by Lewis Schiff
Adopting an autonomy orientation can help get you through a lot of situations that most people would consider controlling, primed for what I’m calling Paycheck Paralysis. The reason is that the actions you choose to take help create the social context in which you live. Certainly that was the case with Laliberté and Hirst. Rather than bemoaning the low pay and poor job opportunities for circus performers in Quebec, Laliberté has created thousands of circus jobs that never would have existed without Cirque du Soleil, and become a billionaire in the process. Hirst changed his life, and changed the art world in the process, by thinking about money with the same creativity he expends on his art.
Deci writes in his book Why We Do What We Do:
Rather than waiting for the world to give them what they want, people can become more proactive in making things happen for themselves. They can get the interactive process working on their behalf by behaving more autonomously. They can elicit from the social context more and more support for their autonomy. Their personality and the social contexts in which they operate are synergistic, and together they affect people’s experiences and actions.
Synergistic. I added the emphasis in Deci’s quote. To be autonomous, to do what you love and follow the money, you need to make choices most people are too afraid to make and ask for things most people are afraid to ask for. When you do these things, you impact your surroundings and help create a new reality. To see this kind of autonomous synergism in action, read on for the story of yet another artist, a Hollywood character actor named John O’Hurley.
The Peterman Principle
On May 14, 1998, John O’Hurley bought a full-page ad in the entertainment trade newspaper Variety. It featured the following note addressed to the cast and crew of the recently ended megahit sitcom Seinfeld.
As I stand here knee-deep in the amber waters of the River Ganges, elbow-to-elbow with the fishwives of New Delhi, learning the gentle art of river laundering and putting a last-minute spit shine on a pair of baby-blue boxer shorts, I watch the slow parade of boats as it passes by me on the sunset of this never-ending river. I’m reminded how grateful I am to have docked at your port of call for as long as I did. For me the horizon will always be just a bit out of reach, and that is why I continue sailing. I wish you all extraordinary lives.
—Jacopo Peterman
For three years in the late 1990s, John O’Hurley appeared on Seinfeld as the clueless adventurer and pompous catalog company owner J. Peterman. It was a fairly small role. O’Hurley appeared in just 20 of Seinfeld’s 172 episodes, mostly in the final two seasons of the show’s nine-year run.
Small as the role was, it was also extremely memorable. Fifteen years after the last Seinfeld episode was aired, it has been impossible for O’Hurley to walk anywhere without hearing people yell “Hey Peterman!” Most call out from behind his back or across the street, but others come right up and say it to his face. And it doesn’t just happen when he’s in the United States, since, according to O’Hurley’s biography, Seinfeld reruns are broadcast in 85 countries around the world.
Many actors consider this kind of notoriety cancerous to their careers. It leads to typecasting, in which they become so completely identified in the public mind with one character that no one in the television or movie business thinks they’re good for anything else. This is partly why the actors who played the two dozen or so best-known Seinfeld characters on the show have fled from the roles and tried to make everyone else forget them.
Patrick Warburton, who played the dumb car mechanic David Puddy in nine Seinfeld episodes, is typical. He told the Los Angeles Times in 2001 that “it’s your responsibility as an actor to reinvent [yourself].” Typecasting, he said, is for actors who either want to do the same role or can’t do anything else. “That’s neither for me.”
O’Hurley, on the other hand, seemed to think this was a false choice he didn’t need to make. He was like the students in Ed Deci’s Soma experiment who took the money and enjoyed the game. He began his post-Seinfeld career with that Variety ad promoting his Peterman identity. He popped up in TV commercials for Xerox, playing the Greek god Zeus with the Peterman voice. He did radio station voiceovers with the Peterman voice. An online video-tech company needed a spokesman and O’Hurley signed up, on the condition that he get an equity stake in the parent company. In 2006, O’Hurley told Businessweek that his “Peterman-as-pitchman” character was worth seven figures a year as “that Mr. Magoo-type buffoon who can say anything for corporations.”
