The Tipping Point – Can We Make Financial Literacy Go Viral?

What’s the secret to something going viral? What causes “the latest thing” to go from early adopters into the mainstream? Why is it that back in 2008 almost no one had a smartphone, and today everyone has one? Malcolm Gladwell lets you in on the secret in “The Tipping Point: How Little Things Can Make a Big Difference.”

Note – The link to the book is an affiliate link. If you buy the book, I’ll receive a small commission at no cost to you. Thanks for supporting the site!

Although this book was published back in the early 2000’s, it’s just as relevant today as it was back them. Gladwell studies what causes social epidemics to flourish-or fall-seemingly at random but really due to factors you can predict and control. He goes through the roles of different kinds of key people that cause information to spread like wildfire, and what makes an idea “sticky”, or have staying power. As you read it, you’ll find yourself nodding or thinking to yourself “oh, that makes sense.” And if you’re like me, you just might find yourself thinking about how you might be able to use these concepts to make the world a better place.

The Tipping Point

The Law of the Few

What is it that makes someone persuasive? How is it that some people can have an idea, buy a product, or use a service and cause it to go viral-but for others the idea just stays put and never goes anywhere? Gladwell discusses the roles of three key types of people in spreading ideas-the Connectors, the Mavens, and the Salesmen (or saleswomen).

  • Connectors – These are the people with lots of connections between different groups of people. When I read the description, I immediately thought of my grandmother. She was always bumping into someone she knew wherever she went-no shopping trip could go by without her seeing someone from church, work, an old friend, the parent of one of her kids, or someone else. She, like most Connectors, was very social and loved talking to people and learning about them. Heck, she even kept in touch with old friends from elementary school well into her 80’s. Since they have so many connections among different groups of people, connectors can help ideas to spread and networks to grow.
  • Mavens – The real experts in a field, interested in digging down into the nitty-gritty details most people aren’t interested in. Mavens can tell you more than you ever wanted to know about the details of a specific car model, refrigerator, or financial product. My grandfather was a Maven. Although he wasn’t as social and gregarious as my grandmother-preferring to spend his time reading, studying up on his latest interest, or in his workshop building something – you could always count on him to provide an in-depth analysis of any topic he was interested in. Mavens not only have deep expertise, but also want to share it with you in order to help you. This, when paired with a connector, can be powerful in spreading new ideas, concepts, products, and services to the masses
  • Salesmen – These are the persuaders we run into in life. They’re not salesmen in the “cheesy car salesman” kind of way, but in the way that makes you want to buy whatever it is they’re selling-without feeling like you’ve been sold anything. A true salesman can sell ice in Alaska, hot cocoa in Florida, and shark repellent spray to Batman. Salesmen have a quality about them that’s hard to put your finger on, but they’re incredible at influencing others.

If you pair a Salesman with a Connector and a Maven, they’re a force to be reckoned with. Mavens will vet an idea extensively, putting all their expertise to work, and ensure it’s a quality one. The Salesman will persuade others that the idea has merit, and the Connector will make sure it spreads far and wide. This is most powerful when you have two or three of these traits in the same person-they can cause an idea to go from a tiny acorn into a huge oak tree almost overnight.

Stickiness – Why Some Ideas Have Staying Power

Have you ever had a jingle you just can’t get out of your head? Maybe “This is The Song That Doesn’t End” from Lamb Chop? (If you’re around my age it just got stuck in your head-sorry. If you’re not my age and you don’t know what I’m talking about, go watch this and then, I’m also sorry, it’s probably stuck in your head now).

Gladwell uses two classic children’s television shows – Sesame Street and Blues Clues – to show in detail just how the show producers got educational concepts to stick in children’s minds. Shows had to be entertaining, not confusing, straightforward, and ideally get participation from the audience. I’ve seen this at work with my older kids when they were small, and with my one year old. Their favorite shows are slow, simple, and repeated ad nauseam. If you have a child, and you’ve been forced to watch the same video over and over and over, you know what I’m talking about.

You’ll see this repeated in successful adult movies, books, advertisements – almost everywhere you look, once you learn about it. Concepts that are simple and easy to digest are memorable-complex ones are frequently forgotten. That’s why people gravitate toward “rules of thumb” like saving 10% of their income, or saving $100 per month for college. Complex ideas like calculating your exact expenses, extrapolating out 10, 20, or 30 years, predicting investment returns and inflation, determining your personal future 4% withdrawal rate-all are too complex. To be “sticky”, you need to package an idea in a simple way that makes it irresistible.

