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Speaker 1: Pushkin. Hey everyone, this is justin Richmond. I'm really excited

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Speaker 1: to tell you that Pushkin's Against the Rules podcast is

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Speaker 1: back for its second season. Against the Rules is the

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Speaker 1: brainchild of Michael Lewis, the thought of a lot of

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Speaker 1: great books, but three of which turn into movies. I'm

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Speaker 1: sure you've seen Moneyball, The Big Short, and The blind Side.

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Speaker 1: Michael's an incredible storyteller, and his podcast is no different.

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Speaker 1: Against the Rules looks at fairness in every aspect of

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Speaker 1: American life, and this season, Michael returns with a very

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Speaker 1: special series on coaches. They used to be confined to

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Speaker 1: just sports, but I'm sure you've noticed now that coaches

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Speaker 1: are everywhere. Life coaches, death coaches, writing coaches, business coaches.

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Speaker 1: You can hire a coach to improve your executive skills,

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Speaker 1: your online dating performance, even your charisma. But coaching has

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Speaker 1: also become an odd source of unfairness. Just look around

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Speaker 1: and ask yourself who has access to these coaches and

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Speaker 1: who doesn't. Stay tuned to hear the first episode of

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Speaker 1: Against the Rules right here, and be sure to subscribe

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Speaker 1: to hear the rest of this great season. Welcome to

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Speaker 1: season two of Against the Rules. I'm Michael Lewis. Before

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Speaker 1: we get to where we're going, I want to go

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Speaker 1: back for a moment to where we've been a little

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Speaker 1: backstory from season one. The story involves a woman named

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Speaker 1: Katie Highland. She's in her late thirties, a public school teacher, wife,

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Speaker 1: mother of two small children. Her entire adult life, she'd

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Speaker 1: been made miserable by student loan she'd taken out when

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Speaker 1: she was eighteen years old. I don't see any payoff,

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Speaker 1: and it just keeps getting harder and harder, and that's

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Speaker 1: soul crushing her state of mind. Well, even her children

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Speaker 1: could see it wasn't good. It might be actually kind

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Speaker 1: of painful for her, because all of this counts with

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Speaker 1: a bell and getting something changed to another thing that's

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Speaker 1: the same, but changing to it. I love you, feel well,

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Speaker 1: it does feel kind of painful, right, mommy. Yeah, A

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Speaker 1: lot of the paper is yeah there, it's a lot

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Speaker 1: of paperwork. It's a lot of and a lot of

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Speaker 1: pain for doing it. This killed me to hear, but

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Speaker 1: especially this next part. It is very good to be

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Speaker 1: thoughtful for everybody. But the person who's the most best

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Speaker 1: person on earth is this lady right there, this lady

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Speaker 1: Jackson's mom Katie Highland shouldn't have owed anybody a dime.

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Speaker 1: That was the point of the story. Katie had qualified

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Speaker 1: years ago for a program that Congress created to forgive

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Speaker 1: the student loans of public servants, but her student loan

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Speaker 1: servicer made money offer only as long as she still

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Speaker 1: owed the money, and they had more or less tricked

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Speaker 1: her to keep her in debt. I like to try

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Speaker 1: to always find the good in people, and when you

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Speaker 1: have experiences like my experience, you get discouraged and you

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Speaker 1: start to think that people aren't as good as you

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Speaker 1: once thought they were. Sometimes you stumble onto a story

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Speaker 1: and you can't get it out of your head. Katie

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Speaker 1: Hyland had played by the rules, made all her loan payments,

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Speaker 1: thrown herself into being a good mother and a great teacher,

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Speaker 1: and she'd been abused by the company that was meant

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Speaker 1: to help her navigate her finances, and the Consumer Financial

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Speaker 1: Protection Bureau, the one financial referee that might have stepped

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Speaker 1: in to help her, was doing nothing to help. So

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Speaker 1: we decided to help on the website go fund me

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Speaker 1: to try to pay off Katie's student loans. When I

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Speaker 1: looked at the page, and I think I saw at

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Speaker 1: that time that it was like eleven thousand dollars. I

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Speaker 1: was completely blown away. I was at my son's baseball game.

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Speaker 1: I remember I showed my mom. We were like freaking

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Speaker 1: out about it and just reading people's responses and the

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Speaker 1: encouraging words, and like where people were from. There were

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Speaker 1: people from Ireland, there were people from England. We started

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Speaker 1: this campaign two months after the show originally aired, so

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Speaker 1: after most people had listened to it. Even then, it

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Speaker 1: took you, our listeners less than three months to pay

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Speaker 1: off fifty thousand dollars. And I think the last person

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Speaker 1: that donated donated like enough to like hit it, and

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Speaker 1: it was just so I was like, oh my god, Mom,

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Speaker 1: like it happened. We did it, and I can't even

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Speaker 1: tell it's because you said to me in one email,

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Speaker 1: like just pay it forward or just do it for

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Speaker 1: someone else. And every go fund meat campaign that I see,

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Speaker 1: I make it a point to do the same, even

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Speaker 1: if it's ten twenty whatever I can do. Now, don't

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Speaker 1: you dare go get into debt again. I thought that

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Speaker 1: would be the end of the story, but there was

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Speaker 1: a lot more to it. Of course, there was more

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Speaker 1: to it. I mean, Katie had told us that financial

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Speaker 1: stress had caused her to grind her teeth at night,

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Speaker 1: and she started losing her teeth. She used to smile

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Speaker 1: all the time. Now she avoided smiling, and along the way,

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Speaker 1: she'd picked up another debt problem. Already, I'm on a

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Speaker 1: payment plan with a dentist like five hundred dollars a week.

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Speaker 1: I've spent like thirty thousand dollars. I've lost a bunch

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Speaker 1: of teeth through the grinding and all of that. That

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Speaker 1: part has been really difficult. So I still have a lot,

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Speaker 1: you know, remaining with that. It's still a lot to

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Speaker 1: pay off, still a lot of dental work to get done.