So did typecasting as Peterman cause other work to dry up for O’Hurley? Not at all. O’Hurley made his Broadway debut in a production of Chicago. He played King Arthur in the touring company of the Monty Python show Spamalot. He won the 2003 Dancing with the Stars competition. He costarred with Loni Anderson that year in a short-lived sitcom called The Mullets. He hosted Family Feud from 2006 to 2010. O’Hurley even branched out beyond performing. He wrote a little book about life lessons learned from dogs, called It’s Okay to Miss the Bed on the First Jump. It made the New York Times bestseller list. He composed an album of classical keyboard music. It made the Billboard charts.
The real-life J. Peterman didn’t adapt to life after Seinfeld nearly so well as O’Hurley. The catalog company took up an over-aggressive growth strategy that landed it in bankruptcy in 1999. Then in 2001, in an irony of all ironies, O’Hurley met with the real John Peterman and made a deal to buy back from creditors the J. Peterman brand name. Today, O’Hurley is a top investor and board member in the resurrected J. Peterman company. The catalog now offers an $89 “O’Hurley golf shirt.” O’Hurley told one interviewer that the J. Peterman character “has changed my life in ways that are inconceivable. And now that I own the company, I’m very happy to keep that franchise alive.”
Until now, I’ve focused this chapter on people who come from fairly extraordinary circumstances and make the most of them—fire breathing, writing a bestselling book, or putting a rotting cow head inside a glassed-in artwork. This is a different issue. Why, given more or less the same opportunity as John O’Hurley, did all the other actors from Seinfeld flee from their associations with their characters? What made O’Hurley so different? The question leads back to Deci and his colleagues at the University of Rochester.
Much of Deci’s work these past thirty years has surrounded the question of how workplaces can become more “autonomy supportive.” The hope is that if organizations set up systems that allow employees to derive more intrinsic joy from their work, the employees would be more productive because they would feel as though the workplace was supportive of their autonomy.
The problem is, as shown earlier, that not everyone agrees on what an autonomy-supportive environment is. Some people are more prone to feeling controlled than others, so the same boss or circumstance that feels threatening to one person can appear challenging to another. One study showed how medical students who rank high on autonomy orientation are more likely to view their instructors as being very autonomy supportive, whether those instructors are or aren’t. Some instructors might be extremely controlling, but the autonomy-oriented students don’t recognize them as such.
Opportunity is truly in the eye of the beholder. Of the entire Seinfeld cast, O’Hurley was the only one to see how sweet it is to be part of the most watched, most successful comedy in television history. All the other actors on Seinfeld saw their characters differently, as threats to their freedom, as potential sources of control that could put straitjackets on their careers.
To O’Hurley, Peterman isn’t a straitjacket at all. He is wearing the Peterman character comfortably—as he might an English Travel Jacket (page 22 in the J. Peterman catalog)—all the way to the bank.
3
Save Less, Earn More
ABOUT 9 IN 10 SELF-MADE MILLIONAIRES SAY “IT’S IMPORTANT IN NEGOTIATIONS TO EXPLOIT WEAKNESSES IN OTHERS.”
AMONG THE MIDDLE CLASS, JUST OVER 2 IN 10 AGREED.
The Wonder Bread Way to Wealth
When Suze Orman rec
alls her life before she became the nation’s top financial guru and a media superstar, she talks about money the way recovering addicts or reformed sinners testify to their struggles with temptation.
In 1987, Orman was thirty-five years old and drowning in debt. She had her own small financial-planning practice in the San Francisco Bay area, and was leading what she admits was an overleveraged lifestyle. Her small house was mortgaged to the hilt. Her leased BMW cost $600 per month. Her credit card debt topped $100,000. At one point, Orman confesses, she dipped into her 401(k) retirement fund just to buy a $7,500 Cartier watch.
