Speaker 1: Welcome to How to Money.
Speaker 2: I'm Joel and I am Matt and today we're talking
Speaker 2: overcoming your Scarcity Brain with Michael Easter.
Speaker 1: Yeah, that's right. We are joined by Michael Easter. So
Speaker 1: he's the author of Scarcity Brain, and we are pumped
Speaker 1: to have him on the podcast today. And so we're
Speaker 1: talking about scarcity, right, And even though we know what
Speaker 1: the word means, scarcity is likely a concept that a
Speaker 1: few folks listening to this podcast have much experience with,
Speaker 1: at the very least in our quite developed country. We
Speaker 1: have enough food, we have enough shelter and clothing on
Speaker 1: hand that the vast majority of folks haven't felt the
Speaker 1: true impacts of real scarcity. And in fact, most of
Speaker 1: us have more than we need of all of those things,
Speaker 1: plus the countless cardboard boxes of stuff that we can
Speaker 1: also purchase to fill in any remaining containers and closets
Speaker 1: that aren't already bursting up the seams. But we are
Speaker 1: talking with Michael, and he has traveled the world. He's
Speaker 1: observed tribes and the jungles of Bolivia. He studied addiction
Speaker 1: and bombed out hotels in Baghdad. He's spoken with the
Speaker 1: top researchers of psychology in order to understand the human mind,
Speaker 1: and we're gonna be talking about how it is that
Speaker 1: we can shake some bad habits in order to live
Speaker 1: more fulfilling lives, and hopefully we'll have some great takeaways
Speaker 1: on how it is that we can view and pursue
Speaker 1: money in a more satisfying way as well. Michael, thank
Speaker 1: you so much for joining us today on the podcast.
Speaker 3: Yeah, thanks for having me. Guys. This should be fun.
Speaker 2: Yeah, we're looking forward to it, Michael. The first question
Speaker 2: we ask anybody who comes on the show is and
Speaker 2: it reveals a little bit about them. But, like Matt
Speaker 2: and I, we like to save and invest money for
Speaker 2: the future, but we also like to spend money in
Speaker 2: the here and now on things that matter to us.
Speaker 2: Craft beer is one of those, and so we always
Speaker 2: like to ask our guests what's their craft to beer equivalent?
Speaker 2: What are they spending money on intentionally, maybe more so
Speaker 2: than most people would think is wise while they're doing
Speaker 2: the right thing with their money too.
Speaker 3: Yeah, I would say my most obscene purchase is probably
Speaker 3: a nice watch. Now, I will say it's because one
Speaker 3: I just like well made watches, kind of a watchdork.
Speaker 3: But two, I also rationalize it as a business expense
Speaker 3: because in some of the places I travel for my work,
Speaker 3: having a nice bargaining chip if you find yourself in
Speaker 3: a pickle is a good thing. And certain certain brands
Speaker 3: it's like, I mean, they'll that'll get you out of
Speaker 3: a pickle pretty quick if you're like, hey, I'll trade
Speaker 3: you my watch for X y Z. So that's how
Speaker 3: I rationalize it.
Speaker 1: Okay, it's so funny.
Speaker 2: Matt just stumbled upon at a bar recently, a watch
Speaker 2: club and I.
Speaker 1: Swear local restaurants, so it's called red bar. Do you
Speaker 1: have one of those one of those clubs over there?
Speaker 3: Well maybe I don't. I nothing that I know of.
Speaker 2: Okay, but if Matt's going to get into any hobby,
Speaker 2: I'm predicting it's going to be fancy watches.
Speaker 3: So I would I would. I would tell you to
Speaker 3: avoid it. You'll save a lot of money.
Speaker 1: I do feel like I am resisting. Like Joel talked
Speaker 1: me into getting this garment, which actually maybe we'll talk
Speaker 1: about this later on as far as technology and gamification,
Speaker 1: but they were on sale at Costco, and I have
Speaker 1: been pretty happy with not only the time it keeps,
Speaker 1: but also some of the health data, the stats that
Speaker 1: it feeds me. It's amazing how much it gives you
Speaker 1: for one hundred and fifty bucks. Yes, yes, say that
Speaker 1: I'm trying to avoid the chronographs, actual fancy watches. But Michael,
Speaker 1: I feel like now is as good a time as
Speaker 1: ever to talk about habits here towards the beginning of
Speaker 1: the year. But you say that this is a quote,
Speaker 1: it doesn't matter how much gas that we give our
Speaker 1: good new habits if we don't resolve our bad ones,
Speaker 1: we still have our foot on the break. Talk to
Speaker 1: us about what you mean by that and why you're
Speaker 1: kind of obsessed with individual human behavior that's actually in
Speaker 1: our own worst interest.
Speaker 3: Yeah. Well, I mean it's rather simple that we kind
Speaker 3: of live in this world where there's all the information
Speaker 3: about all these things we should do. I mean, I'm
Speaker 3: kind of more in the health wellness psychology space, and
Speaker 3: you know, you see, it's like adopt this new specific
Speaker 3: exercise routine, add this food to your thing. We're always
Speaker 3: trying to add the next new good habit. But when
Speaker 3: you look at what actually moves the ball farthest downfield
Speaker 3: for people in terms of improving their life, improving their
Speaker 3: well being. I would imagine the exact same thing follows
Speaker 3: for finances. It's to stop doing the stuff that hurts
Speaker 3: you most. Yeah, so it's to cut out the foods
Speaker 3: that are your triggers and are leading you to gain weight.
Speaker 3: It's to stop making that purchase that is putting a
Speaker 3: massive dent in your finances. Usually, all things equal, taking
Speaker 3: away bad habits is going to move the ball a
Speaker 3: lot farther downfield than is adding good, new, shiny habits.
Speaker 3: Because if you are giving gas to those good new
Speaker 3: habits but you still have your bad ones, it's like
Speaker 3: you just got the car and with the emergency breake on.
Speaker 2: Yeah yeah, and you're just like reving the engine. You're
Speaker 2: not going anywhere. You're doing a lot of damage. At
Speaker 2: the same time, give me the elevator pitch for your book,
Speaker 2: Scarcely Brain, Like, what is it that you were trying
Speaker 2: to accomplish with this one? Because you've I mean, I
Speaker 2: was telling you before we start recording, I read your
Speaker 2: book The Comfort Crisis before I read this one. Talk
Speaker 2: to me about Scarcly Brain and what made you cause
Speaker 2: what caused you to write it?
Speaker 3: Yeah, I mean, so the underlying question of that book is,
Speaker 3: you know, everyone knows that everything is fine in moderation,
Speaker 3: and yet everyone sucks at moderation. So and so why
Speaker 3: is that right? And what is it that we can't
Speaker 3: seem to moderate? And when you look at it, the
Speaker 3: behaviors that people have trouble with is they usually fall
Speaker 3: into a handful of silos like eating too much food,
Speaker 3: buying too much stuff, information, binges online, etcetera, etcetera, etcetera.
Speaker 3: And these are all behaviors that in the past would
Speaker 3: have helped us survive. So a lot of my work
Speaker 3: it takes in evolutionary lens in our modern problems. So
Speaker 3: if you think about all the things we crave today,
Speaker 3: usually in the past they were scarce, were hard to find,
Speaker 3: and if you would have sort of overdone them, that
Speaker 3: would have given you a survival advantage. But in today's world,
Speaker 3: where we have an overload of information, where we have
Speaker 3: an overload of food, where we have Amazon Prime and
Speaker 3: a billion items that we could buy and get in
Speaker 3: twenty four hours all at our fingertips, that is not
Speaker 3: always so good for us. So we tend to we
Speaker 3: tend to overdo these things in a world where it
Speaker 3: ultimately Backfuyers.
Speaker 1: Talk to us about scarcity, Ques, Michael, because you say
Speaker 1: that they can be they can be big, but they
Speaker 1: can also be small and subtle, you know, even down
Speaker 1: to our neighbors, like buying a new car. You know,
Speaker 1: is that keeping up with the joneses like a queue
Speaker 1: in this case, you know, just the felt need to
Speaker 1: not lag behind others, our neighbors, our friends, even if
Speaker 1: it ends up meaning that we end up going down
Speaker 1: the path of falling into consumer debt. Talk to us
Speaker 1: a little bit about scarcity, Ques.