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Speaker 1: So you do have credit card debt? Yeah, I have

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Speaker 1: credit card debt. Any big purchases that I've had to make,

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Speaker 1: I've put on credit cards. US. You're a very lucky

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Speaker 1: kind of American. You may recognize yourself here. You try

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Speaker 1: to do prudent things to save money, like drop the

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Speaker 1: vision coverage on your health insurance. Then suddenly your daughter

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Speaker 1: needs glasses. That was the kind of thing that Katie

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Speaker 1: and her husband did that wound up biting them. They

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Speaker 1: now have five credit cards between them, all charging high

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Speaker 1: interest rates. Even though their credit score is great. Personally,

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Speaker 1: I just want to not be scared to look at

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Speaker 1: my bank account. I don't think I've looked at my

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Speaker 1: bank account in years, to be honest. I just, yeah,

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Speaker 1: that's not a good I know that's not healthy, but

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Speaker 1: I don't know why. It's just like terrifies me. I'm

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Speaker 1: I'm not sure why. The credit card industry already had

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Speaker 1: her by the throat. She was ashamed of it, and

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Speaker 1: she had no sense that anyone would help this time. Well,

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Speaker 1: so here's my goal. My goal season one, the goal

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Speaker 1: was to get rid of your student debt. In season

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Speaker 1: two as they restore your smile. So that's what we're

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Speaker 1: going to try to do, all right, Okay, thanks Michael.

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Speaker 1: I'm Michael Lewis, and this is against the rules. Last

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Speaker 1: season was about referees, the attack on our societies. Refs

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Speaker 1: is obviously a big problem. This season is about coaches. Yeah,

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Speaker 1: what are you doing and their rise in American life.

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Speaker 1: You need to stop being a lazy piece of shit

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Speaker 1: and work for your picture or I'm going to kick

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Speaker 1: your ass. Got it. It wasn't that long ago the

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Speaker 1: coaches were confined to sports. Now they're everywhere. We're going

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Speaker 1: to refocus like we're training a puppy. If we're going

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Speaker 1: to train your mind like we train a puppy. They're

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Speaker 1: people who call themselves life coaches and other people who

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Speaker 1: call themselves death coaches. I am here to guide you

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Speaker 1: and making sure you grow as a person. Every big

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Speaker 1: time corporate boss has an executive coach, but now so

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Speaker 1: do new NBA is starting out at Wall Street banks

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Speaker 1: and consulting firms. These are super smart people who maybe

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Speaker 1: just haven't heard the right strategies. You can hire a

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Speaker 1: coach to improve your online dating performance or your charisma.

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Speaker 1: It's a saying which is therapy is a path of tears,

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Speaker 1: and coaching is the path of laughta and that's all great.

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Speaker 1: The coaching is also becoming an odd source of unfairness.

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Speaker 1: Just look around and ask yourself who gets good coaching

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Speaker 1: and who doesn't. That guy would never have gotten into Yale,

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Speaker 1: but this guy who got all this coaching did get

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Speaker 1: into Yale. It just seems like anyone who can answer

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Speaker 1: these questions has got to be coached. Oh my god,

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Speaker 1: we're lost. Fucking team. Money is a great place to

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Speaker 1: ask this question about coaching and fairness, But first you

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Speaker 1: have to stop thinking of finance as a business and

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Speaker 1: start thinking of it as a competitive sport. When eighteen

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Speaker 1: year old Katie Hid took out her student loans and

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Speaker 1: twenty something year old Katie started using credit cards, she

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Speaker 1: was basically walking into an arena alone with a target

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Speaker 1: on her back. The giant company should be facing off

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Speaker 1: against knew more about her game than she did. That's

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Speaker 1: how they made their money from her weaknesses. You can

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Speaker 1: always make more money exploiting people's irrationalities then you can

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Speaker 1: by fixing them. Richard Taylor, winner of the Nobel Prize

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Speaker 1: in Economics. He spent his career trying to understand the

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Speaker 1: ways that people don't act in their own self interest.

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Speaker 1: And one big thing his work suggests is that ordinary

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Speaker 1: people need coaching far more than they know. Let's think

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Speaker 1: about the people who get the most coaching. Well, professional

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Speaker 1: athletes would be one. Take Roger Federer. He's probably got

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Speaker 1: ten guys, coaches and physical trainers. So here Roger feder

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Speaker 1: one of the greatest athletes in the world, and he

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Speaker 1: has ten coaches. Who else? Actors Meryl Streep has a

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Speaker 1: director helping her act now God knows, Yeah, she doesn't

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Speaker 1: need it, right Brad Pitt, you know, does he really

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Speaker 1: need help? But the richest, best performing people in the

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Speaker 1: world have the most coaching. And who's coaching the uber

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Speaker 1: driver on what hours to drive and when you should

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Speaker 1: go to the airport? And if you get a ride

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Speaker 1: to the airport, should you wait in line or immediately leave?

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Speaker 1: So coaching just ends up making the rich richer. Yeah,

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Speaker 1: it's one of the many factors that contribute to this curve.

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Speaker 1: We've all seen about the one percent or the point

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Speaker 1: or one percent share of the economy. No one's coaching

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Speaker 1: the tens of millions of Americans on the wrong end

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Speaker 1: of consumer finance. No one even seems interested. I've tried,

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Speaker 1: unsuccessfully to get somebody to create what I call the

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Speaker 1: good bank. With this good bank look like, well, so

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Speaker 1: it would warn you when you're about to overdraw your

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Speaker 1: credit card, rather than wait until the end of the

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Speaker 1: day when you've swiped five times and they charge you

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Speaker 1: twenty five dollars penalty for each swipe, twenty five bucks

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Speaker 1: a swipe. It's supposed to scare you from overdrawing your account,

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Speaker 1: but you only get the warning after it's too late.

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Speaker 1: I mean, there's a reason for this it's a subtle

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Speaker 1: form of coaching that makes the banks a lot of money. No,

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Speaker 1: the problem is people pay bad coaches and not good coaches, right,

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Speaker 1: and they pay because they don't see the charge. Right.

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Speaker 1: Trip to bad coaching is never show the bill, Yeah, exactly.

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Speaker 1: The problem with good coaching is you have to show

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Speaker 1: the bill. It basically goes something like this, Right, So

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Speaker 1: at the start of the month, you're paid your paycheck.