The Power of Context – Your Environment Matters More Than Your Morals

Have you ever wondered what causes some areas of town to be “bad”, and others to be “good”? Why is one street full of litter and graffiti and the next one not? Believe it or not, it may relate very little to the type of people who live there and it may be more about the context in which they live.

I’ve seen this concept play out in my house and car, with the kids making messes. One kid leaves his books in the car. The next sees the mess and figures that a little more mess won’t hurt anything, putting their water bottle on the floor. And so on, until I need to yell at someone for making my car a disaster area. The good news about this concept is that it works in reverse too – as people see things cleaned up, better behavior, less litter, etc., they’re more likely to act the same way and be neater, better behaved, and stop littering. This idea is what led to the dramatic decline in crime in NYC from the 80’s to the 2000’s. Those in charge began focusing on cleaning up in small ways, and it led to big changes in crime rates.

How Can These Concepts Help With Financial Literacy?

We all know the abysmal state of Americans finances. Forty six percent of Americans can’t cover a $400 financial emergency.  Seventy-two percent don’t know what a 529 plan is.  The average savings amount for college, which includes the wealthy and is probably skewed high, isn’t enough to pay for one year of in-state college, room, and board.  Half of Americans have nothing saved for retirement. There’s been a lot of hand wringing as to why. People blame the media, the lack of financial education in schools, peer pressure to keep up with the Joneses, and many other factors for the lack of financial aptitude.

Is there a way we can use these concepts in The Tipping Point to help spread financial literacy like a virus? What if we could make talking about your 401k or your 529 plan as cool as chatting about the new car you just purchased? If everyone knew about financial products and could explain them simply and clearly?

Many of us personal finance bloggers write because we want to help others. We’re usually Mavens on money – we enjoy diving deep into topics like what are our 401k fees or analyzing the cost of pizza take-out, pizza kits, and making your own.  Our ideas are usually a hit within our own communities online, where everyone is interested in money and usually has a higher than normal knowledge of financial information. But how can we spread our ideas out beyond our community-and into the mainstream?

Help spread the word about money. Come up with simple, sticky ideas that people can easily understand and remember. Use stories to persuade people why an idea is a good one, or how saving money can be just as fun and even more rewarding than spending it.

What ideas do you have on how we can reach the financial tipping point and send America down a better path? Do you know any Salesmen or Connectors that can help spread the word? How can we use context to help people see saving as “just something you do” rather than a sacrifice? Let me know in the comments!

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19 thoughts on “The Tipping Point – Can We Make Financial Literacy Go Viral?”

  1. High Income Parents

    Thnank you for the review and analysis of the book. I’m a big Malcolm Gladwell fan but haven’t read this one yet. I think I’ll make it next on the list.
    The awesome thing about being a finance blogger is we are organizing our thoughts daily and if the opportunity ever comes to speak to a group of our peers, we have a ton of material ready to go.
    Maybe we should all strive to seek out those who aren’t likely to visit a finance blog but might need some financial education in our schools, churches, and communities.

    1. That’s a great idea! I’ve thought about that as well, that perhaps it would be good to use all this knowledge and information in our local communities in addition to online. You never know when it will change someones life.

  2. TheRetirementManifesto

    I have lunch occasionally with an 81 year old man who has a passion about teaching folks about personal finance! He meets with various community groups (targeting teenagers) to share basic finance principles. “Need to get ‘me when they’re young”, he says, “before they’ve developed bad habits”.

    He’s an amazing guy, we can all learn from him. Together, maybe, just maybe, we can reach The Tipping Point!

  3. Fun article to read. Beneath my layer of financial navigation skills, I am really a philosopher at heart. I like thinking about this stuff WAY more than retirement accounts and investment return yields. Since I have a spiritual foundation to base my philosophies on, I really see our addiction to sin being the primary culprit to people taking control of their financial lives. It’s not that people love to be in debt, ignorant, and wasteful. What they love is the feelings of indulgence, gluttony, greed, and selfishness. Those feelings are addicting and destructive. I think the key to creating a tipping point is to make people realize there is a better way to life than being addicted to these harmful qualities. If we can get a mass population inspired to fight against these root problems, then the tipping point can create some motivation and traction. Those are just my simple thoughts on a Saturday morning at least. Fun article to think about. There’s still a lot of my personal story to come. I hope I can be part of this tipping point in the future.

