By Caroline Grimont
With the proliferation of good, high-quality streaming shows available on TV these days, I don’t find myself going out to the movies as much. But sometimes, there’s a must-see movie that I hear about, and I find myself drawn to the nearest Cineplex to watch it. Not this time. This time, one of my favourite books from my childhood is being adapted (once again, I should add) for the big screen, with two of my favourite actors in the lead roles. Margo Robbie and Jacob Elordi. And the book is Wuthering Heights by Emily Bronte, published in 1847 under her pen name Ellis Bell.
Now usually my reviews are of known finance classics, or tips for life improvement, or the economics of our current moment. I thought there was no way I could make the case that Wuthering Heights, that twisted Gothic romance, could teach anyone anything about money. Until I reread it for the first time in decades. All I can say is buckle up, because I can think of a few lessons we can learn from the tragic Heathcliff and Catherine.
What’s the Story?
Here’s the question that gets asked the most. What is “Wuthering?” The word is of Northern English origin, meaning a place or weather that is characterized by very strong winds. Wuthering Heights is the name of the house in which many of the dramatic characters of the book live.
You really should read the book, because the oppressive atmosphere and gothic claustrophobia that comes across in Bronte’s writing cannot be conveyed in a precis, but in short, the book is about the people who live in two houses in Yorkshire, England – the titular Wuthering Heights, and Thrushcross Grange. Heathcliff (one name) is an orphan brought into Wuthering Heights by the Earnshaw patriarch, who quickly favours the orphan over his own two children, breeding resentment in the family, especially on the part of the oldest son Hindley. His sister Catherine Earnshaw and Heathcliff quickly become inseparable. However, when the time comes to marry, Catherine chooses Edgar Linton of Thrushcross Grange, due to his higher social position. Enraged, Heathcliff runs away.
Years later, he returns, mysteriously wealthy, and sets about taking his revenge. Heathcliff elopes with Isabella, Edgar Linton’s sister, but the relationship does not last. Enraged, Edgar banishes Heathcliff from Thrushcross Grange, but Catherine is distraught. In secret, Heathcliff visits the pregnant Catherine, who dies shortly after giving birth to a daughter Cathy, much to Heathcliff’s dismay. Meanwhile, by exploiting Hindley’s gambling addiction, Heathcliff becomes mortgagee of Wuthering Heights, and takes possession upon Hindley’s death, even as Hindley’s son Hareton inherits. Meanwhile, Heathcliff’s son by Isabella, Linton, marries Cathy, and the couple live at Wuthering Heights where Linton eventually dies.
All of Heathcliff’s antagonists now dead, he becomes increasingly unhinged, even as the widow Cathy and the wild and unschooled Hareton fall in love. Eventually, Heathcliff locks himself in Catherine’s old room, where he dies. Edgar, Catherine, and Heathcliff are all buried side-by-side.
Financial Learnings from Wuthering Heights
From the short summary of the 350-page book, finances don’t much enter the thing, so what money lessons can possibly be learnt from it? I would argue there are a few, and there are some behavioural insights that go alongside these lessons too. Here are three:
1 | Money is a Tool
When I talk to my friends and family about retirement, no one sits counting their investments as they age. They use the money to do the things that bring them comfort, joy, peace, and happiness. Money is just a tool to help you thrive. Heathcliff believes that by becoming rich, he can do whatever he wants – indeed, he proceeds to do so. But this drives him to despair, because while he had a plan to get what he thought he wanted – the destruction of the Lintons and Earnshows – he ignored what he really wanted, which was the love and acceptance of Catherine.
Behavioural Finance Insight: When I see Heathcliff and how he acts, I see two cognitive biases come into play. Overconfidence effect and confirmation biases. He is convinced that the world is awful to him, and that is all he sees, even when people like Nelly and Catherine show him love and affection. That’s confirmation bias. And once he gets money, he becomes convinced that his plan of wreaking havoc on the lives of all who wronged him will get him happiness, even though he is clearly unhappy the whole time. That’s the overconfidence effect.
Learning 1: Yes, money is good to have to achieve your goals, but you need to have goals that align with what you want, otherwise, the fruit of all your labour will be bitter.
2 | Money is Important, but so is Other Capital
Let’s be real. Catherine married Edgar in part because Heathcliff was poor, yes, but he was also dirty (like physically unclean) and uneducated. Edgar, on the other hand, offered her comfort and status, alongside the economic surety of money. Heathcliff returned with money, yes, but also seemed to have a paucity of social capital, and education, to some extent. Even if Heathcliff was not born with money, he made his own, and equally, he could have added other forms of capital to his accounts, but he did not.
Behavioural Finance Insight: Catherine chose Edgar because he was immediately there with good looks, money, and comfort. She didn’t see what Heathcliff could have become. That is present bias, a trait where we give a lot more importance to what we can see right in front of us and discount the long-term gains we get through things like compounding.
Learning 2: Money is important, but equally important are other forms of capital – social, educational – that can open doors via networks, and opportunities.
3 | Winning the Lottery is Not What it Seems
I read a CBC news report a few years ago with great interest. It quoted a report from the Philadelphia Federal Reserve that said that for every $1,000 your close neighbour wins in the lottery, you are 2.4% cent more likely to go bankrupt in the next two years, and in fact, a lottery win doesn’t even guarantee financial comfort for the winners themselves: Out of 6,578 lottery winners analyzed, 824 of them declared bankruptcy themselves within a decade, the paper found.
Wuthering Heights never clearly states HOW Heathcliff made his sudden windfall, but it comes across like he didn’t really have any emotional maturity to handle the money, but just used it to extract vengeance on all who wronged him
Behavioural Finance Insight: Don’t get caught up in sunken cost fallacy. Think of a time where you bought a stock, it tanked, but you still held on to it, hoping it would recover, because you’d already spent so much time and money on it? That’s sunken cost fallacy. Heathcliff decides that revenge is what he wants, so revenge is what he’ll get, even if he’s miserable the whole time.
Learning 3: You need a plan, and good habits, to help you stay wealthy.
Disclaimer
The opinions and views expressed in this book are those of the author and do not necessarily reflect the views of Harvest ETFs. Similarly, the opinions and views expressed in this review are solely those of the reviewer (the Author) and do not represent the views of Harvest ETFs. The Author and Harvest ETFs have no affiliation with the author of the book.
Investment decisions should be made in consultation with a licensed and experienced investment professional. This review is provided for educational purposes only and should not be interpreted as investment advice.