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Speaker 1: This is angela strange venture capitalists and connoisseur of how

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Speaker 1: the financial sector exploits human nature. And so you send

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Speaker 1: your rent check out and you don't see in your

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Speaker 1: bank account that check is cleared, probably for a few days.

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Speaker 1: You pay a bunch of other bills. You know that

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Speaker 1: those are gonna hit as costs in your bank account,

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Speaker 1: but that also hasn't cleared. Now you're like, well, can

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Speaker 1: I pay this bill? I think so, But you're doing

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Speaker 1: some mental math around the checks that you have in

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Speaker 1: the air, like you just don't have a sense of

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Speaker 1: what is your real time cash position. And then, oh,

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Speaker 1: by the way, if you screw it up, it's a

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Speaker 1: thirty five dollars overdraft feech time, right, Like there were

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Speaker 1: thirty four billion dollars in overdraft fees paid last year,

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Speaker 1: again refitting from people screwing up. Its huge, it's huge,

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Speaker 1: it's huge. Wait wait, thirty four billion dollars in overdraft

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Speaker 1: fees yep is the typical penalty thirty five bucks. Yeah,

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Speaker 1: it's clem up. It used to be twenty five about

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Speaker 1: ten years ago. So that means that there are a

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Speaker 1: billion instances of this a year, yes, and they tend

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Speaker 1: to be concentrated where the people they get hit with

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Speaker 1: overdraft get hit a lot. Thirty four billion dollars in

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Speaker 1: overdraft fees is really just the start. There's more than

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Speaker 1: one hundred billion in credit card late payment fees and

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Speaker 1: interest charged each year. And then there's the entire credit

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Speaker 1: card industry, which thrives on the mistakes people make playing

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Speaker 1: the money game. There is now over one trillion dollars

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Speaker 1: of credit card debt in the US. People who have

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Speaker 1: this debt, it's fim about fifteen thousand dollars. They tend

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Speaker 1: to have it across three to four different cards. So

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Speaker 1: let's say you're like, Okay, I don't want to be

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Speaker 1: in credit card debt. I need to get out of

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Speaker 1: credit card debt. Just going through what is that process.

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Speaker 1: You have debt across three to four different cards, they

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Speaker 1: likely charge different rates, they have different due dates. So

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Speaker 1: do you pay off the highest rate card first? Oh,

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Speaker 1: by the way, like what is the highest rate card?

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Speaker 1: It's just a very complicated mess to get your way

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Speaker 1: out of. Angela wondered why no one had tried to

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Speaker 1: help people who had gotten into this mess. Why no

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Speaker 1: one had, say, tried to create a money coaching business,

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Speaker 1: the same way that Richard Thaylor wondered, why no one

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Speaker 1: had even tried to create a good bank. Then she

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Speaker 1: realized the sort of people with the ability to coach

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Speaker 1: other people about money, or to finance a company to

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Speaker 1: coach other people about money. Those people already had money.

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Speaker 1: People who didn't have money were like Martians to them.

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Speaker 1: Like your investment banker is not the person who grew

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Speaker 1: up on food stamps, right, And he's not the person

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Speaker 1: who's got five different credit cards maxed out and is

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Speaker 1: paying thirty percent interest rate to some bank. Another problem

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Speaker 1: Angela saw trust Americans had been screwed by consumer finance

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Speaker 1: for so long that they were likely to be wary

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Speaker 1: when some companies sprung up claiming it was actually going

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Speaker 1: to be on their side, like it takes time as

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Speaker 1: an athlete or as anything to build trust with your coach,

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Speaker 1: until they'll start by making these suggestions and you might

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Speaker 1: follow them, you might not follow them. And you know,

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Speaker 1: if they're a good coach and they know you really well,

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Speaker 1: then you'll notice that over time, as you take more

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Speaker 1: of their suggestions, you tend to perform better. The explosion

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Speaker 1: of coaching, it's related to the war on referees. It's

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Speaker 1: what happens when more and more of life feels like

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Speaker 1: a brutal competitive sport. The scarier it is to lose,

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Speaker 1: the more people scramble to find an edge. That's what

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Speaker 1: a coach offers, an edge. Angela Strange had noticed an absence,

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Speaker 1: just as Richard Taylor had noticed an absence of a

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Speaker 1: coach who really should exist in the middle of American

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Speaker 1: financial life. Both were waiting for whom or what they

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Speaker 1: did not know. In the Year of Our Lord nineteen

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Speaker 1: seventy nine, in the Mountains of Colorado, a woman gives

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Speaker 1: birth out of wedlock to a boy, Jason. She names him.

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Speaker 1: The mom's name is Christina Brown. She's a fundamentalist Christian

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Speaker 1: and takes the Bible as the literal truth. She doesn't

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Speaker 1: know how she's going to make ends meet, but she

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Speaker 1: knows what she wants for her child. She wants him

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Speaker 1: to be well educated. To make sure that happens, she'll

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Speaker 1: educate him herself. When we were studying the health unit,

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Speaker 1: I had Jason cleaned the floor on his hands and

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Speaker 1: knees with an extra fifty pound backpack on his back,

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Speaker 1: so that he would know what it would be like

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Speaker 1: to be overweight. That's Christina. She didn't want her son

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Speaker 1: to be taught what was taught in schools, the theory

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Speaker 1: of evolution, for instance, but mostly she just thought she

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Speaker 1: could teach him better than any school could. It was like, hey, Jason,

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Speaker 1: what do you want to learn? The world is your classroom.

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Speaker 1: You can go learn anything you want. That's Jason Brown,

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Speaker 1: all grown up now. And you know there's one time

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Speaker 1: in particular, I remember, She's like, what do you want

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Speaker 1: to learn? And I said, I want to learn about taxidermy,

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Speaker 1: and she said, okay, fine. She goes through the Yellow Pages.