Speaker 3: Yeah, So scarcity queue is a piece of information in
Speaker 3: our environment and we encounter in our environment that makes
Speaker 3: us feel as if the resources that we need to
Speaker 3: sort of thrive and survive are scarce. So I'll give
Speaker 3: the example of, you know, neighbor buys a fancy new car.
Speaker 3: What tends to happen is that this is a this
Speaker 3: is a sort of threat to our status almost So
Speaker 3: the scarcity que is that we don't have enough status
Speaker 3: because now people buy cars, yes, to get from point
Speaker 3: A to point B, but also because cars would become
Speaker 3: a sort of status symbol. And it can be something
Speaker 3: as simple as that. A good big example that I
Speaker 3: think everyone can identify with would be the pandemic. So
Speaker 3: when the pandemic first set in, you know, all of
Speaker 3: a sudden, everyone goes, oh, I'm not going to have
Speaker 3: enough food, I'm not going to have enough toilet paper,
Speaker 3: I'm not going to have enough xyz. Right, this big
Speaker 3: scarcity que. So what does everyone do. They go to
Speaker 3: the grocery stores. They brawl in the aisle, they buy
Speaker 3: all kinds of food that they're never going to eat. Right,
Speaker 3: It's like, oh, we've got to have one hundred and
Speaker 3: tens of spam. Definitely throw that.
Speaker 2: The twenty five pound bag of rice from Costco came
Speaker 2: and clutch Michael.
Speaker 3: I believe it. But they don't have to beat that
Speaker 3: big either. I mean, there's this it's really interesting research
Speaker 3: from Vanderbilt that found that even when people have a
Speaker 3: scarcity queue, like running out of ink and a pen
Speaker 3: something as simple as that, they will make decisions that
Speaker 3: sort of let's show hoarding behavior. So they'll be like, Okay,
Speaker 3: I need multiple pens, and like they start kind of
Speaker 3: freaking out inside. And so I think that you see this,
Speaker 3: this is basically an evolutionary survival thing we have right
Speaker 3: in the past. If you had this cue that like,
Speaker 3: oh maybe I'm not going to have enough food to survive.
Speaker 3: Oh no, it would totally make sense to go out
Speaker 3: and try and hoard as much food as possible. But
Speaker 3: today it's like food is never really that's scary exactly right.
Speaker 3: I mean we throw out about a third of the
Speaker 3: food that we produce in this country, and so and
Speaker 3: this and this all obviously applies to a lot of
Speaker 3: different areas in our lives, and I think it ultimately
Speaker 3: leads people to make decisions that don't exactly make sense
Speaker 3: in the context of today.
Speaker 2: So how do we connect our brains to kind of
Speaker 2: the scarcity queue? Maybe that's tapping into some sort of
Speaker 2: primal urge that might cause us to do something that's
Speaker 2: not in our best interest because times have changed. And
Speaker 2: guess what, Like I don't necessarily need to go buy
Speaker 2: a twelve pack of pens just because I ran out
Speaker 2: of ink in the one and actually I probably have
Speaker 2: three more in the drawer somewhere that I just haven't
Speaker 2: looked for yet. Is there a way to kind of
Speaker 2: overcome that scarcity Q that kind of gets brought to
Speaker 2: your attention, but it's almost like subconscious Yeah.
Speaker 3: I think we need pretty much we need to use
Speaker 3: full heuristics. So I'll give you an example with possessions.
Speaker 3: So there are effectively four reasons why people buy stuff.
Speaker 3: The first is because stuff is a tool, Right, you
Speaker 3: use tools to accomplish something. That's how things have pretty
Speaker 3: much always been. But you can also buy stuff, like
Speaker 3: I mentioned before, for status. You buy it because it
Speaker 3: elevates you over someone else in the social hierarchy. The
Speaker 3: third reason is because possessions can help us feel belonging. So,
Speaker 3: for example, you buy a Utah jazz jersey because you're
Speaker 3: a Utah jazz fan and you want to identify with
Speaker 3: that the jaz fans, Right, it's part of this like
Speaker 3: collective thing. And then fourth is boredom. So you see
Speaker 3: that when people get bored, we go looking for escapes
Speaker 3: from it, and today we usually go on our phones.
Speaker 3: And what we look at on our phones, I mean
Speaker 3: we're seeing advertisement after advertisement, and it's never been easier
Speaker 3: before to click that ad, click through to the buy button,
Speaker 3: and then buy this thing that you go, wait, did
Speaker 3: I really need that? So in the context of this,
Speaker 3: I think you need to when you're sort of feeling
Speaker 3: like you want to say, make a purchase, you need
Speaker 3: to ask yourself what am I buying this for? Is
Speaker 3: it for status? Is it because I want to feel
Speaker 3: some sort of belonging. Can I get that elsewhere? Or
Speaker 3: am I just bored? So I run things through the
Speaker 3: heuristic of gear not stuff. So gear gears is possessions
Speaker 3: that we use to achieve a higher purpose, right, We're
Speaker 3: using them to accomplish some bigger thing that gives us
Speaker 3: deeper meaning, whereas everything else stuff is sort of like, yeah,
Speaker 3: I'm going to buy this brand because I want to
Speaker 3: look cooler than my neighbor, or I want to do
Speaker 3: this because I want to feel some belonging with this
Speaker 3: random you know, corporation, whatever it might be, or I'm
Speaker 3: just bored. And so I think trying to figure out
Speaker 3: get to the root of why you're doing what you're
Speaker 3: what you do is the key to starting to unpack
Speaker 3: larger behavior changes.
Speaker 1: So as you kind of run a purchase through that
Speaker 1: set of criteria, are some of those do you think
Speaker 1: inherently better than the others? Obviously, Like when you say
Speaker 1: something is a tool, it sounds cool, or you know,
Speaker 1: like it's it's it sounds like justified, it sounds noble,
Speaker 1: you're like, oh, no, I'm using this to accomplish something,
Speaker 1: whereas obviously boredom is that sounds like a terrible reason.
Speaker 1: But I feel so I feel like the two in
Speaker 1: the middle, right, status and belonging, I feel like those
Speaker 1: are a little squishier. I feel like, in my mind,
Speaker 1: those are a little more gray. And would you push
Speaker 1: back against anybody who would be critical of somebody for
Speaker 1: buying something in order to fit in with a group,
Speaker 1: you know, for that belonging, or even to signal to
Speaker 1: others that maybe they're better, right, Like, that's basically that
Speaker 1: that conspicuous consumption that you're talking about, or that's what
Speaker 1: luxury goods are, all right, almost totally.
Speaker 3: So I think that my I'm definitely not here to
Speaker 3: pass any value judgments. I would rather just people be
Speaker 3: aware of why. Okay, So you know, I always like
Speaker 3: to say, you know, for example, let's take behaviors of
Speaker 3: using your phone too much. It's like, I don't care
Speaker 3: if someone wants to spend nine hours a day on Instagram.
Speaker 3: I really don't care. But what I want people to
Speaker 3: be able to do is make the conscious decision about
Speaker 3: them doing that, because often today we do things without
Speaker 3: really understanding what the underlying motivation is. So if you
Speaker 3: want to buy that, you know, whatever it is, certain,
Speaker 3: I'll take myself that certain watch brand. Yeah, because it's
Speaker 3: also a status symbol. It's like, all right, but I
Speaker 3: just want you to know. I just want a person
Speaker 3: to be aware of Okay, this is one of the
Speaker 3: reasons I'm buying it, because I think we try to
Speaker 3: make these rationalizations in our mind where we go, oh, no,
Speaker 3: like this is blah blah blah blah blah blah blah,
Speaker 3: and we talk ourselves into purchases that maybe we otherwise
Speaker 3: wouldn't have made if we were being honest with ourselves.
Speaker 1: Yeah, it's funny.
