Hammond - Mind Over Money

Also by Claudia Hammond

Time Warped
Emotional Rollercoaster

MIND OVER MONEY

The Psychology of Money
and How to Use It Better

CLAUDIA HAMMOND

Published in Great Britain in 2016
by Canongate Books Ltd,
14 High Street, Edinburgh EH1 1TE

www.canongate.tv

This digital edition first published in 2016 by Canongate Books

Copyright Claudia Hammond, 2016

The moral right of the author has been asserted

British Library Cataloguing-in-Publication Data
A catalogue record for this book is available on request from the British Library

ISBN 978 1 78211 205 1
eISBN 978 1 78211 207 5

Typeset in Plantin Light by Palimpsest Book Production Ltd, Falkirk, Stirlingshire

For my sister Antonia and my nieces Florence and Matilda

CONTENTS

Where our relationship with money starts, why money is both a drug and a tool, why we hate to see money destroyed and how it wards off our fear of death

Why were so attached to familiar forms of money, why we think coins are bigger than they are, why its good to be grumpy if you dont want to get ripped off and why paying with cash might be better than credit

Why the more an item costs, the more careless with money we are, why we should all use psychological moneybags and how certain budget airlines could have saved themselves a lot of grief

How we hate losing money more than we like making it, how Puerto Rican monkeys helped a researcher understand the financial crisis and why its a mistake to choose the same lottery numbers every week

Why a high price is not always a sign of quality, why your brain is a wine snob, why sometimes wed rather pay more than we need to, why you shouldnt be fooled by the mid-priced option and why you should never open a caf called the Zero Dollar Diner

Tips for waiters, why a light touch is best and the problem of the shared bill

How money makes you run to catch that train, why paying children to do better in exams has mixed results, why its only worth introducing financial incentives if you can keep paying them long term, and why small payments can help people quit drugs and cigarettes

Why if you pay someone they might be more likely to turn to Playboy in their break, why praise is often a better motivator than money (but dont overdo it), why you should never pay friends for favours and why the England football team always loses in the penalty shoot-out

Why its best not to empty your wallet in front of friends, why a free gift of thousands of pounds can be insulting and why large bonuses might be counterproductive

Why some people have lots, why most of us want more, why enough is never enough and how having more can make you happier (sometimes)

Why being poor can reduce your IQ and lead you to make bad financial decisions, and how you wont get a lot of sympathy from everyone else

Why rich people would be the first to jump in the lifeboats on the Titanic, why envy is bad sometimes but not always, why well tell lies for money (as long as its a substantial sum) and why some people cant resist throwing money away

Why giving money away (and even paying tax) increases our happiness, why we dont always like generous millionaires and why charity campaigns might do better with less pretty children

Why speaking German could help youto save more, what Odysseus can teach us about saving and how piggy banks are helping in the fight against malaria

Why, if you want the good life, you should spend your money on experiences not things (while allowing yourself a bit of retail therapy), why buying high-quality prosciutto that you dont need might not be extravagant and why its better not to know your hourly rate

INTRODUCTION

ON THE EVENING of 23 August 1994, in a small abandoned barn on the island of Jura in the Scottish Inner Hebrides, a fire was burning. Had you stepped inside you might have thought that a newspaper archive was being destroyed. Great bundles of printed paper were alight, sending smoke and ash billowing up into the air.

Youd also have noticed that there was something a little odd about the way the paper ignited. It took a while to catch and then burned sluggishly. Eventually youd have realised that the paper was denser than the fine stock used for newsprint and the sheets were much smaller than newspaper pages. Then a torn corner dancing past in a hot air current might have caught your eye. Wasnt that a picture of the Queens tiara? Indeed, werent those 50 notes on the fire? And not just a few, but hundreds?

In fact, what youd have witnessed on that August night more than twenty years ago was the destruction by fire of 1 million. A million pounds in 50 notes. It took just over an hour 67 minutes, to be precise to complete the task. A fat hour to burn the stuff of every lottery players dreams.

The two men behind the fire were from the band KLF. They had made the money with dance tracks from the early 1990s such as Justified and Ancient and 3 a.m. Eternal. Tired of the music scene, theyd moved on to making art. For them, the burning of the million pounds was a work of conceptual art. Their first idea was to make a sculpture from bundles of notes nailed to a wooden frame. But as a sign of the taboo they were dealing with, they couldnt find a gallery willing to exhibit such a sculpture. So they had another idea.

Just burn the money.

The whole process was videoed. You can watch it on YouTube today. The two members of KLF are dressed, rather predictably, in black. At first, they peel 50 notes from a wad one at a time, feeding them casually to the fire, almost as if theyre throwing bread to ducks. Jimmy Cauty screws up every note before consigning it to the flames; Bill Drummond frisbees them into the blaze. The notes burn slowly. Some drift out of the fire and have to be gathered up and thrown back in again. After a while the K Foundation, as they called themselves by then, realise that at the rate they are going, the process will take hours. So they speed things up: chucking in armfuls of notes at a time.

Despite the video evidence, there were suspicions afterwards that the whole thing was a stunt. Would anyone really burn so much real money? To prove the doubters wrong the K Foundation had the remains of the fire tested in a laboratory. There it was confirmed that the ashes were the genuine remains of a very large quantity of banknotes.

The performance went to plan, but nothing prepared the band members for the hostility the act would induce. People hated them for it, saying if they didnt want the money why not give it to charity? People called them selfish and stupid.

After a few minutes of seeing the money burn on the video we all want to know why Cauty and Drummond did it. Okay, it was some sort of art work, but signifying what?

Surprisingly, in the many interviews theyve given over the years (you can watch these on YouTube too) the two men struggle to answer this question seeming incoherent, inconsistent, and not even convincing to their own ears.

In the official documentary Jimmy Cauty admits that what they did was possibly meaningless, that its status as a work of art is highly disputable. You can get into this whole area where its pretty black. You hear him fumbling for an explanation, falling into despair.

In one TV interview, Bill Drummond says: We could have done with the money. Cauty and he had six children between them. Only to add: but we wanted to burn it more. Then when asked what it was like to throw the notes onto the fire he says he felt numb, that the only way to do it was to operate on autopilot. If youre thinking about every fifty quid or every bundle... and his voice fades almost as though he cant bear to think about it.