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Speaker 1: This was in the time where he had Yellow Pages,

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Speaker 1: and she calls all the taxidermists and convinces that some

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Speaker 1: guy who owns a taxidermy shop to let us go

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Speaker 1: camp out in his workplace for a week, and we

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Speaker 1: would show up there and he would he would show

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00:17:42,036 --> 00:17:44,476
Speaker 1: us how he would take these animals and you end

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00:17:44,516 --> 00:17:46,716
Speaker 1: up stuffing them and turning them into things that could

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Speaker 1: go on people's walls. And what was really cool is

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Speaker 1: you know, I learned about biology. I learned about the

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Speaker 1: anatomy of animals. He taught us about the chemicals that

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00:17:54,796 --> 00:17:56,796
Speaker 1: were used. And then I would ask a lot of

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Speaker 1: questions about just the business of taxidermy, like how much

295
00:17:59,556 --> 00:18:01,356
Speaker 1: do you all these chemicals cost? How much do you

296
00:18:01,396 --> 00:18:02,756
Speaker 1: pay for this thing? What do you sell it for

297
00:18:03,356 --> 00:18:06,796
Speaker 1: the education of Jason Brown wasn't normal. It was kinetic.

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Speaker 1: Hands on his mother and uraged him to ask questions.

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Speaker 1: But at the same time, he lived in a very

300
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Speaker 1: small world. It was just her and him and his

301
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Speaker 1: little brother. Maybe because he was so dependent on his mom,

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00:18:21,956 --> 00:18:24,716
Speaker 1: he worried about her. Even as a little kid, he

303
00:18:24,756 --> 00:18:28,596
Speaker 1: could see that she was exposed and vulnerable, especially when

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Speaker 1: it came to money. My money was in envelopes, and

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00:18:33,236 --> 00:18:36,996
Speaker 1: each envelope had a different designation, and when the money

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00:18:37,076 --> 00:18:39,196
Speaker 1: was gone, it was gone. What would have been the

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00:18:39,276 --> 00:18:44,756
Speaker 1: envelopes designations okay. The first envelope was my tithe, then

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Speaker 1: it was rent, then it was groceries, miscellaneous electric gas,

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00:18:53,236 --> 00:18:58,476
Speaker 1: and you paid in that order. That's right. We literally,

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Speaker 1: and I'm not exaggerating, eight beans and rice. Pretty much

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Speaker 1: every day. I ground my own wheat, made my own

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Speaker 1: whole wheat, bread, made my own tortillas, made cereal in

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Speaker 1: the croc for breakfast, and we had peanut butter on toast.

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00:19:12,196 --> 00:19:16,436
Speaker 1: We ate very simply. We shopped at Goodwill, even for

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Speaker 1: a Christmas gift's birthday gifts. Sometimes Jason snuck a peek

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00:19:22,836 --> 00:19:25,396
Speaker 1: inside the money envelopes. A lot of the time they

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00:19:25,396 --> 00:19:28,196
Speaker 1: were totally empty. Yet, even when she had no money,

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Speaker 1: his mother insisted on staying home and teaching him and

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Speaker 1: his brother. By the time he was ten years old,

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Speaker 1: Jason was fully aware that his mother was running huge risks.

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Speaker 1: They were totally on their own. There was no safety net.

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Speaker 1: The most trivial events could disrupt their lives. So we

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Speaker 1: had this friend, his name was Donnie. He's a big kid,

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Speaker 1: and he came over to the house and spent the

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Speaker 1: weekend or something like that. And Donnie ate a lot,

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Speaker 1: and he really really liked milk too, and I remember

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Speaker 1: specifically in the kitchen and Donnie was just pounding the

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Speaker 1: milk and he finished the milk, and I remember looking

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Speaker 1: at my mom and she looked at me, and I

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00:20:07,756 --> 00:20:12,436
Speaker 1: could just see the dreaded fear on her face because

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Speaker 1: Donnie drank all the milk. Donnie drank an envelope. Yeah,

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00:20:15,756 --> 00:20:18,436
Speaker 1: he drank an envelope, And we just like because I

333
00:20:18,756 --> 00:20:22,316
Speaker 1: knew that the envelope for food was already used up.

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Speaker 1: And you know, I could see in her eyes like, hey,

335
00:20:25,316 --> 00:20:26,836
Speaker 1: what are we gonna do, Like we can't go on

336
00:20:26,956 --> 00:20:33,236
Speaker 1: buy more mild like that's it. So they went without milk.

337
00:20:33,916 --> 00:20:36,316
Speaker 1: Another memory is the day Jason's mom told him that

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00:20:36,316 --> 00:20:38,996
Speaker 1: she needed to take on a second job and it'd

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00:20:38,996 --> 00:20:41,636
Speaker 1: have to go to a real school. He was in

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00:20:41,676 --> 00:20:44,836
Speaker 1: the eighth grade. The real school was hellish. Other kids

341
00:20:44,876 --> 00:20:47,036
Speaker 1: made fun of him. One day, a kid just walked

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00:20:47,076 --> 00:20:48,556
Speaker 1: up to him and punched him in the face, and

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00:20:48,636 --> 00:20:52,396
Speaker 1: no one did anything about it. Jason felt totally loved

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00:20:52,436 --> 00:20:55,316
Speaker 1: by his mom, and he loved her back. She'd given

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00:20:55,396 --> 00:20:58,716
Speaker 1: him real strengths. He knew how to learn to teach himself,

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00:20:59,596 --> 00:21:02,996
Speaker 1: but she'd also left him with a fear of money,

347
00:21:04,036 --> 00:21:08,276
Speaker 1: of being one accident away from disaster. His mother couldn't

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00:21:08,316 --> 00:21:10,196
Speaker 1: afford for him to all off his bike and break

349
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Speaker 1: his wrist, much less pay for him to go to college.

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00:21:13,796 --> 00:21:17,196
Speaker 1: He went to the University of Colorado. Anyway. To pay

351
00:21:17,236 --> 00:21:20,556
Speaker 1: for it, he took out student loans, but the moment

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00:21:20,596 --> 00:21:24,156
Speaker 1: he did that, he felt exposed and vulnerable. Like his mom.

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Speaker 1: He was eighteen years old. I would drive home every

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00:21:29,716 --> 00:21:33,516
Speaker 1: single weekend starting in January, and I would go home

355
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Speaker 1: to my hometown where I grew up, and it was

356
00:21:35,876 --> 00:21:37,836
Speaker 1: about two to two and a half hour drive, and

357
00:21:37,876 --> 00:21:41,276
Speaker 1: I would spend the weekend knocking on doors, handing out flyers,

358
00:21:41,316 --> 00:21:43,276
Speaker 1: say hey, would you hire me to paint your house.