Speaker 2: It makes me think about how Matt always talks about
Speaker 2: using text messages. I have some friends who communicate solely
Speaker 2: be a text message, and I haven't actually talked to
Speaker 2: them and had a conversation or met with them in
Speaker 2: real life in quite a while. And Matt, the way
Speaker 2: he talks about it is like, no, it's always to
Speaker 2: facilitate in person hangs. And so if you're gonna text me,
Speaker 2: let's come up with a plan to actually make the
Speaker 2: real life hike or beer hang. Actually, you know, actually happen.
Speaker 2: Is that maybe a good way to think about it,
Speaker 2: using these digital platforms, using shot and it makes me
Speaker 2: think about buying a shirt for a bowling league is
Speaker 2: like one sort of consumption that helps you fit in
Speaker 2: versus buying that Utah jazz jersey that you mentioned and
Speaker 2: having like the three different versions but watching alone on
Speaker 2: your TV at home, but you kind of sort of
Speaker 2: feel like you fit in, but you don't really fit in.
Speaker 3: I don't know.
Speaker 1: I know that there's like like one leads to a
Speaker 1: more ultimate community, yeah, versus one that feels a little
Speaker 1: more virtual and like a little more artificial. Yeah exactly.
Speaker 3: Yeah, Yeah, I think so. And I think if it's
Speaker 3: facilitating actual interaction between people, that's great, and maybe it
Speaker 3: is online that's totally fine. But I do think that
Speaker 3: you see this a lot, you see I think where
Speaker 3: it gets a little weird is when you see corporations
Speaker 3: sort of use this as a means to get people
Speaker 3: to buy so a lot of times today, you know,
Speaker 3: certain brands have become almost a sort of religion where
Speaker 3: people buy into them because they symbolize some other social
Speaker 3: thing that they're trying to claim, yet they're not actually
Speaker 3: doing anything social behind that behind that purchase.
Speaker 1: That's right. Okay, So I guess while we're kind of
Speaker 1: talking about buying stuff on the shopping front, like there's
Speaker 1: research saying that, like with a website, it's got one
Speaker 1: of those like stupid discount wheels that you spend like that,
Speaker 1: folks end up spending more money. There are just some
Speaker 1: of these different types of ways that were incentivized to
Speaker 1: be parted with our dollars. How have you seen that
Speaker 1: play out in some of the research that you've looked at.
Speaker 3: Yeah, so I got so I live in Vegas, and
Speaker 3: I got really interested in slot machines because this is
Speaker 3: sort of the extreme end of people who just can't
Speaker 3: seem to get enough. Right, So, Las Vegas, there are
Speaker 3: slot machines everywhere and people play them around the clock.
Speaker 3: Like I can go fill up my car with gas
Speaker 3: and go into pay and there's slot machines in the
Speaker 3: gas station. There's people playing them around the clock, and
Speaker 3: you're just like, this doesn't this doesn't make any sense.
Speaker 3: So long story short is that I start this, you know,
Speaker 3: deep dive investigation into slot machines, and I end up
Speaker 3: at this laboratory that is on the edge of town
Speaker 3: in Las Vegas. But it is a sort of casino
Speaker 3: laboratory hybrid. So it's this fully working, brand new casino,
Speaker 3: but it is funded by not only the gambling industry
Speaker 3: but also big tech, and it's used to figure out
Speaker 3: what gets humans to gamble more, to buy more, to
Speaker 3: do all these different behaviors. And while I'm there, I
Speaker 3: end up talking to this guy who's a slot machine designer,
Speaker 3: and he tells me about this thing that I call
Speaker 3: the scarcity loop. And it's basically this three part behavior
Speaker 3: loop that is really good at pushing people out of moderation.
Speaker 3: So it's got three parts. It's got opportunity, it's got
Speaker 3: unpredictable rewards, and it's got quick repeatability. So one, you
Speaker 3: have an opportunity to get something of value that will
Speaker 3: improve your life. Two unpredictable rewards, you know when you
Speaker 3: will get that. You know you'll get that thing of
Speaker 3: value at some point, but you aren't entirely sure when,
Speaker 3: and you don't know how valuable it's gonna be. And
Speaker 3: then three quick repeatability. You can immediately repeat the behavior
Speaker 3: to try and get the rewarding thing over and over
Speaker 3: and over. So if you think of a slot machine.
Speaker 3: It's like you can win some money, you play a game.
Speaker 3: You're not sure on any given game if you're gonna lose,
Speaker 3: if you're gonna win a little, or if you're gonna
Speaker 3: win a lot, but then you can repeat that game
Speaker 3: over and over and over and over. Now, the reason
Speaker 3: why this is important is because this exact same architecture
Speaker 3: that's in the slot machine is also being put into
Speaker 3: all sorts of different products and services and media stuff today.
Speaker 3: So it's really what makes social media work. It's being
Speaker 3: put into some personal finance apps, it's what makes dating
Speaker 3: apps work. So well, there's just element elements of it
Speaker 3: all over our lives right now and giving people those
Speaker 3: unpredictable rewards. To bring it back to your question, so
Speaker 3: when you put a wheel in front of someone with
Speaker 3: a discount and they spend that wheel, there's this moment
Speaker 3: of suspense where they're not sure if they're going to
Speaker 3: get the big discount, the little discount or what. And
Speaker 3: when that lands, that's exciting and that tends to compel behavior.
Speaker 3: So you see a.
Speaker 1: Six even if it's just ten percent off.
Speaker 3: You know, even if it's ten percent off, and you
Speaker 3: see a sixfold increase in conversion rates when companies put
Speaker 3: the gambling wheel on their websites to sell something.
Speaker 1: Yeah. What's interesting too, is you spend a lot of
Speaker 1: time in your book talking about like dopamine and how
Speaker 1: oftentimes that is confused with like, oh, dopamine, it's the
Speaker 1: feel good chemical. But you clarify and I feel like
Speaker 1: more research has been coming out recently that's talking about
Speaker 1: how no, dopamine is the anticipation drug. Like it's it's
Speaker 1: the chemical that's released as we are pursuing something or
Speaker 1: as we are anticipating something, and oftentimes it's it's almost
Speaker 1: like the chase, you know, being better than the reward.
Speaker 1: Perhaps that that oftentimes we're so addicted to. Is that
Speaker 1: what we're seeing.
Speaker 3: Yeah, So there's there's different systems of the brain. Basically,
Speaker 3: there's the liking system, which is a system that is
Speaker 3: different than dopamine, but that is what actually gives you
Speaker 3: the pleasure. And then there's the wanting system, and this
Speaker 3: is what dopamine is involved in. So dopamine basically just
Speaker 3: helps you pursue the pleasurable thing. And it's also somewhat
Speaker 3: complicated because dopamine is involved in all these different processes
Speaker 3: in the body, So things can get kind of oversimplified
Speaker 3: to just like dopamine made me do it. It's like,
Speaker 3: not really, it was just kind of there, you know.
Speaker 2: Yeah, So you mentioned the scarcity loop, and you talked
Speaker 2: about gambling, and you mentioned how all these other sorts
Speaker 2: of things in our in our society are built kind
Speaker 2: of based on this some of these same wiring to
Speaker 2: try to get us to do things that might not
Speaker 2: be in our own best interest. And makes me think
Speaker 2: of an app like robin Hood, which is great democratization
Speaker 2: of investing for all, except for this potentially fatal flaw
Speaker 2: that causes people to invest their money or gamble their
Speaker 2: money thinking they're investing. It also makes you think of
Speaker 2: sports gambling. Do you have any thoughts on that? Like
Speaker 2: it's it certainly seems like the rise of sports gambling.
Speaker 2: And there's one thing about going and playing at a machine,
Speaker 2: even at a gas station to where you live or
Speaker 2: something like that. There's something very different about that than
Speaker 2: having it in the palm of your hands, like hyper
Speaker 2: optimized and targeted to try to get people to gamble
Speaker 2: away as much of their money as they possibly can.
