Richard Branson and some friends jetted into outer space recently — at least for a few minutes. I am trying to write this article without Richard getting mad at me. In fact, I hope he comes to see me as his buddy.
Most people are familiar with the six degrees of separation concept. The theory is that each of us is only six relationships away from being connected with anyone else on the planet. You know somebody, who knows somebody … up to six times. None of us is that far from being in relationship with anyone else on the planet. We’re all connected.
Yet there is a dark side to the six degrees of separation. They are aptly named as degrees of separation, not of connection. As we go up the money ladder, we actually get further and further separated from each other.
I am a former real estate owner and landlord. (You don’t use “landlord” with your tenants; you say “owner”.) In my landlord history, I have experienced several degrees of separation. Each of these degrees pushed me further away from people as human beings.
Here is how it works.
First degree: I owned a house in Brooklyn where I lived and had three tenants. I and my wife would generally see at least one of the tenants every day – especially Mrs. Bandini, who was always around.
We knew the tenants. We had some involvement with their lives. Norby would tell me how hard the supervisory aspect of his job at the bank was. When my family was going to expand, we took over the second floor — Norby’s apartment. I was concerned that he and his wife and child were going to have to move out.
Second-degree: I also had another little three-story brick building in Brooklyn. I used the bottom floor for office space and rented out the other two floors. So,I didn’t see the tenants often – certainly not on weekends. (Just using the word “tenant” starts to separate me from them as human beings. It is not as crude as saying “rent-suppliers,” but it starts moving in that direction.)
I did see Mrs. Brown once in a while. She would tell me: “Rain is forecast for tomorrow, they already got a lot of rain in Jersey yesterday, my son lives there, but he works in the city, and his wife used to work in the city, now she moved jobs to be closer to the kids .…” “Goodbye, Mrs. Brown, nice to see you. Have a nice day.”
As you can see, I am not saying that being in touch with these people regularly was especially delightful, but at least I did have contact with them as human beings.
Third degree: Then, I bought some houses in Denver, which a Realtor friend, Barbara, managed. I never met the tenants. Sometimes Barbara would report on them: “Manuel got laid off for a couple of weeks, so he’s behind on the rent. But he said he is starting back on Monday and can send in partial payments every two weeks.”
“Barbara, just tell me how much money I can take out of the account this month.”
At this third level, I had virtually nothing to do with, no relationships with, the tenants, the people who were paying my mortgages and giving me a little profit. I had contact with Barbara, but I had virtually no idea about the lives of the tenants. That was her job; that’s why I was paying her – to handle the headaches for me.
Isn’t that a wonderful word for tenants — “headaches”!
Fourth degree: I didn’t move up (I should say move down) to this level of separation, but it might have looked something like this: I own three apartment buildings, with a supervisor for each and an overall manager. I get monthly statements from the manager and an email once in a while. I might email back saying, “Why did repairs shoot up 12% this month?”
At this degree of separation, I have no contact with the tenants or supervisors, only the manager. I don’t have to deal with the drama of the specific human beings who are working and paying off my mortgages and giving me some cash flow on the side. With email and texting, I hardly have to talk to anybody.
Fifth degree: Then I sell my apartments for shares in a REIT – I now own a “basket” of real estate holdings in the stock market. There is no human contact at all. I just look at the numbers: Is the stock going up or down? Is my dividend going up? With direct deposit into my account, I don’t even get an envelope with a check in the mail.
Sixth degree: The REIT is now part of a mutual fund or ETF, which I own shares of. I no longer have to worry about how it is doing as an individual stock or company. I don’t have to worry about any people. I didn’t have to do that on level five either, but now it’s safer for me — theoretically.
I don’t have to worry about whether one company or one industry isn’t doing well because I have a basket of stocks to spread the risk. The other companies will hold up my share value in case an individual company doesn’t do well. I have come a long way from being concerned about how Norby is doing at the bank or whether Mrs. Bandini has a cold today.
Every one of these human beings along the line is investing their life energy and labor for me. I get separated from the personal pain — or pleasure — they are having in doing so. Not that a lot of property managers and people managers and company managers and corporation managers don’t care about those whom they manage. Most actually care, but as you separate from people, it becomes easier and easier to be concerned only about money itself and to forget about where it comes from.
Back to Richard Branson and the rich: Their little jaunt into space is a good metaphor for how we separate further and further from the real lives of real people. We all do that, as we increase our income.
One suggestion, Richard, of lessening the degree of separation between the rich and the poor might be to fly your next group of customers to Burundi, the world’s poorest country, instead of into outer space. They could connect to people there, rather than separate from them, as we all do every day.
The overwhelming majority of Burundians live on $1.25 a day or less. The cost of a Branson ticket to fly to space is $250,000. (Mr. Branson already has 600 reservations!) One customer could double the income of 200,000 Burundians for a day if they chose to do so.
Something is not right about the financial world we have created. I’m picking on you, Richard, because you happen to be in the news. I direct my comments, however, to everybody in the world, including myself. I hope you can work your way down through the five degrees that separate me from you so we can have a conversation about this. Maybe I can locate Norby to join us and a Burundian.