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00:21:43,596 --> 00:21:45,956
Speaker 1: Jason had never painted a house, but then there was

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Speaker 1: a time when he didn't know how to stuff an animal,

361
00:21:48,036 --> 00:21:50,156
Speaker 1: and he'd figured out how to do that. And there's just,

362
00:21:50,276 --> 00:21:52,316
Speaker 1: you know, there's six feet of snow outside, and this

363
00:21:52,476 --> 00:21:54,716
Speaker 1: kid is trying to convince you to paint his house.

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00:21:54,756 --> 00:21:57,556
Speaker 1: And they're like, number one, come back to me in

365
00:21:57,596 --> 00:21:59,836
Speaker 1: the summer. Number two, how many houses have you paint up? Like?

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00:21:59,876 --> 00:22:02,036
Speaker 1: I've never painted a house in my life, but I

367
00:22:02,116 --> 00:22:03,956
Speaker 1: promise I'm going to hire people who do know how

368
00:22:03,956 --> 00:22:06,676
Speaker 1: to paint their house. Maybe the oddest thing about Jason

369
00:22:06,756 --> 00:22:08,996
Speaker 1: Brown is he found nothing odd about any of this.

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00:22:09,716 --> 00:22:13,316
Speaker 1: An eighteen year old convincing grown ups in the snow

371
00:22:13,716 --> 00:22:16,676
Speaker 1: to trust him with their homes. So I brought snowshoes,

372
00:22:16,996 --> 00:22:18,276
Speaker 1: and I would have a pair for me and a

373
00:22:18,316 --> 00:22:20,116
Speaker 1: pair for them. And now I knew, as long as

374
00:22:20,116 --> 00:22:22,476
Speaker 1: I could convince the homeowner to put on their shoes

375
00:22:22,516 --> 00:22:24,716
Speaker 1: and coat and go around the house with me in snowshoes,

376
00:22:25,036 --> 00:22:26,556
Speaker 1: that they would then by the end of that have

377
00:22:26,596 --> 00:22:31,196
Speaker 1: a pretty good chance of hiring me. He was still

378
00:22:31,236 --> 00:22:33,676
Speaker 1: a kid, but pretty soon this wasn't a kid's business.

379
00:22:34,236 --> 00:22:36,916
Speaker 1: The crazy thing is, by the end of the summer,

380
00:22:37,156 --> 00:22:40,476
Speaker 1: I had painted something like forty or fifty homes, and

381
00:22:40,756 --> 00:22:43,516
Speaker 1: I had I think fifteen or twenty employees, And I

382
00:22:43,556 --> 00:22:47,636
Speaker 1: actually put fifty thousand dollars in my pocket for one summer. Really,

383
00:22:47,676 --> 00:22:50,596
Speaker 1: you cleared fifty one hundred and fifty thousand dollars a

384
00:22:50,596 --> 00:22:53,636
Speaker 1: total revenue, and it was fifty thousand dollars nut to me.

385
00:22:54,276 --> 00:22:57,436
Speaker 1: He wasn't done. After Jason's first year in college, he

386
00:22:57,516 --> 00:23:00,796
Speaker 1: set out to grow his business. Rural Colorado wasn't a

387
00:23:00,836 --> 00:23:03,996
Speaker 1: great market. There weren't that many houses. The weather was

388
00:23:03,996 --> 00:23:06,156
Speaker 1: hard on paint, but not as hard as it was

389
00:23:06,196 --> 00:23:08,956
Speaker 1: in other places. He decided to find a better market,

390
00:23:10,196 --> 00:23:13,636
Speaker 1: and so I transferred to Boston University. And by the

391
00:23:13,716 --> 00:23:18,156
Speaker 1: time wait, wait, you transferred to Boston University specifically to

392
00:23:18,236 --> 00:23:20,836
Speaker 1: pursue the business of painting houses, I did, yes, Because

393
00:23:20,836 --> 00:23:22,676
Speaker 1: you'd based so much money in painting houses. I didn't.

394
00:23:22,676 --> 00:23:23,876
Speaker 1: I was like, I was like, you weren't even in

395
00:23:23,876 --> 00:23:25,836
Speaker 1: the right place to paint house exactly. To pick your

396
00:23:25,876 --> 00:23:28,196
Speaker 1: school based on where there'd be the most houses to paint,

397
00:23:28,276 --> 00:23:32,076
Speaker 1: you got it exactly. At BU Jason ran his painting

398
00:23:32,116 --> 00:23:35,836
Speaker 1: business from his laptop at the back of classrooms, prepping

399
00:23:35,876 --> 00:23:37,876
Speaker 1: for the big season in the summer. When we were

400
00:23:37,876 --> 00:23:40,116
Speaker 1: painting all the houses, it was about four hundred employees,

401
00:23:40,476 --> 00:23:43,316
Speaker 1: and I think in the year that I sold the company,

402
00:23:43,356 --> 00:23:45,636
Speaker 1: we were doing about three million dollars a total revenue.

403
00:23:45,916 --> 00:23:47,916
Speaker 1: I don't remember the exact amount that I made from

404
00:23:47,916 --> 00:23:49,876
Speaker 1: all that. A couple questions one, are you at any

405
00:23:49,876 --> 00:23:53,156
Speaker 1: point are you conscious that you're being driven by having

406
00:23:53,196 --> 00:23:55,316
Speaker 1: grown up in an environment where money was so scarce?

407
00:23:55,676 --> 00:23:58,156
Speaker 1: I did so when I was I think I think

408
00:23:58,196 --> 00:24:02,116
Speaker 1: I was probably about ten, I really loved avocados, and

409
00:24:03,276 --> 00:24:05,236
Speaker 1: you know, money was so tight in our household. We'd

410
00:24:05,276 --> 00:24:06,996
Speaker 1: go to the grocery store. I'm like, Mom, can I

411
00:24:06,996 --> 00:24:09,596
Speaker 1: have avocados? She's like, I'm sorry, they're too expensive. Every

412
00:24:09,636 --> 00:24:11,156
Speaker 1: now and then we would get when it was a treat,

413
00:24:11,356 --> 00:24:15,236
Speaker 1: and I remember just savoring every bite of that buttery avocado,

414
00:24:15,636 --> 00:24:18,156
Speaker 1: and in my mind I committed. I said, I will

415
00:24:18,196 --> 00:24:21,036
Speaker 1: be rich enough one day to eat as many avocados

416
00:24:21,076 --> 00:24:23,756
Speaker 1: as I want. And still to this day, I eat

417
00:24:23,756 --> 00:24:26,996
Speaker 1: an avocado almost every single day, and not a single

418
00:24:27,036 --> 00:24:28,956
Speaker 1: time do I ever opened an avocado and not feel it.