Speaker 3: Yeah, So I think what we're talking about here really
Speaker 3: is the quick repeatability angle, so to your point, so
Speaker 3: that's the third part of the loop. So with with
Speaker 3: the slot machines, it's like the slot machine is always
Speaker 3: going to stay in the casino. You have to physically
Speaker 3: go to the casino in order to play the slot machine.
Speaker 3: But with sports betting apps, you can do that at
Speaker 3: any time for whatever reason you want. Right, And another
Speaker 3: thing that I think is really interesting with sports betting
Speaker 3: apps is they've further increased the quicker peatability by allowing
Speaker 3: people to make in game bets. So through the casino
Speaker 3: industry's eyes, one of the issues with sports betting is
Speaker 3: that you make a bet and then there's this time
Speaker 3: delay until the game is over. Right, So a person
Speaker 3: could make one bet, but then there's three hours until
Speaker 3: they might make the next bet based on whether or
Speaker 3: not they won or lost their bet on the previous game.
Speaker 3: So in order to shorten that interval, because speed is
Speaker 3: exceedingly important to the casino industry, people started a lot
Speaker 3: of the companies started allowing people to make bets on Hey,
Speaker 3: well the team score on this play. Are they going
Speaker 3: to score a touchdown? Is the next basket going to
Speaker 3: be a three pointer? All these different things that happen
Speaker 3: throughout the game, so people can make these really quick
Speaker 3: bets over and over and over as the game evolves.
Speaker 1: That's right. Yeah, and again sort of like you're saying earlier,
Speaker 1: this isn't necessarily to say that, hey, all sports betting
Speaker 1: is bad, but like you said, to be a way
Speaker 1: where as to what it is that's going on behind
Speaker 1: the scenes and how I mean, I feel like at
Speaker 1: the core of what you're writing about here with your
Speaker 1: book is that these companies are they're looking for ways
Speaker 1: to make money, whether it's through selling product, getting you
Speaker 1: to gamble, whatever it is, and as you found, they
Speaker 1: are using how it is that our brains are wired
Speaker 1: against us to cause us to continue to do that
Speaker 1: thing whatever it is, Yeah, that they're wanting you to do.
Speaker 1: But Michael, we've got more to get to with you.
Speaker 1: We got plenty more questions. We'll get to all that
Speaker 1: right after this. All right, we're back.
Speaker 2: We're still talking about overcoming our scarcity brain with Michael Easter.
Speaker 2: His new book is just fantastic And if you want
Speaker 2: a little or a lot of insight on how your
Speaker 2: own brain works and then how you can fight back
Speaker 2: against some of the ways that advertisers and companies and
Speaker 2: technology companies in particular are trying to hijack that. This
Speaker 2: book is incredible informative, Michael, I want to keep talking about,
Speaker 2: like some of the problem that in some of the
Speaker 2: ways in which companies are ever so insiduously impacting our ability,
Speaker 2: our desire to spend to part us from our money,
Speaker 2: maybe that we hadn't planned on being parted from. You've
Speaker 2: talked about some of the newer Chinese websites. There's one
Speaker 2: called Tamu, and it's funny, Matt and I we haven't
Speaker 2: talked about these sites a whole lot, except for to
Speaker 2: say that some of the stuff that it seems like
Speaker 2: there's cheaper stuff being sold on a lot of these sites.
Speaker 2: But you call them the crystal meth of shopping, and
Speaker 2: so I'm like, okay, cool, I feel like I need
Speaker 2: to do a little more digging. What makes them so addictive,
Speaker 2: what makes them so dangerous?
Speaker 3: Yeah, they use the scarcity loop probably better than any
Speaker 3: other sites. So it is the unpredictable rewards. So when
Speaker 3: you log onto Tamu, unless they've changed their site for
Speaker 3: some reason, there's immediately you can get that pop up
Speaker 3: like I just talked about with the wheel, right, and
Speaker 3: you spin the wheel and you learn you get some discount,
Speaker 3: and so then it's like, oh, I've just learned that
Speaker 3: I'm going to I'm the winner, right, And I said,
Speaker 3: you always get the big one on TIMMU, like there's
Speaker 3: no actual gamble here, So then you're incentivized to purchase.
Speaker 3: But then they have all these They use scarcity cues
Speaker 3: really well. So it's like, we only have X number
Speaker 3: of these items left, and then there's a timer going.
Speaker 3: So this leverages scarcity and urgency, which are two of
Speaker 3: the best sales tools that you can use. Right, we
Speaker 3: only have one and by the way, you got to
Speaker 3: make a decision in the next five minutes. That'll get
Speaker 3: someone to make a purchase, better, better than anything you
Speaker 3: can really use. But even even Amazon uses this. So
Speaker 3: when you go onto Amazon, if there's a short supply,
Speaker 3: it'll say only three left or only five left right,
Speaker 3: because that leads people, it makes people more likely to
Speaker 3: click that buy button. I mean, there's a good Amazon
Speaker 3: doesn't do anything on accident. They're not just being like, hey,
Speaker 3: heads up. They know that that'll lead to people making purchases.
Speaker 2: Probably, So it's really being shipped to an Amazon warehouse
Speaker 2: as they as that exists on the website, but still
Speaker 2: they want you to make you want it, to make
Speaker 2: you feel like you got to buy it now.
Speaker 3: Yeah, exactly. And you know with all these with all
Speaker 3: these levers that get pulled, and you know, they get
Speaker 3: pulled that buy all different companies for all different means
Speaker 3: to lead us to you know, eat more food, to
Speaker 3: lead us to gamble more, to lead us to buy more.
Speaker 3: I don't necessarily blame the corporations. I mean, their job
Speaker 3: is to make their job is to sell stuff, So
Speaker 3: it really becomes up to us to figure out, Okay,
Speaker 3: how can I interrupt this loop and how can I
Speaker 3: take some agency here exactly to help myself, because you know,
Speaker 3: I don't see a future where all of a sudden,
Speaker 3: the government is regulating all these shopping websites and regulating
Speaker 3: whether you know, food companies can make, how delicious their
Speaker 3: food can be, and whether gambling companies can do X
Speaker 3: y Z. I mean, gambling's pretty heavily regulated, but you
Speaker 3: know it's always going to be there. And you know, frankly,
Speaker 3: when you think of something like take social media, what
Speaker 3: makes videos compelling is that they're really exciting. They leverage
Speaker 3: on elements of the scarcity loop, and so in order
Speaker 3: to sort of slow people down watching say, YouTube video
Speaker 3: after YouTube video, you would need to ask the YouTube
Speaker 3: creators to make videos that were more boring. And it's like,
Speaker 3: do we really want to do that? No, it's like
Speaker 3: you really need to kind of kind of figure out
Speaker 3: some simple tactics that you can use to live better
Speaker 3: in this kind of strange but amazing world we live
Speaker 3: in now.
Speaker 1: Yeah. Yeah, So, as you're talking about YouTube, that made
Speaker 1: me think about like one of the anecdotes you give
Speaker 1: in your book is about a professor and he's like
Speaker 1: an architect and he was building legos with his kid,
Speaker 1: and the way his son went about solving the problem
Speaker 1: was vastly different than how it was that he was
Speaker 1: trying to solve that problem. A go ahead and share
Speaker 1: that story with folks, but then be what is it? Well, yeah,
Speaker 1: let's start there. Share that story because I want to
Speaker 1: follow up with what you said about the YouTube content
Speaker 1: creators and potentially creating less stuff and how that's not
Speaker 1: the solution. But yeah, can you talk about specifically that
Speaker 1: lego anecdote?
Speaker 3: Yeah? Yeah, So this guy his name's LIGHTI Klots and
Speaker 3: he's a professor of engineering. He's probably one of the
Speaker 3: best engineers in the country. And he's playing legos with
Speaker 3: his son and they're making this bridge. And once they
Speaker 3: go to connect the bridge, they got the two pillars,
Speaker 3: and then they connect the span to the two pillars,
Speaker 3: they find that the bridge is wonky because they have
Speaker 3: one pillar that is taller than the other pillar. So
Speaker 3: this thing is the span is in an angle. So,
Speaker 3: you know, mister engineer goes, all right, I mean, we
Speaker 3: can solve this problem. He turns around and he starts
Speaker 3: rifling through the lego bucket to find the you know,
Speaker 3: the blocks he needs in order to elevate the second span.
