More Embarrassing Than Sex: Alex Mayyasi on Why Money Talk Makes Us So Nervous

“There are parts of the business and finance world that are invested in making these things seem intimidating and scary. We really enjoy making things more approachable.” — Alex Mayyasi

What’s the last taboo? The thing that we are totally embarrassed to discuss? No, not sex. It’s money. At least according to Alex Mayyasi — frequent contributor to NPR’s Planet Money — who has just published Planet Money: How to Live Richer, Spend Smarter, and Afford the Life You Want, a field guide to the big economic forces that shape our working, saving, loving and leisure lives.

Mayyasi argues that money is the last taboo. We talk openly (perhaps too openly) about our sex lives now. But we still don’t talk about our money lives — not with spouses, not with parents, not with our children. Companies that have tried full salary transparency report uncomfortable conversations about race and gender. Thus the need for Mayyasi’s new book. It’s not exactly porn, but Planet Money is designed to liberate us from our last taboo.

Five Takeaways

•       The Economy Was Invented During the Great Depression: If you asked someone a hundred years ago how the economy was doing, you’d get a strange look back. The concept didn’t exist. It was the Depression that forced the question — because Roosevelt and his advisers had no way of knowing whether the New Deal was working. An economist was tasked with the Don Quixote-like job of counting every transaction in America to produce a single number: GDP. We have lived inside that number ever since.

•       Money Is More Embarrassing Than Sex: We talk freely about sex now. We still don’t talk about money — not with spouses, not with parents, not with children. Mayyasi advocates for salary transparency, even though companies that have tried it report uncomfortable conversations about race and gender pay gaps. The discomfort is the point. Maybe we need a Freud of finance to liberate us from the last taboo.

•       Financial Time Travel: Markets give us the ability to move money through time — into the future through saving, or from the future to the present through borrowing. Student loans are the most relatable form: young people pulling their future income backwards to fund the human capital they need to earn it. Consumption smoothing across the life cycle is a perfectly valid use of debt, as long as you don’t assume the future will be richer than it actually turns out to be.

•       Productive Risk Versus Nihilistic Gambling: The GameStop ride looks quaint compared to today’s parlay bets on whether a certain word will appear in the State of the Union. Higher risk, higher reward is a continuum, and savvy careers are built on calculated risks. But there is a difference between productive risk — the kind that builds businesses and careers — and the nihilistic flip of a coin. Knowing the difference is half of financial literacy.

•       Bobby Bonilla and the Magic of Compound Interest: Bonilla agreed to defer his $6 million Mets salary for decades. Every year, the Mets still send him a cheque for over $1 million, which drives Mets fans insane. It looks bone-headed, but it is exactly how every successful retirement plan works: give up consumption now, let compound interest do its work, enjoy something like $30 million in the future. Bonilla was savvier than his critics. We can all learn from him.

About the Guest

Alex Mayyasi is a writer and frequent contributor to NPR’s Planet Money. His new book, Planet Money: How to Live Richer, Spend Smarter, and Afford the Life You Want, was published this week.

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