419
00:24:29,076 --> 00:24:32,556
Speaker 1: Just immense gratitude for being able to afford as many avocados.

420
00:24:32,556 --> 00:24:35,156
Speaker 1: You even gotten used to avocado? I've not gotten tired

421
00:24:35,196 --> 00:24:38,076
Speaker 1: of them. No. Jason went to grad school in business

422
00:24:38,076 --> 00:24:41,836
Speaker 1: at the University of Chicago. Pretty soon he knew rich people,

423
00:24:42,356 --> 00:24:44,996
Speaker 1: but they didn't seem nearly as admirable or hard working

424
00:24:44,996 --> 00:24:47,716
Speaker 1: as his mother. He was coming to see money and

425
00:24:47,796 --> 00:24:52,276
Speaker 1: the problems around money as its own thing, as problems

426
00:24:52,276 --> 00:24:59,276
Speaker 1: some people just had. Jason Brown started more companies and

427
00:24:59,316 --> 00:25:02,076
Speaker 1: sold them. The companies all had one thing in common.

428
00:25:02,596 --> 00:25:04,596
Speaker 1: They made it easy for people to do things they

429
00:25:04,636 --> 00:25:07,436
Speaker 1: really should do. One of his companies made it easy

430
00:25:07,476 --> 00:25:10,476
Speaker 1: for people to get their home computers fix remotely geek

431
00:25:10,556 --> 00:25:14,156
Speaker 1: squad before geek Squad. Another made it easy for homeowners

432
00:25:14,196 --> 00:25:16,836
Speaker 1: to switch to solar power and cut their electricity bills

433
00:25:16,836 --> 00:25:21,276
Speaker 1: in half. Jason was all about making it easy. We

434
00:25:21,396 --> 00:25:24,676
Speaker 1: did not evolve to do multi period financial optimization right

435
00:25:24,836 --> 00:25:27,996
Speaker 1: as hairless apes. We did not have this expectation that

436
00:25:28,036 --> 00:25:30,996
Speaker 1: we're going to live eighty years and be part of

437
00:25:31,316 --> 00:25:34,796
Speaker 1: a global economy with all this complexity. One day he

438
00:25:34,836 --> 00:25:38,036
Speaker 1: was reading a book, You've All Harari Sapiens. It was

439
00:25:38,076 --> 00:25:41,556
Speaker 1: about how humans evolved and where the species might be heading.

440
00:25:42,076 --> 00:25:45,196
Speaker 1: Evolution was a new idea did Jason. He thought it

441
00:25:45,316 --> 00:25:50,076
Speaker 1: explained a lot almost out of corporate evolution. This entire industry,

442
00:25:50,076 --> 00:25:54,836
Speaker 1: the finance industry, has evolved to exploit every single cognitive

443
00:25:54,876 --> 00:25:57,196
Speaker 1: a bias, or every mistake that people make when they're

444
00:25:57,236 --> 00:25:59,596
Speaker 1: thinking about money. Exactly. Every little bug we have in

445
00:25:59,636 --> 00:26:02,236
Speaker 1: our brains that served us well when we were on

446
00:26:02,276 --> 00:26:06,436
Speaker 1: the savannah, but but now is not maybe directly translatable

447
00:26:06,436 --> 00:26:09,716
Speaker 1: to the kind of lives we live. And every product

448
00:26:09,716 --> 00:26:13,556
Speaker 1: they have, every contract they make, is designed to exploit

449
00:26:13,916 --> 00:26:15,916
Speaker 1: these bugs in our brains getting people to do things

450
00:26:15,956 --> 00:26:23,796
Speaker 1: they really shouldn't do. Yep. For Jason, money wasn't just money.

451
00:26:24,196 --> 00:26:26,436
Speaker 1: At some point he realized that every time he thought

452
00:26:26,436 --> 00:26:29,516
Speaker 1: about money, he also thought about his mom and her

453
00:26:29,516 --> 00:26:32,436
Speaker 1: three envelopes of cash for the month. I actually need

454
00:26:32,436 --> 00:26:34,196
Speaker 1: to tell you a little bit more about about my mom.

455
00:26:34,396 --> 00:26:38,716
Speaker 1: So my mom is, so she's my hero. And the

456
00:26:38,756 --> 00:26:41,756
Speaker 1: reason she's my hero is she grew up in a

457
00:26:41,796 --> 00:26:45,436
Speaker 1: pretty challenging childhood. I'm not a lot of resources, not

458
00:26:45,556 --> 00:26:48,356
Speaker 1: very supportive. She ended up having me when she was

459
00:26:48,396 --> 00:26:51,236
Speaker 1: twenty one or twenty two, just a high school graduate,

460
00:26:51,276 --> 00:26:55,276
Speaker 1: no higher education. She had overcome all that and given

461
00:26:55,356 --> 00:26:58,436
Speaker 1: him and his brother the most amazing education. She is

462
00:26:58,556 --> 00:27:00,676
Speaker 1: just the model of discipline. I mean, the woman. She's

463
00:27:00,716 --> 00:27:04,676
Speaker 1: a rob vegan and I'm so proud of that. That's

464
00:27:04,676 --> 00:27:07,756
Speaker 1: hard to be presumable. It is, it is. It is

465
00:27:07,836 --> 00:27:11,796
Speaker 1: very hard. And she's sixty two now sixty two, and

466
00:27:11,876 --> 00:27:13,796
Speaker 1: most of her life she'd had to figure out everything

467
00:27:13,836 --> 00:27:17,276
Speaker 1: on her own, including money. But let's say say if

468
00:27:17,276 --> 00:27:19,756
Speaker 1: she graduates high school and there's like an accountant and

469
00:27:19,836 --> 00:27:22,396
Speaker 1: a financial advisor, They're just like, we're going to do

470
00:27:22,396 --> 00:27:23,956
Speaker 1: all your if she had a coach coming out of

471
00:27:24,036 --> 00:27:25,596
Speaker 1: high school. If she had a coach coming out of

472
00:27:25,676 --> 00:27:28,356
Speaker 1: high school, I know she'd own a home right now, properly,

473
00:27:28,556 --> 00:27:31,116
Speaker 1: she'd have a nice little nest egg, a retirement. She

474
00:27:31,196 --> 00:27:33,596
Speaker 1: would be in a good spot. It definitely was possible.