Speaker 3: But when he turns back with the legos, he realizes
Speaker 3: that his son has done something really interesting, and that's
Speaker 3: that he solved the problem by simply removing blocks from
Speaker 3: the taller span. Now, this solution did not occur to
Speaker 3: him in the least, like, not at all. He immediately went, oh,
Speaker 3: we need to add more resources to solve this problem.
Speaker 3: So he wonders, you know, I am I a weirdo?
Speaker 3: Am I unique? What he does is he gets the
Speaker 3: bridge and he makes it again, so it's kind of
Speaker 3: wonky with the taller and shorter pillar. And he starts
Speaker 3: taking this around UVA campus and when he has meetings
Speaker 3: with other professors and with grad students, he'll pull out
Speaker 3: the bridge and he'll say, all right, fix this, and
Speaker 3: he'll have you know, legos on the table. Every single
Speaker 3: person tries to solve the problem by adding more legos,
Speaker 3: by adding more resources, even though taking away legos is
Speaker 3: a better solution because then you have more resources. Right.
Speaker 3: So he long story short is this leads him to
Speaker 3: study this phenomenon, set up a bunch of different experiments,
Speaker 3: and he finds that basically people are programmed to add,
Speaker 3: so when we try to solve problems, we typically throw
Speaker 3: resources at them if we can, even when subtraction is
Speaker 3: the better. So it's not that adding or subtracting is
Speaker 3: any better. But if we aren't even considering subtraction, like,
Speaker 3: that's not good. Right. We want to have all our
Speaker 3: options on the table, and yet we tend to add,
Speaker 3: and as we get more and more resources, we tend
Speaker 3: to just pile on and pile on and pile on.
Speaker 1: Yeah. Yeah, And that that kind of alludes to the
Speaker 1: scarcity to bring So the reason I wanted you to
Speaker 1: share that is like, as you mentioned the YouTube creators,
Speaker 1: I guess I started to internally wrestle with man. Yes, institutions, creatives, publishers, writers,
Speaker 1: We're not necessarily going to slow down in this stuff
Speaker 1: that is created out there in the world. And so
Speaker 1: on one hand, you have creatives, and you've got companies
Speaker 1: and institutions that are going to continue to produce. But
Speaker 1: on the other hand, we have just as much time
Speaker 1: in our limited days, like we have just as much money.
Speaker 1: It's almost like, in one hand, things are going to
Speaker 1: continue to exponentially caliper in quantity. But it means I
Speaker 1: guess that on an individual level, it's more important than
Speaker 1: ever for us to figure out how it is that
Speaker 1: we can say no to a lot of that stuff.
Speaker 1: Would you say that that's true, how we can say
Speaker 1: no to just the quantities of solutions at our fingertips
Speaker 1: are food or media, right, like the information you spend
Speaker 1: a chapter talking about that there's so much that's at
Speaker 1: our fingertips. It seems like it's more important than ever
Speaker 1: for us to figure out how to regulate heart take.
Speaker 3: Yeah, yeah, totally, And I mean I think one great
Speaker 3: way to do this is, so I told you about
Speaker 3: the scarcity loop. If you interrupt or change or remove
Speaker 3: any of the three parts, that tends to reduce the
Speaker 3: frequency that you will do a behavior. So I'll give
Speaker 3: you a couple examples. Availability, so opportunity. If you can
Speaker 3: just take away the opportunity to do something, that will
Speaker 3: reduce the amount of time to do it. So a
Speaker 3: simple rule of saying, look, I'm only going to make
Speaker 3: purchases in person because that's a huge barrier to entry,
Speaker 3: or saying like I have a problem with this young food.
Speaker 3: It's so simple, but it's like, well, don't keep it
Speaker 3: in the house, right. You can change how rewarding something is.
Speaker 3: You can change the unpredictable rewards. So there's some fascinating
Speaker 3: research on cell phone use, and one of the reasons
Speaker 3: that cell phones are so interesting and compelling is the
Speaker 3: rewards through the bright screens and all the different colors
Speaker 3: you see. So when people put their phones into grayscale,
Speaker 3: that reduces how rewarding and stimulating the phone is, and
Speaker 3: people's cell phone time tends to drop by about an
Speaker 3: hour a day in studies. And then finally you can
Speaker 3: slow down the behavior as well. There's an app that
Speaker 3: I really love for people who spend too much time
Speaker 3: on certain apps, and it's called clear Space. And basically
Speaker 3: what this app does it leans on behavioral psychology and
Speaker 3: it inserts a pause before you want to use any app.
Speaker 3: So it goes, I'm sure you want to use this
Speaker 3: app when you go to open it, and you have
Speaker 3: to go yes, and it goes, okay, let's take a
Speaker 3: breath together, you know, and you have to take a
Speaker 3: breath for ten seconds, and then you have to go
Speaker 3: and then it asks you how long do you want
Speaker 3: to use the app? Because now it's like it realizes
Speaker 3: you're going to go off the rail, so you go
Speaker 3: to okay, I'm going to use it for ten minutes,
Speaker 3: and that will. I mean, it's laning on psychology that
Speaker 3: we've known work since the forties, and it definitely reduces
Speaker 3: the frequency of app use. And so I think it's
Speaker 3: finding useful tools and tricks to get around the scarcity
Speaker 3: loop are the way to combat it.
Speaker 2: Really to help us do the things we actually want
Speaker 2: to do over the long term, as opposed to the
Speaker 2: things we think we want to do right in the.
Speaker 1: Heat of the moment.
Speaker 2: Because the truth is there's a lot of things I
Speaker 2: want to do in the heat of the moment that
Speaker 2: aren't really helping me in my bigger goals. And that
Speaker 2: is what getting sucked into twenty minutes of doom scrolling
Speaker 2: is for a lot of people. At the end of
Speaker 2: the night, it's like, that's not how I expected or
Speaker 2: hoped to spend my evening. It just kind of became
Speaker 2: the default and the easy thing to do, and that's
Speaker 2: what our phones are. The data also finds that thinking
Speaker 2: about long term consequences can help cool cravings. Right, so
Speaker 2: thinking maybe about out how doing something like that, doing
Speaker 2: something negative, going down that rabbit hole could seeing how
Speaker 2: wait a second, that might actually help or hurt me
Speaker 2: in my ability to achieve the thing I want to
Speaker 2: achieve ten years down the road. How do we connect
Speaker 2: those dots. It makes me think of like a Fidelity
Speaker 2: did this study back in the day about if we
Speaker 2: just looked at like a picture of ourselves that was
Speaker 2: thirty had thirty years of age on it, where Matt
Speaker 2: and I look like we're grandpa's instead of like, you know,
Speaker 2: geriatric millennials. How that makes an impact on how much
Speaker 2: people save and invest for their future and it has
Speaker 2: a real, real impact. It helps people connect the dots.
Speaker 2: Are there other ways that we can kind of connect
Speaker 2: those long term dots in our lives?
Speaker 3: Yeah, I think it's The research on smoking is really interesting,
Speaker 3: so scientists will have smokers even just think about the
Speaker 3: long term consequences of smoking cancer things like that, and
Speaker 3: smoking behavior tends to reduce I mean, I think really
Speaker 3: it is. It is a little bit of an uphill
Speaker 3: swim because we are surrounded in so many stimulating things.
Speaker 3: And I'm also not saying that no one should ever
Speaker 3: have any fun ever again, but I do think trying
Speaker 3: to insert pause and make sure you're doing behaviors consciously
Speaker 3: is really the answer. And again, it's like people really
Speaker 3: get just trapped in this scarcity loop. It's what makes
Speaker 3: people zone out to phones, is what makes people zone
Speaker 3: out to slot machines. All these different behaviors and understanding
Speaker 3: the mechanics of that is one of the first ways
Speaker 3: to stop it exactly.
