A recent email from John, a millionaire next door from Texas, reads as follows:
I have given your book [The Millionaire Next Door] to three high school honor graduates in the last couple of years. I also gave them a check for $500. I told them I would give them ANOTHER $500 when I received a 2 page single spaced report on the book and how it might (or might not) be useful to them. These kids are lower middle class without a lot of extra money. NONE of them even TRIED to claim the extra money. HMMMMM. . . .
Contrast this case study with Carl’s. Carl, as profiled in The Millionaire Mind, is a retiree who was previously the CEO of two major public corporations. He asked his 3 grandchildren who were in middle school at the time to compete in a contest. All three were required to read The Millionaire Next Door and then write a short review of the material. The author of the top rated review would receive a cash gift of $500; the two runner-ups would receive $250 each. All three children wrote reviews and received the cash accordingly.
How is it that one group of young people showed no interest reading and writing a report while the others were full participants?
8 thoughts on “Would you read The Millionaire Next Door for $500?”
I think the problem was giving them $500 up front for nothing. I would have given them $50, then the promise of $500.
Also, I read the book for free because I understood the “why.” It seems that $500 was dangled as the “why” instead of stating how this book could change the life of these kids’ futures and their kids’ futures.
It also assumes that money is a universal motivator. I was a poor kid and even as I am financially independent today, money was never a motivator. Doing interesting things (I’m what they call a geek) and doing things for a good reason (a good cause) made all the difference in my motivation.
The difference is in the first example he made the assignment OPTIONAL. In the second example he said his 3 grandchildren were REQUIRED to do the assignment. Most people (adults and kids alike) don’t do optional.
I’d love to hear a professional psychologist point of view, but here are a couple of thoughts from an untrained person’s perspective:
1) I’d like to know how well the 3 high school honor graduates knew John. Were they aware of his story, his successes? It’s tough for an 18 year old, from a lower middle class background to make an extra effort when they have no connection to the person making the offer. If they aren’t exposed to that person or people like John on a day-to-day basis, then they don’t have the thought process to see it through.
John’s grandchildren, on the other hand, were probably around John on a more regular basis. They saw how he lived, how he talked. They had a deeper connection to his way of life.
Also, don’t sell short the idea of a relative asking you do a task versus a stranger asking you to do a task. The grandchildren are going to see John again on several occasions – the high school honor students may not see him again.
2) Another issue here is the economic point of reference in this situation. It plays into Daniel Kahneman’s book “Thinking Fast and Slow”. Kahneman is a Nobel Prize winner in Economics and his book delves into several psychological areas of money.
The grandchildren (I’ll assume) are living at least a middle class lifestyle. $500 is great, but they know that another $500 is better. They can picture themselves using, spending, or investing the extra $500.
The lower middle class honor students look at $500 as a huge windfall. They may never have had $500 in cash, or in the bank. Having $500 all of a sudden is the most money they have seen. They can’t believe they received it to begin with. It’s a shock.
Now imagine receiving an unbelievable amount for the first time in your life at age 18, and you have not seen family or friends receive that type of windfall. They received it for doing nothing (they can’t equate being an honor graduate with getting the $500). So an unbelievable event happened. They don’t comprehend that it can happen again, nor do they have plans or visions on what they can do with the extra $500. The second $500 is not real to them.
Plus, for this extra $500 they have to read a book and write a paper. As an 18 year old who has never been paid to read and write a paper, can you imagine how your brain may fail to comprehend this as a valid proposition? Their thoughts could be, “how good will that 2 page paper have to be – to be worth another $500?” They already have the first $500 – which is an amount they never received before.
The honor student’s point of reference for the extra $500 is far different than the grandchild’s point of reference.
That’s easy. The individuals in the participating group were related. In today’s world, if some stranger offers you $500 to do something trivial, there is usually a catch. When going to collect the $500, I would worry the guy would answer the door without any pants on. No thanks; keep you money.
Could it be that the grandchild’s motivation wasn’t the money it was the competition that Carl created amongst them – the top reviewer received the most money while the other two received only half as much.
To think I actually PAID to read the book. More fool I.
I’m astounded by the number of excuses being offered for why the lower middle class kids wouldn’t take such a small effort for such a big payback. To say I was lower “middle” class at their age would be a stretch, but I was an honor student, and would’ve been working on the assignment for $5! I did dirtier jobs. Then again, I’m probably a lot like John now for those efforts.
I never voted for redistributing anyone’s wealth to me, or cried that life was easier for others. Anyone care to bet how these two groups, “privileged” grandkids of a millionaire, or the “poor” honor students who were offered twice as much as those “rich” kids without even having to prove themselves in competition as the riches did, will spend their voting lives? I sure hope I’m never in a position to hire, or have to work with, those (unbelievably lazy) “honors” kids. Edison said ‘Most people miss opportunity because it shows up in overalls and looks like hard work’. Too many people today, can’t even recognize it when it’s seated at a comfy desk with bunny slippers on and a snack in hand.