475
00:27:33,756 --> 00:27:38,196
Speaker 1: But she didn't have that. Jason could take care of

476
00:27:38,236 --> 00:27:40,876
Speaker 1: his mom, and he did, But what about all the

477
00:27:40,876 --> 00:27:44,316
Speaker 1: other moms. He decided to create a company specifically to

478
00:27:44,356 --> 00:27:47,196
Speaker 1: help them. He looked hard at the entire money game

479
00:27:47,316 --> 00:27:50,676
Speaker 1: before he settled on consumer finance and especially credit cards.

480
00:27:51,316 --> 00:27:54,636
Speaker 1: Because if finance is a competitive sport, the credit card

481
00:27:54,716 --> 00:27:59,036
Speaker 1: companies are undefeated. They've smashed together a payment tool and

482
00:27:59,116 --> 00:28:01,876
Speaker 1: alone into one, and they've designed the payment tool to

483
00:28:02,076 --> 00:28:04,756
Speaker 1: again exploit all these bugs in our brain. So you

484
00:28:04,756 --> 00:28:07,516
Speaker 1: get points for spending, you get access to lounges, It

485
00:28:07,556 --> 00:28:09,756
Speaker 1: comes in different colors and medals. You can even get

486
00:28:09,756 --> 00:28:13,956
Speaker 1: your dog's picture printed on the card. Right. So they

487
00:28:14,116 --> 00:28:16,596
Speaker 1: create all of these things that make you want to

488
00:28:16,676 --> 00:28:18,476
Speaker 1: use it, Yeah, exactly, make you want to use it,

489
00:28:18,636 --> 00:28:20,796
Speaker 1: and make you when you go go get a credit card,

490
00:28:20,836 --> 00:28:23,276
Speaker 1: you're not thinking about, oh, I might end up getting

491
00:28:23,356 --> 00:28:25,636
Speaker 1: charged this interest down the road, you're thinking about, Oh,

492
00:28:25,676 --> 00:28:27,516
Speaker 1: I'm going to get these points and have access to

493
00:28:27,556 --> 00:28:30,596
Speaker 1: these hotels, whatever it is, and that allows banks to

494
00:28:30,636 --> 00:28:33,556
Speaker 1: substantially overcharge everybody on the interest rates. So it's they

495
00:28:33,676 --> 00:28:36,516
Speaker 1: just distract you from the cost of the interest rate exactly.

496
00:28:36,596 --> 00:28:39,316
Speaker 1: So there's no one out there competing by saying, get

497
00:28:39,356 --> 00:28:41,636
Speaker 1: our card and we'll give you a lower interest rate,

498
00:28:41,996 --> 00:28:47,556
Speaker 1: because it's not even in the conversation, which is insane

499
00:28:47,596 --> 00:28:49,596
Speaker 1: if you stop and think about it. I mean, our

500
00:28:49,636 --> 00:28:52,036
Speaker 1: government hardly pays any interest on most of it's dead,

501
00:28:52,756 --> 00:28:56,516
Speaker 1: really risky companies can borrow at seven percent. To think

502
00:28:56,556 --> 00:28:59,556
Speaker 1: that millions of people are paying nineteen to thirty percent

503
00:28:59,636 --> 00:29:03,116
Speaker 1: interest on anything. Who other than the American credit card

504
00:29:03,116 --> 00:29:06,396
Speaker 1: borrow or pays so much and that's not even counting

505
00:29:06,396 --> 00:29:09,436
Speaker 1: the billions in late fees. Once Jason Holmes on this

506
00:29:09,476 --> 00:29:13,596
Speaker 1: particular racket, he noticed other things like the monthly statements

507
00:29:13,636 --> 00:29:17,236
Speaker 1: these lenders send to people who owe the money. If

508
00:29:17,276 --> 00:29:18,956
Speaker 1: you look at a credit card statement, the thing with

509
00:29:18,996 --> 00:29:22,236
Speaker 1: the biggest font, it's like size eighty ninety font is

510
00:29:22,276 --> 00:29:25,396
Speaker 1: your minimum payment. They're using something called the anchoring effect,

511
00:29:25,556 --> 00:29:27,676
Speaker 1: which show you a low number and gets you to

512
00:29:27,756 --> 00:29:30,556
Speaker 1: pay relatively low amounts to the card, which means that

513
00:29:30,636 --> 00:29:32,516
Speaker 1: you have more debt and they charge you more money. Right,

514
00:29:32,516 --> 00:29:34,436
Speaker 1: they're trying to encourage you to go into yes, so

515
00:29:34,476 --> 00:29:37,836
Speaker 1: they're encouraging you to spend and encouraging you like bad coaching.

516
00:29:37,916 --> 00:29:40,876
Speaker 1: It is bad coaching. Right. The more Jason Brown looked

517
00:29:40,876 --> 00:29:43,356
Speaker 1: into the credit card industry, the more he thought he

518
00:29:43,436 --> 00:29:45,276
Speaker 1: might be able to get people out from under it

519
00:29:45,516 --> 00:29:48,476
Speaker 1: with an app. Do you think financial behaviors can be changed?

520
00:29:49,156 --> 00:29:52,356
Speaker 1: One hundred percent? Believe financial behaviors can be changed. Jason

521
00:29:52,396 --> 00:29:56,156
Speaker 1: created yet another company and called it Tally. He got

522
00:29:56,156 --> 00:29:58,676
Speaker 1: the investor Angela Strange to give him money and to

523
00:29:58,756 --> 00:30:02,916
Speaker 1: join his board. The ideas behind Tally could be traced

524
00:30:02,956 --> 00:30:04,996
Speaker 1: to a class that he had snuck into at the

525
00:30:05,036 --> 00:30:08,756
Speaker 1: Booth School of Business in Chicago, taught by Richard Taylor.