Speaker 1: Plus, you know, going in for that elementary school presentation
Speaker 1: when they brought the lungs in suspended in all to hide,
Speaker 1: you saw the oh, you saw the lungs that were
Speaker 1: the smoker's lungs, and then the lungs that were not right, Michael, Well,
Speaker 1: that's totally talking about smoking.
Speaker 2: It makes me all the changes that have happened, one
Speaker 2: to cigarette cartons, two to where cigarettes are kept in
Speaker 2: a gas station, think about what happens in Europe, like
Speaker 2: the way they label the cigarettes over there, and all
Speaker 2: of those extra roadblocks essentially to buying cigarettes are participating
Speaker 2: in the smoking community. I think has is part of
Speaker 2: what's dramatically led to a reduction in smoking. So you
Speaker 2: can't necessarily throw it all on like one thing. Oh
Speaker 2: it was it was abstinence smoking, abstinence talks in elementary
Speaker 2: school or something like that.
Speaker 1: All scared straight, right exactly.
Speaker 2: It's maybe some of that, right, But then it's all
Speaker 2: these other things too that just kind of remove smoking
Speaker 2: from consciousness and make it more of like kind of
Speaker 2: a rebrand it in like a grotesque sort of way.
Speaker 2: So yeah, that's fascinating. But we got a few more
Speaker 2: questions to get to with you, Michael, specifically about like
Speaker 2: how to use gamification maybe to push us on our
Speaker 2: path to achieve the things we want instead of having
Speaker 2: it prevent us from doing that.
Speaker 1: We'll talk about that right after this. All right, we
Speaker 1: are back and again we're talking about how you can
Speaker 1: overcome your scarcity brain with Michael Easter and Michael, like
Speaker 1: Joel mentioned before the break, gamification is really interesting because
Speaker 1: it can I feel like we've talked about just all
Speaker 1: the bad ways that gamification is being used against us,
Speaker 1: but simultaneously it can be a really positive thing. I
Speaker 1: mentioned my brand new garment watch that Joel talked to
Speaker 1: me in the game. But it's got this this score
Speaker 1: that I'm looking at right now. It's called VO two
Speaker 1: max and it's this singular number that I'm able to
Speaker 1: look at, And man, do I want to game my
Speaker 1: watch so that I see that number grow? By the way,
Speaker 1: It's not even possible. Come on, But yeah, talk to
Speaker 1: us how gamification how it can be so effective when
Speaker 1: it comes to our ability to change our behavior, whether
Speaker 1: for negative or for good.
Speaker 3: Yeah. Well, one thing that I'll start with, because this
Speaker 3: audience is interested in finance, is that numbers are pretty
Speaker 3: new in the grand scheme of time and space. There
Speaker 3: are are actually still some tribes in the world in
Speaker 3: the Amazon that don't use numbers. So researchers think that
Speaker 3: humans basically evolved thinking being able to count basically up
Speaker 3: to three and then everything thereafter we would use small, medium,
Speaker 3: and large designations for all different things. Yeah, so numbers
Speaker 3: get invented. I think it was about ten thousand years ago,
Speaker 3: and this very much changes our behavior and what we
Speaker 3: do because now we can quantify things, We can be
Speaker 3: more precise, and numbers allow us to really just take
Speaker 3: a big swath of some big concept and make it simple. Right, So,
Speaker 3: if you think about I'll use your VO two max. Thing.
Speaker 3: Why we care about VO two max is because it's
Speaker 3: a marker of health, it's a marker of fitness, and
Speaker 3: allowing being able to put a number on it basically
Speaker 3: just tells you how you are doing. But really, when
Speaker 3: you look at the big picture, it's like, okay, well
Speaker 3: why do we care about health? And how do we
Speaker 3: define health? And what is fitness to us? What do
Speaker 3: you mean? Right? It's a big, complicated concept with a
Speaker 3: lot of different answers. It's really murky. So what numbers
Speaker 3: just allow us to sort of understand things very quickly.
Speaker 3: And so when I think about it in terms of
Speaker 3: gamification and how it can help us, it can help
Speaker 3: people do behaviors that they want to do and easily
Speaker 3: measure their progress along the way. So with you, it's like,
Speaker 3: if you can get that, if you can do these
Speaker 3: things that are going to get that VO two max
Speaker 3: up that number, you can be rather sure that you've
Speaker 3: done some things that are probably going to move you
Speaker 3: away from disease. For me, it could be like, I
Speaker 3: don't know. I'm sure there's finance apps out there that
Speaker 3: are using gamification to get people to save more or
Speaker 3: to invest more, or to you guys would know better
Speaker 3: about those than I would. I think the problem is
Speaker 3: when we focus on the number only without asking, well,
Speaker 3: why do I care about this number in the first place?
Speaker 1: Yeah?
Speaker 2: Right, So, well that makes me think of like there
Speaker 2: was a credit union in Michigan, and then there was
Speaker 2: a bank that launched something really similar or it hasn't
Speaker 2: taken off quite as much as I would have hoped,
Speaker 2: but instead of paying higher savings rates to everybody, it
Speaker 2: had like a lottery sort of aspect to it. Right,
Speaker 2: So everybody gets paid instead of five percent, maybe they
Speaker 2: get paid two percent. But then there's winners every single
Speaker 2: week where if you hit certain savings targets, you're eligible
Speaker 2: you can win a thousand bucks, five thousand bucks, ten
Speaker 2: thousand bucks stuff like that, and that actually, even though
Speaker 2: maybe less money overall is going out to the average person,
Speaker 2: because there's a gamification aspect to savings, it pushes people
Speaker 2: harder in that direction. And that's the kind of stuff
Speaker 2: that like, it's not making companies as much money as
Speaker 2: let's say, getting people to spend. It's not going to
Speaker 2: get funded in nearly the same way. But I love
Speaker 2: to see stuff like that on the gamification side that
Speaker 2: push people towards like the good habits that we want
Speaker 2: to see them express.
Speaker 3: Yeah, totally, And I think it is you know what
Speaker 3: I think about it from a financial perspective, It is
Speaker 3: like the reason you care about saving in the first
Speaker 3: place is that you don't want to end up in
Speaker 3: a position where you are more constrained where you end up,
Speaker 3: you know, older, and you're out of money, and now
Speaker 3: you've got all these problems. At the same time, when
Speaker 3: I think about salary, it's like, we all want to
Speaker 3: see the salary number go up, But then the question
Speaker 3: is why right, because ideally it allows us to live
Speaker 3: more free or a better lifestyle. Now. At the same time,
Speaker 3: pushing the salary number up over time, over time might
Speaker 3: actually require you to do things that make you less happy,
Speaker 3: that make you less free, right, so that number. Wanting
Speaker 3: that number to go up can start to constrain you.
Speaker 3: The bigger question is like what is this what does
Speaker 3: this number stand for? Overall? Like why do we care
Speaker 3: in the first place? And unpacking that, I think everything
Speaker 3: from the number on your fitness app to the number
Speaker 3: in your bank account, to your health scores, to all
Speaker 3: these different ways that gamification gets used. It's realizing that
Speaker 3: you can use that number, the gamification as a tool
Speaker 3: to incentivize better behaviors. At the same time, knowing what
Speaker 3: the bigger meaning of that better behavior is and why
Speaker 3: you're doing that in the first place, I think is important,
Speaker 3: so you don't start just chasing the number for the
Speaker 3: sake of the number and actually have the behavior backfire.
Speaker 1: Exactly. That's true.
Speaker 2: I mean, like even with saving or investing, you can
Speaker 2: overdo it. That's something we talk about on the show
Speaker 2: here too, And so you can you can max out
Speaker 2: your four oh one K every single year for a
Speaker 2: decade and then and find that you've squandered relationships because
Speaker 2: you were working too hard and you were too focused
Speaker 2: on investing. And so that's possible too. Right, you can
Speaker 2: have the wrong short term view and hope of this
Speaker 2: like long term supposedly good ideal, But why are we
Speaker 2: maxing out our four O one K in the first place? Yeah, yeah,
Speaker 2: maybe we should be, but maybe you shouldn't be.