    1. Interesting perspective. Money problems are indeed usually a symptom, not a cause, of some sort of other problem. It may be a personal failing like you mention (indulgence, gluttony, greed). It may also stem from poor planning or magical thinking – not thinking that death or disability can happen to you (because you’re young, healthy, a runner, etc.) and then being hit with some kind of catastrophe, like a medical event. I do think there’s just some simple ignorance at play as well. If you only consume media that encourages spending and normalizes debt, and your family/community also reflect those values, then you may not know there’s a different way to live. Hopefully we can all be part of the financial tipping point in the future!

  4. Thanks for the review, and reminder, CMO. It’s been a while since I last read The Tipping Point. Actually, it probably wasn’t inside this decade… (starting to feel old, here!) But the ideas promoted by Gladwell are always good to keep in the back of your mind, especially if you’re in marketing or just in the habit of wanting to spread an idea of any kind.

  5. jumpstartfromscratch

    There is a societal norm that prevents us from talking about money. People are hesitant to state how much they earn. People whisper the cost of something, if they will quote a price at all. I find it silly, because many of the facts are easily found. Anyone can check the county website and find my salary. House assessments can be checked online easily. I frequently feel nosy and invasive questioning a product, service, or strategy. There is a guarded silence around money, and it sometimes it just makes discussions about money awkward.

    1. So true! It’s too bad we can’t be more open about money. I have several coworkers who have kids in college, and I’d like to ask them questions. Like how much does it cost, and how are you paying for it? Since my oldest is off to high school next year, college costs are on my mind. But it would be impolite to ask, so I don’t. That’s why I appreciate you posting real numbers, so I can see what real costs of college may look like

  6. ReachingTheCrest

    i’m always amazed at how little people really know or even think about finances. To me, its so much more than just money in some account. its piece of mind and eliminating so much worry from ones life. It really is sad to see people who do have a good income and career, but have no clue what to do with that opportunity. Teaching some of these basic concepts on money management in schools might be a good start.

    1. I’m so with you on money equaling more security. I read stories about people who have nothing in savings and spend every dime of their paycheck, with nothing in their checking accounts, and I can only think how stressful that would be. Having things at the expense of peace of mind just isn’t worth it to me.

  7. Thanks for sharing your review, CMO. I’ve only read Outliers by Gladwell and I really enjoyed it. I added this one to my Goodreads list.
    I am trying to think where I fit in. I have qualities of each idea spreading trait – I have many connections because of my sales job; therefore, the connector and salesmen traits are inherent. As an engineer, I enjoy digging into things to understand them better.
    Where do you fit within the three idea spreading realms?

    1. I’m more of a Maven myself. I’m definitely not much of a connector. Most of my connections are in the same realms – family, town, work. I’m not the kind of person that keeps close contact with high school classmates, or has connections in many different social circles. I am pretty persuasive though, which helps me at work when I need to convince someone to do something they don’t want to do. 🙂 So I have a bit of Salesmen, but most definitely majority Maven.

  8. I’m not sure the tipping point for personal finance, but with our new President, I’m very happy people are talking about politics and how we can build a better America.

    It used to be that political views were taboo. Nowaways, that’s not necessarily the case. I hope and dream that one day we can talk about money in the same way.

    Thanks for sharing. I’ve read a few of Gladwell’s other books – this one looks good as well!

  9. Work Life Moolah

    Great post CMO. Being so into PF as we are, it’s really a “duh” moment when we think about financial literacy, right? I had a great family growing up but finances were a struggle so I vowed to save, invest and be smart with money when I grew up. (BTW, totally remember Sesame Street and raised my kids on Blues Clues so both jingles in my head!)

    I also think there is a level of personal accountability to own ones actions…am I going to live only for today or plan for tomorrow?


    1. Agree that personal accountability is important, but hopefully if there was more of a culture of saving and investing it would help people do a better job. After all, if all the cool people drive reasonable cars and save for retirement, then it becomes cool for everyone to do it

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