An Interview with David Brancaccio

Interviewed by Gretchen Kinder

MTM: How would you describe Squandering Aimlessly and why did you write it?

Brancaccio: The book is a travel-narrative- meets-personal-finance guide. I suppose it grew out of my own experiences with travel and money as a child. I grew up in a family that was enriched, but not financially rich. Any extra money my parents earned (one as a professor of American Literature and the other as a schoolteacher) was spent on family travel. I also had a belief as a child that rich parents sat their children down and taught them everything they needed to know about saving, compound interest, and the stock market-none of which ever happened to me, which may be why I became a financial reporter as an adult. However, as a reporter, I learned that having financial data is not the same thing as having financial wisdom, so I decided to hit the streets to learn more about people and money.

MTM: What did you learn?

Brancaccio: People talk a good game about money. No one, for example, will tell you they are not charitable. But the rubber meets the road when you look at how people spend a surplus. This is where we really see values expressed.

Nowhere are values more evident than in our expression of our philanthropic selves. People give away more money when they perceive that they have a surplus. One might conclude that we can be our best selves when we have more than we need. We witnessed that in very real terms during the flush time of the mid-1990s, when charitable giving hit an all-time high. Now, as the perception of shrinking capacity sets in, people are giving away less. This perception of having less engenders fear among individuals. "What will happen to me (and my family) if we go to war? Will my portfolio continue to shrink?" Yet, it may be that now, more than in the '90s, charitable giving is needed to compensate for rising unemployment and shrinking government capacity.

I also learned while writing the book that when people go from having nothing (or not a lot of money) to having a surplus, their self-perception is likely to change. This can be terrifying.

MTM: What is terrifying about it?

Brancaccio: How we choose to spend when we have more our money reveals much about our personalities, and we may be frightened of what it might tell us about ourselves. For example, I like to think that if I got a lot of money, I would do good with it. I also know I would get a fast car. What does that say about me? That's the terrifying part.

There can also be the fear that the money will turn one into a creep. I've felt that-the fear that the money will control me and my personality.

MTM: As you talk, I'm reminded of my brother, who won $8,000 on the Wheel of Fortune television game show. Having even this small surplus helped him feel better about himself. Why do you think we let money control us in this way?

Brancaccio: We live in a culture of consumption. When we walk into a mall without money, it is a humiliating experience. When we do have money, we feel powerful. With money, we control the agenda; we get what we want. This psychology is very powerful, and has tremendous implications for using our money to create possibilities. However, we're just too narrow in our focus to think beyond material and consumptive wants, so we don't use this power very constructively.

At a recent meeting with a grantmaking organization, I listened in on a conversation about increasing the mandatory government payout for private foundations. It's currently at five percent, which means that foundations are required by law to give away each year at least five percent of their total assets. The problem is that many people see the mandatory figure as a ceiling, not as a minimum. The context for the discussion was the increased need for charitable giving in our squeezed economy, yet, paradoxically, the sale of private airplanes is booming right now.

MTM: What can be done to reawaken people to their highest values at a time when they feel financially or personally afraid?

Brancaccio: Being open to questioning our perception of reality helps-by opening our eyes or traveling (literally or metaphorically). For instance, I live in a middle-income neighborhood of Los Angeles, near Beverly Hills. I assume that some of my neighbors in Beverly Hills have a different perception of their surplus than do my neighbors three miles in the other direction, who live in a poorer neighborhood. If the Beverly Hills folks would simply get in their cars and drive three miles, they could be awakened to the realities faced by another set of Americans and, in the process, realize their relative privilege.

MTM: What power is there in money?

Brancaccio: Money can buy experience, freedom, time. Money is a tool for education. Education keeps our perception fresh. It is harder to change our perceptions as we get older, even though we're ostensibly more mature. Angus King, the former governor of Maine, understands this. He recently bought an RV and is setting out on a cross-country tour with his family. This travel experience is likely to do more to expand the perceptions of his children than the power and fame of having been state governor.

An opposing force is this idea that money is a benchmark or proxy for success. The more money we have, the more successful we are. But we often don't take the time to think about the question, "To what end success?" Is it to get more dates? Why? Nowhere was this more evident than in my conversations with Reverend Matthews, the priest at Trinity Episcopal Church, located right next to the New York Stock Exchange. He meets hundreds of young men on Wall Street who are endlessly striving to be "successful," yet they have no idea what success means. Even in the church itself, financial success isn't linked to higher values. Trinity is a rich church by dint of its real estate holdings in Manhattan. It tried to go through the process of setting up social screens for its enormous endowment, and eventually gave up. It was too complicated. If a church, one of the institutions we turn to for moral leadership, can't make the leap out of the trap of equating personal value with financial value, what hope is there for the rest of us?

MTM: What gets in the way of making that leap?

Brancaccio: When people get a lot of money, the first step they usually take is to consult a financial planner. Most planners don't think beyond using the money to make more money. Very few, save for some of the socially responsible ones, help their clients think about using the money as a tool for creating life experience. I think it would be cool if we could create a trade show that let people explore life experiences without having to take ten pilgrimages across the country; for example, a trade show that allowed people to have a window into the experience Angus King is creating for his family. It wouldn't be a place where people could buy the RV, but a place where they could experiment with possibilities.

MTM: How do you know when a possibility is right for you?

Brancaccio: In the book, I write about a man named David Hunt, who buys a boat with his surplus. David's boat passes what I have finally realized is the important test for a surplus: If anyone asks David if he expects his use of his money to have a lasting, positive impact on the rest of his life, he can answer yes. The boat is something he has wanted for a very long time; it's a genuine expression of who David Hunt is.

You don't need to ask experts what the right thing to do with money is. What I would do with the money isn't what you should do with it. What you need to do is sit down and discuss your options with the people involved-your wife, whomever. A 401(k) plan, on paper, is a great deal for lots of people, but I have no idea if you have something eating away at you that you just really want to do. Following that inner impulse could be the most important thing you could do with your money. Will what you are doing with it have a lasting, positive impact on the rest of your life?

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David Brancaccio is senior editor of "Marketplace," the daily financial news program of Minnesota Public Radio, distributed by Public Radio International, and the author of Squandering Aimlessly: My Adventures in the American Marketplace.

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