Speaker 1: And it's different for every person. Yeah, so sort of
Speaker 1: what Michael was saying earlier. The key to so much
Speaker 1: of this is just moderation. Yeah, and but like we
Speaker 1: are so bad at that. We're so bad at moderation
Speaker 1: when it comes to any of the different things that
Speaker 1: we allow into our lives or the different things that
Speaker 1: we pursue. But truly that is the answer, And man,
Speaker 1: it's so powerful. What you said about the numbers two
Speaker 1: is that it oversimplifies things because, like I think, we
Speaker 1: crave simplification. We crave the ability to look at a
Speaker 1: number on a watch and be like, oh, haven't hit
Speaker 1: my steps or oh my vo two Max dropped a point.
Speaker 1: I gotta get it, get out there, get these are
Speaker 1: more running. But there was a whole lot of information
Speaker 1: or quality perhaps that gets lost in that translation. Like
Speaker 1: one of the examples you give in your book, you
Speaker 1: talk about one of the wine magazines or wine websites,
Speaker 1: But how it used to be where when they would
Speaker 1: try to rate wines, folks would use big, flowery language.
Speaker 1: But what that meant was that it was inaccessible to
Speaker 1: a whole lot of folks because it was so snobbish.
Speaker 1: But then somebody came along and they attached a number
Speaker 1: too wines. Can you talk about that and how that
Speaker 1: sort of changed that industry.
Speaker 3: Yeah, so you get this guy, Robert Parker, and he
Speaker 3: started Wine Advocate magazine.
Speaker 1: Wine Advocate, that's right, Yeah, And so what he did.
Speaker 3: Is he would start giving wines a score from I
Speaker 3: think fifty to one hundred. Now, when he did that,
Speaker 3: it's simplify this really complex thing, which is trying to
Speaker 3: understand whether a wine is good or bad. Right, Like, sure,
Speaker 3: you could read a whole paragraph on twenty different wines,
Speaker 3: or you could just look at the number and go, oh,
Speaker 3: well that one got a ninety five and this one
Speaker 3: got in ninety four. Therefore that one is better. The
Speaker 3: ninety five is clearly better, and so people really latch
Speaker 3: onto this rating system. Now, the issue is that Parker
Speaker 3: was rating the wines, and so he's obviously has his
Speaker 3: own preferences and tastes and what tends to happen is
Speaker 3: that when he gives a wine a score of ninety
Speaker 3: or above, it tends to fly off the shelves, while
Speaker 3: wines that are say in the eighties or in the seventies,
Speaker 3: they don't sell quite as well. So vinters wine makers
Speaker 3: they notice this and they go, oh, we need to
Speaker 3: start making wines that this guy will like. We need
Speaker 3: we need wines that are a ninety plus by wine advocate.
Speaker 3: So that's what they start doing, and it changes this
Speaker 3: wine making tradition that had been going on for thousands
Speaker 3: and thousands of years, all because this guy's tastes and
Speaker 3: his ability to put a number on things. Now, if
Speaker 3: you don't have the same taste as this guy.
Speaker 1: Though exactly, this information is useless to you.
Speaker 3: Ye, And like the wines that you used to like
Speaker 3: from the wine maker, now it's changed because they're trying
Speaker 3: to have it be you know, good in this guy's eyes. Now.
Speaker 3: The other problem, too, is that people usually eat food
Speaker 3: when they drink wine. But if you're trying to rate
Speaker 3: something objectively, you can't have food with it. So now
Speaker 3: this has changed the whole freaking purpose of the wine
Speaker 3: and the wine making. But it's not you know, The
Speaker 3: important point is that it is not just in wine.
Speaker 3: You also see this in basically the scoring or rating
Speaker 3: of anything from movies, to books, to music, to you know,
Speaker 3: Yelp reviews, to all these different things. So numbers really
Speaker 3: allow us to simplify really complex data. That is good
Speaker 3: for speed, but we leave out a lot of nuance,
Speaker 3: we leave out a lot of accuracy, we leave out
Speaker 3: a lot of individual variation.
Speaker 2: Yeah, all right, Michael, you say scarcity is the mother
Speaker 2: of invention ideas and breaking new ground. So I don't know,
Speaker 2: give me your final thoughts on scarcity and how it
Speaker 2: impacts all of us on a day to day level
Speaker 2: when it comes to our money and when it comes
Speaker 2: to just generally our happiness in life.
Speaker 3: Yeah. There's a really interesting study that I cite in
Speaker 3: the book, and it basically took two groups and it
Speaker 3: gave them a series of problems to solve using different resources.
Speaker 3: And for one group, they gave them effectively unlimited resources
Speaker 3: to solve the problem. And so that's what the people did.
Speaker 3: They just you know, they threw resources out of they
Speaker 3: threw money at the problem, and they did solve it. Now,
Speaker 3: the other group, they had very limited resources. They had
Speaker 3: to sort of figure it out. Mcgiver fix the problem now.
Speaker 3: They also solved the problem too, except that the way
Speaker 3: that they solved it used fewer resources. Their fixes for
Speaker 3: the problem were also de more creative, more intuitive. And
Speaker 3: so I think that what happens when we face scarce
Speaker 3: resources is, like I mentioned with that other study from
Speaker 3: the Lego study, our tendency is to just try and
Speaker 3: throw money at it, throw resources at it. Right, But
Speaker 3: if we just put some constraints on ourselves and go, Okay,
Speaker 3: I'm going to sit here and I'm going to pretend
Speaker 3: that I have no resources solve this problem. How would
Speaker 3: I try and solve it without any resources? I think
Speaker 3: that one you can not only solve it, but two
Speaker 3: your problem will often be much better than you might
Speaker 3: have expected, and that saves you money over the long term.
Speaker 3: When you think about the problems that people face in
Speaker 3: their daily life and the financial means that those require.
Speaker 1: I love it. Yeah, that's that might be the best
Speaker 1: argument for less is more. Yeah, Michael, thank you so
Speaker 1: much for talking with us. Where's it that folks can
Speaker 1: learn more about you? Your book, what you're up to?
Speaker 3: Yeah, go on my website. Easter Michael, I have a
Speaker 3: newsletter and it's got a big archive with a lot
Speaker 3: of stuff like how you can learn more about that
Speaker 3: scarcity loop I talk to, and how it applies to finances,
Speaker 3: how it applies to all these different things. So, yeah,
Speaker 3: check out my website. You can sign up for the
Speaker 3: newsletter there and get the archive, and yeah, that's probably
Speaker 3: the best place to find.
Speaker 1: Me right on Awesome.
Speaker 2: We'll link to all that stuff in our show notes
Speaker 2: as well. Michael, thanks for joining us, man.
Speaker 3: Yeah, thank you very much. It was great to talk nice.
Speaker 1: Sorry, man, what that was a great conversation. Do you
Speaker 1: think we've had any conversation that was any less about
Speaker 1: money than the conversation we just had with Michael?
Speaker 2: More about human behavior, But simultaneously, it just underpins how
Speaker 2: it is that we handle money, just like you know,
Speaker 2: the mindset and when it comes to developing positive, good
Speaker 2: habits that are going to lead us to be able
Speaker 2: to ultimately hopefully have more money on hand to kind
Speaker 2: of live the life that we want to live. But
Speaker 2: I thought about asking Michael at the very top, like
Speaker 2: if he knew how much people were able to put
Speaker 2: into a four oh one k or a roth Ira
Speaker 2: or something this year I assume he didn't because it
Speaker 2: was not his thing, you know, which is which it
Speaker 2: just to prove a point that, like we had Michael
Speaker 2: on for other reasons, he's like brilliant, vastly knowledgeable on
Speaker 2: all these other things that impact our money, yes, but
Speaker 2: indirectly right exactly.
Speaker 1: So yeah, what was your that being said? What was
Speaker 1: your big takeaway? Are you going to try to channel
Speaker 1: it in a personal finance direction? Okay?