Since those days, Orman has made a fortune by scolding her millions of fans for indulging in far more modest excesses. Through nine bestselling books and repeated appearances on The Oprah Winfrey Show, Orman urges her followers to stop squandering dollars on frivolous luxuries and sock away that money by investing for retirement.
Orman’s 1999 book The Courage to Be Rich provided five full pages of suggestions about how to save your way to wealth. Do you really need to eat French baguettes instead of Wonder bread? Is designer underwear a necessity or a luxury? Why not get rid of that fancy fragrant hand soap? “If you’re not on a course of getting rich but want to be, you have to change course; it’s that simple,” Orman wrote. “To choose rich is to make every penny count . . . and to choose your luxuries very, very carefully.”
Orman is so certain that saving is the path to prosperity that you would think she would have her own personal story to share, that she is living proof of what she preaches. You might be curious to hear how, by making every penny count, she completely turned around her own once-hopeless financial situation. But Orman can’t tell you that because that’s not what she did.
Orman dug her way out of debt not by saving more, but by earning more. She deployed her Business Brilliant skills, relied on the work that she loved and followed the money. While mired in debt in 1987, she landed a big new corporate client with a lucrative contract to provide retirement planning for its employees. Orman was paid $250,000 in a single month for her services, and all her spending sins and overindulgences were absolved. She didn’t need to sell her house, trade in her BMW, or buy herself some cheaper underwear.
Orman commonly advises that it’s not enough to cut back on spending to get out of debt. Debt-ridden people, she says, should sell off their luxury items at a loss in order to start saving their way to wealth. So is that what she did with that $7,500 Cartier watch she bought with her plundered 401(k) funds? No. She gave it away to a friend.
Today Orman is only the most famous of a breed of personal-finance celebrities that has proliferated since the 1980s, when the popularity of IRAs began the rapid growth of households with stock holdings to 90 million today. These authors and media personalities all sermonize from the same fundamental gospel—that pinching pennies is a sure path to prosperity if you spend less, save more, and invest those savings in stocks and tax-advantaged mutual funds.
Newsweek columnist Jane Bryant Quinn was the queen of the movement until Orman dethroned her. David Bach and Robert Kiyosaki are the kings, while Ed Slott, CPA, has secured a lucrative niche in public television with his Stay Rich Forever infomercials in which he claims you can “parlay your IRA into a family fortune.” (Full disclosure: I coauthored a book in 2001 called The Armchair Millionaire which extolled many of the same essential practices but with the aim of financial security, not a promise of riches.)
This message of personal frugality resonates deeply with the middle class. In the Business Brilliant survey, about 7 in 10 middle-class respondents agreed that “cutting back expenditures to help accumulate wealth” is important to their financial success. About the same number cited “cutting back on little luxuries” as being important. The 2008 financial crisis failed to shake middle-class confidence in these ideas, despite the devastating toll exacted on many retirement accounts. In fact, the surveys conducted before and after the crisis showed almost identical levels of support for the idea that you can save your way to riches.
Self-made millionaires, though, take the extreme opposite view. Only about 1 in 10 say that cutting back on little luxuries or reducing expenses has anything to do with accumulating wealth. To self-made millionaires, financial success is achieved by increasing what comes in, not restricting what goes out. Savings are a fine thing, but those who have gotten wealthy didn’t get there by saving. Savings and investments only preserve what you’ve gained by other means, by working and following the money.
Anyone who has taken a serious look at self-made wealth knows this very well. When my old boss, Worth magazine founder W. Randall Jones, took two years to interview dozens of billionaires for his book The Richest Man in Town, he came up with twelve commandments of wealth drawn from what he learned in those interviews. None of those commandments involved thrift, saving, or investing. The British media mogul Felix Dennis can be a fanatical skinflint when it comes to running one of his start-up businesses. He brags about underpaying his employees and depriving them of company cars and cell phones. But Dennis spares no expense on himself. He writes in How to Get Rich that he has shelled out $790,000 on French wine alone over the past 20 years. “I spent a hell of a lot of what I made on sex and drugs and rock n’ roll,” he says. “The rest,” he adds as a joke, “I wasted.”
