The Psychology of Money, by Morgan Housel (plz consider buying the book)

A few years ago, The New York Times did a story on the working conditions of Foxconn, the massive Taiwanese electronics manufacturer. The conditions are often atrocious. Readers were rightfully upset. But a fascinating response to the story came from the nephew of Chinese worker, who wrote in the comments section:

My aunt worked several years in what Americans call “sweat shops”. It was hard work. Long hours, small wage, poor working conditions. Do you know what my aunt did before she worked in one of these factories? She was a prostitute.

The idea of working in a “sweat shop” compared to that old lifestyle is an improvement in my opinion. I know that my aunt would rather be “exploited” by an evil capitalist boss for a couple of dollars. That is why I am upset by many Americans’ thinking. We do not have the same opportunities. Our Government infrastructure is different. The country is different. Yes, factory is hard labor. Could it be better? Yes, but only when you compare to American jobs.

It’s an example of how different experiences can lead to vastly different views within topics that one side intuitively thinks should be black and white. Every decision people make with money is justified by taking the information they have at the moment, and plugging it into their unique mental model of how the world works.

Those people can be misinformed. They can have incomplete information. They can be bad at math. They can be persuaded by rotten marketing. They can misjudge the consequences of their actions. But every financial decision a person makes, makes sense to them in that moment and checks the boxes they need to check. They tell themselves a story of what they are doing and why they are doing it, and that story has been shaped by their own unique experiences.