Speaker 2: So or no, there's two different ways. I feel like
Speaker 2: I go here, but I'm gonna say this when he
Speaker 2: said everyone sucks at moderation, and I think he's right, Like,
Speaker 2: I think it's really really hard to be a moderate
Speaker 2: in this day and age. I mean, think about everything
Speaker 2: in our political landscape points to polarization hard left or
Speaker 2: hard right right, and or really if we're going to
Speaker 2: try to accomplish anything, it being sort of middle of
Speaker 2: the road seems like the craziest choice to make, but
Speaker 2: we think for the most ornamental most of the time,
Speaker 2: it's actually a good path to trot. And when it
Speaker 2: comes to what your goals are, well define your goals
Speaker 2: based on maybe more moderation, like do you want to
Speaker 2: get fit cool? Do you need or want to be
Speaker 2: oral Torchen atger level fit probably not like I certainly don't,
Speaker 2: But like, what are your money goals amassing millions and
Speaker 2: millions and millions? That might not be it either. You
Speaker 2: probably don't want to just like us, you don't want
Speaker 2: to be the next Elon Musk or Jeff Bezos for
Speaker 2: many reasons.
Speaker 1: But and that means, please, I know you want a
Speaker 1: rocket ship to.
Speaker 2: The point I do, but not having those extreme goals
Speaker 2: is actually, I think going to lead to a happier life.
Speaker 2: And sometimes when it comes to the consumption side of
Speaker 2: things too, figure out what does it look like to
Speaker 2: maybe indulge in some of these things, know that they exist,
Speaker 2: know that these mechanisms are pulling at me, but that
Speaker 2: I also don't have to.
Speaker 1: Go a whole hawk.
Speaker 2: I can be a moderate Amazon user, right, stuff like that,
Speaker 2: Like I can moderately use my phone without going overboard.
Speaker 2: It's about pulling back in the ways that we that
Speaker 2: makes sense for us, so that we can live a
Speaker 2: life that more fully reflects.
Speaker 1: Who we want to be. Dude, I couldn't agree more. Yeah,
Speaker 1: so my yeah, my big tech away kind of dovetails
Speaker 1: with that a little bit. But so he was talking
Speaker 1: about numbers and how they're relatively new, and how numbers
Speaker 1: in and of themselves are a gamification tactic or whatever
Speaker 1: it is that you're measuring, like, it doesn't matter what
Speaker 1: it is, whether you're measu how fast you can run grades.
Speaker 1: That's something that makes me think of a recent piece
Speaker 1: I was reading the Times recently about how set scores
Speaker 1: and college yeah, and just college success rates there or
Speaker 1: with here. On the show, what we talked about personal finance.
Speaker 1: Net worth? Man, what a number that is incredibly easy
Speaker 1: to put your finger on, and we like it because
Speaker 1: it's simple, it's straightforward, and it's easy to compare, to write,
Speaker 1: not only to yourself, but man, how easy is it
Speaker 1: to compare to others? Nothing, As I guess, you don't
Speaker 1: always know what somebody else's net worth, but the perceived
Speaker 1: net worth. And certainly when it comes to consumption, you know, oh,
Speaker 1: I don't know how much that truck costs. Truck costs
Speaker 1: as much, but that means their net worth went down exactly.
Speaker 1: So it's kind of contrary there. But when it comes
Speaker 1: to those who are seeking after specifically fire right like
Speaker 1: financial independence, retiring early, I think there can be an
Speaker 1: obsession with it because you're trying to hit your number,
Speaker 1: Like that's the term that those folks oftentimes will use.
Speaker 1: And yes, it's it's more efficient to figure out where
Speaker 1: you are on your journey. Yes it is easier, But man,
Speaker 1: are you missing out on so much of life that
Speaker 1: fits between in between this numbers that fits in between
Speaker 1: those monthly check ins to your net worth and figuring
Speaker 1: out sort of like what you said, what it is
Speaker 1: you want your life to look like is so important
Speaker 1: more than ever because we have so many resources at
Speaker 1: our disposal that we can choose to chase after. But
Speaker 1: are you chasing after the things that you want to
Speaker 1: chase after in this world, in this day and age,
Speaker 1: I think is a more important question than ever before.
Speaker 2: Well, and choosing not to decide is deciding to choose
Speaker 2: or whatever you know, you're choosing by default exactly somebody
Speaker 2: else is going to choose for you, and specifically it's
Speaker 2: going to be advertisers, it's going to be you know,
Speaker 2: the phone that's in your hand, It's going to be
Speaker 2: whoever's closest by you, Like those are going to be
Speaker 2: the things that impact you the most when it comes
Speaker 2: to what you end up actually doing as opposed to
Speaker 2: you proactively making that decision.
Speaker 1: So couldn't agree more men.
Speaker 2: Yeah, although slightly off topic from personal finance, like especially
Speaker 2: at the beginning of the year, given how great Michael's
Speaker 2: book is.
Speaker 1: Well, that's what's so great too about his book is
Speaker 1: like there aren't like three clear steps that you need
Speaker 1: to leave this conversation or leave even reading his book
Speaker 1: knowing that these are the three things that you need
Speaker 1: to address, And so we most definitely recommend for everyone
Speaker 1: out there to seriously read his book cover to cover
Speaker 1: because the examples that he gives it just sheds light
Speaker 1: on humanity essentially as opposed to I don't know what
Speaker 1: feels might feel more like a cheap takeaway, but it
Speaker 1: makes me want to recommend for folks to check out
Speaker 1: the How to Money Money Mission Statement, because that's what
Speaker 1: we're talking about here, is you asking yourself some of
Speaker 1: these larger questions. It's less the immediate tactics and strategies
Speaker 1: of how you're going to achieve those things, but from
Speaker 1: a very high level deciding for yourself which direction you
Speaker 1: want your life to be going in.
Speaker 2: Those two things actually would pair really well together. This
Speaker 2: book and the Money missions in it, and the money
Speaker 2: mission statements free will link to it in the show notes. Yeah,
Speaker 2: and by the way, Michael is just a great writer.
Speaker 2: So that's another reason. If you want to read a
Speaker 2: book and by someone so good, who's curious, and that
Speaker 2: comes across in every inch of the text, then this
Speaker 2: book is for you. All right, now, let's get back
Speaker 2: to the beer. This one is called Nelson Double IPA
Speaker 2: by Evergrain Brewing listener Rihanna. This is a last beer
Speaker 2: from her Big thanks to Rihanna for donating beers to
Speaker 2: the show. Matt Warrior thoughts on this beer.
Speaker 1: My thoughts are that, so this is a single hop
Speaker 1: series and it's called Nelson because it's Nelson Hops. And
Speaker 1: all I know now is that I love Nelson Hops because,
Speaker 1: oh my gosh, the flavor it's got, like all the
Speaker 1: hot flavors that I'm looking for one hot. Well, yes, yeah,
Speaker 1: it's phenomenal. Completely agree. It's so good. Not too sweet,
Speaker 1: not too earthy, not too piny, man, it's not too
Speaker 1: one note.
Speaker 2: Some of the other hops you're like, oh, clearly this
Speaker 2: is pine, Oh clearly this is citrusy, and this one
Speaker 2: has it runs the gamut with one hop but it
Speaker 2: really highlights the things I love about hops the most.
Speaker 2: So for Nelson, hops always stick out as a fave,
Speaker 2: and this beer does that hop justice.
Speaker 1: Yeah, I feel like I'm slowly expanding my and you
Speaker 1: would think, with you and me being such beer nerds
Speaker 1: that for a long time that we would we would
Speaker 1: have a better handle as to some of the different
Speaker 1: flavor character profiles of some of the different hops. But
Speaker 1: I feel like I can add another one to my
Speaker 1: mental checker, Nelson, they got it going on nice.
Speaker 2: Yeah, I love it all right. Well, that's going to
Speaker 2: do it for this episode, folks. Can't wait to see
Speaker 2: you back here on Friday for a Friday flight. And
Speaker 2: by the way, if you want links to some of
Speaker 2: the stuff we mentioned, including Michael's book and newsletter, you
Speaker 2: can find those up on our website at Howtimoney dot com.
Speaker 1: That's right, buddy. So that's gonna be it for this
Speaker 1: one until next time. Best Friends Out, Best Friends Out.