Despite all the evidence to the contrary, Orman has built her financial advice empire by convincing the middle class that cutting back expenses and hoarding the savings is some special discipline mastered by the wealthy. “Count every penny and make every penny count,” she writes in The Courage to Be Rich. “How many of us do that? The rich do. I can promise you that.”
Not to pick on Suze, but I don’t know how she can make such an outrageous promise. My business brings me in touch with a lot of people who are rich by Suze’s standards and all of them are too busy earning dollars to count pennies. Orman herself travels in fairly wealthy circles, so she must know better. In 2007, she told the New York Times that she spends at least $300,000 per year flying on private jets. That’s probably a sensible expenditure, since her calendar is so crowded and her time is so valuable. But it’s also an extreme example of why the rich don’t count pennies. Their time is much better spent making money than saving it.
All the famous frugality gurus know this, as well, because they’re all enriching themselves by earning more, not saving more. Quinn, Slott, and all the rest have made their money by applying their Business Brilliant skills to their careers. So when Orman claims that by scrimping and saving “this is how you get rich, financially speaking. Little by little,” she’s only half right. It’s true enough that wealth accumulates in incremental stages. But those who achieve wealth do that by making opportunities count, not pennies.
On the other hand, this is a good place to acknowledge that a lot of people don’t want to be in business for themselves. What about them? If your earning potential in the coming year is constrained by the size of a weekly paycheck, doesn’t it make sense to cut back on spending and save what you can? Of course it does. It makes perfect sense. It just won’t make you rich. Your savings are your savings. They’re good to have but they are not the road to wealth.
From my perspective, the most damaging thing about the savings gospel is that it distracts people from where the action is—earning more money. Let’s make the issue very simple for the moment. Let’s pretend you have no interest at all in any of the other Business Brilliant principles described in the coming chapters. You want to earn more, but none of the strategies for doing it appeal to you. There is still one thing you can do to earn more money that doesn’t take any special talent, new skills or effort.
You can ask.
The odds are that the sole reason you’re not making more money at your job today is that you haven’t asked for more money. It’s true. By some estimates, about 3 out of 4 workers starting new jobs neglect to ask for more money upon taking their positions, even though 9 out of 10 hiring managers say they are ready to pay
more if they’re asked. Of the 1 in 4 employees who do ask, most of them ask badly and they don’t ask for enough. Millions of people struggling to save nickels and dimes the Suze Orman way have passed up thousands of dollars in their places of work, dollars that were literally there for the asking.
But how many people bother to ask? Let’s quote Orman for the answer:
“The rich do. I can promise you that.”
The $1,000 Minute
In 1995, Linda Babcock was an assistant professor of economics at Carnegie Mellon University when a group of female students came to her with a complaint. A number of new courses were being taught by doctoral candidates in the coming semester, and all of the instructors were men. To the women, it felt like they had been denied the opportunity to teach because of their gender. They felt excluded, as though the department was being run like an old boys’ club. They asked Babcock to look into it.
When Babcock broached the subject with the economics department head, she got the other side of the story. She learned that teaching positions had been awarded to doctoral students who had approached the department head with detailed proposals for new courses. All the students who did this happened to be male. There was no intent to discriminate against women. The men were granted teaching assignments because they asked for them. The problem was that the women didn’t ask.
Following that conversation, Babcock and a few of her colleagues conducted a salary survey of recent graduates from the university’s master’s degree program in public policy. The results showed that despite having qualifications and credentials similar or identical to their female classmates, the men’s salaries averaged 7.6 percent higher than the women’s. Babcock and her colleagues weren’t too surprised by that result, because for years salary surveys in all kinds of professions have shown similar earnings gaps between the sexes. These gaps are commonly assumed to be evidence of gender bias in hiring and compensation.