhism, a belief in interconnectedness supports the “sufficiency economy” philosophy, which recognizes “overindulgence” as “inevitably related to others’ suffering.” Islam prescribes zakat, a 2.5% annual self-imposed “wealth tax.” In broader Judeo-Christian traditions, the ancient practice of tithing, a word that means “one-tenth,” refers to giving away 10% of your income. While plenty of prosperity gospel preachers and religious institutions have capitalized on this principle to furnish their private jet funds or commit strip mall fraud,3 the practice is partially intended to demonstrate that there’s a difference between something being “in your possession” and “rightfully yours.”
Since our present system allows for unlimited poverty and riches, the negotiation of this dilemma is left to each individual’s moral compass. Such an arrangement virtually guarantees that we’re tangled in dynamics that make us—often at the very same time—both the exploited and the exploiters. In that sense, framing it as a simple “choice” is an oversimplification. Individual philanthropy among the 99% will not address the dynamics that have caused the top 1% to nearly double their share of the nation’s wealth in the last 50 years.
But the existence of grotesque wealth makes it easy to overlook the power of regular affluence. It becomes tempting—justified, even—to assign the moral stain to the few thousand people who have the most. That this has the inadvertent effect of granting them even more power to shape our outcomes is, I would surmise, fine by them.
🤓 Earn up to 10x the national average on your savings. With no fees, no minimum balances, and up to $8 million (joint) or $4 million (individual) (!) in FDIC insurance, start saving for tomorrow, today.
It would appear as though the more money you have, the less you care about other people, which seems to be a more or less accepted heuristic—and yet the mechanism by which this happens doesn’t seem especially well understood
Yes, in Catholic school, we took a class called “Morality,” and ironically, it was widely considered the easiest theology course in the curriculum
That it’s seemingly so impossible for these religious institutions to live up to their own principles about wealth surely says something useful about the efficacy of personal guardrails, rather than structural boundaries, as an enforcement mechanism
Love this and I think it’s a normal and healthy feeling. Don’t forget the learn, earn and burn theory. My sister always told me you’ll reach a point where you don’t have to work paycheck to paycheck anymore and then it’s time to turn around and help someone else get there. My favorite way to give back is simply setting up people’s budgets for them on copilot, teaching them about financial literacy, because no one ever taught me. I think you’re doing a lot of that. I’ve personably learned so much from you over the last decade. Maybe get more into the weeds on how to build a business 👩💼, how to make more income, there’s so few people teaching the average person that. Ramit always tells us the scripts of how to ask for more, how to earn more income, right? It’s so refreshing. I love the idea of volunteering: your time, your knowledge. Like anything else, the internet is a dark place. But you can make it a little lighter by pushing more GOOD into it, you’re doing that. Anyway, thanks for all that you do. ❤️
It's really true that it is not just the billionaires against everyone else but a spectrum of privilege and opportunity built into the "system." The submerged state that subsidizes the middle- and especially the upper-middle class does work to build the inequality just like billionaire exceptionalism.