526
00:30:09,476 --> 00:30:12,276
Speaker 1: The biggest idea was it was very hard to change

527
00:30:12,316 --> 00:30:15,636
Speaker 1: people's behavior unless you make it easy for people to change,

528
00:30:16,196 --> 00:30:18,916
Speaker 1: make it feel to them like no more than a nudge.

529
00:30:20,116 --> 00:30:25,036
Speaker 1: We viewed nudges as an alternative to coaching. That's Richard

530
00:30:25,036 --> 00:30:28,316
Speaker 1: Taylor again. You know, we could try to teach people

531
00:30:28,516 --> 00:30:31,876
Speaker 1: to sign up for the four own K plan. Where

532
00:30:31,916 --> 00:30:34,796
Speaker 1: there's a company match and turning it down is free

533
00:30:34,796 --> 00:30:39,636
Speaker 1: money and stupid, right, Or we could just automatically enroll them, right,

534
00:30:40,276 --> 00:30:44,756
Speaker 1: and we knew the ladder works really well and the

535
00:30:44,836 --> 00:30:49,516
Speaker 1: former is like pulling teeth right. So so part of

536
00:30:49,636 --> 00:30:52,356
Speaker 1: nudging is a response to a sense of the limits

537
00:30:52,396 --> 00:30:57,236
Speaker 1: of coaching. Yeah, that's the point, right. If you really thought, well,

538
00:30:57,276 --> 00:30:59,756
Speaker 1: we can coach all these people up and how not

539
00:30:59,796 --> 00:31:02,796
Speaker 1: to get exploited by credit card companies, you would coach

540
00:31:02,876 --> 00:31:06,036
Speaker 1: them up. The best thing is to make things automatic,

541
00:31:06,476 --> 00:31:10,156
Speaker 1: making good behaviors easy. Yeah. The basis of Jason Brown's

542
00:31:10,156 --> 00:31:12,916
Speaker 1: businesses that class he took from you. It's creating a

543
00:31:13,116 --> 00:31:16,916
Speaker 1: decision environment where the way that people naturally, with least

544
00:31:16,916 --> 00:31:19,276
Speaker 1: friction and least amount of effort go is in their

545
00:31:19,316 --> 00:31:22,596
Speaker 1: interests rather than against their interests. So he picked that up.

546
00:31:22,796 --> 00:31:25,316
Speaker 1: It's a good lesson to have learned. Taylor has not

547
00:31:25,356 --> 00:31:27,876
Speaker 1: the first memory of Jason Brown in his class, but

548
00:31:27,996 --> 00:31:30,556
Speaker 1: Jason got the gist as Taylor's message. He hired a

549
00:31:30,556 --> 00:31:32,796
Speaker 1: bunch of engineers to spend three and a half years

550
00:31:32,836 --> 00:31:35,996
Speaker 1: building the company software so that it nudged people with

551
00:31:36,076 --> 00:31:38,636
Speaker 1: credit card debt in ways that were good for them.

552
00:31:39,356 --> 00:31:41,516
Speaker 1: So if I have four different credit cards from four

553
00:31:41,516 --> 00:31:46,716
Speaker 1: different banks on my visas, I do whatever I do,

554
00:31:47,596 --> 00:31:51,556
Speaker 1: but but you pay them all yeah, and I pay

555
00:31:51,636 --> 00:31:54,076
Speaker 1: you yeah, So you tell me what I exactly, So

556
00:31:54,156 --> 00:31:56,676
Speaker 1: you download the app for free, you pass a soft

557
00:31:56,676 --> 00:31:59,196
Speaker 1: credit check, and then we're saying, hey, Michael, we're going

558
00:31:59,276 --> 00:32:00,956
Speaker 1: to pay all these cards when they due at the

559
00:32:00,956 --> 00:32:03,156
Speaker 1: exact right time, the exact right So, so a couple

560
00:32:03,156 --> 00:32:05,436
Speaker 1: of questions that naturally popped in mind. You're going to

561
00:32:05,556 --> 00:32:07,516
Speaker 1: charge me a much lower interest rate than the credit

562
00:32:07,556 --> 00:32:11,036
Speaker 1: card companies? How and you afford to do that if

563
00:32:11,076 --> 00:32:15,316
Speaker 1: they were charging me the actual correct rate given the

564
00:32:15,396 --> 00:32:18,756
Speaker 1: risk I present, Yeah to them. Well here's the rub. So,

565
00:32:18,996 --> 00:32:22,996
Speaker 1: coming back to this financial industry that's designed to make

566
00:32:23,036 --> 00:32:27,196
Speaker 1: money off of us, credit card interest rates are astronomically high,

567
00:32:27,276 --> 00:32:29,516
Speaker 1: and they do not represent the rate that you should

568
00:32:29,556 --> 00:32:31,796
Speaker 1: be paying. You'd save a bunch of money just by

569
00:32:31,836 --> 00:32:34,436
Speaker 1: not paying the high interest rate. Of course, you could

570
00:32:34,516 --> 00:32:36,956
Speaker 1: ruin yourself all over again by going out and buying

571
00:32:36,956 --> 00:32:39,996
Speaker 1: stuff you shouldn't. But Jason's hoping that he's nudged you

572
00:32:40,076 --> 00:32:42,796
Speaker 1: into a different state of mind, a state of mind

573
00:32:43,116 --> 00:32:45,996
Speaker 1: in which you would make wiser decisions about money. And

574
00:32:46,036 --> 00:32:49,396
Speaker 1: what we've seen is that when people invest more in

575
00:32:49,756 --> 00:32:52,596
Speaker 1: their debt, they actually just tend to spend less. And mentally,

576
00:32:52,636 --> 00:32:54,276
Speaker 1: it kind of makes sense because you know, if you

577
00:32:54,316 --> 00:32:57,076
Speaker 1: go out and let's say that you eat out for lunch,

578
00:32:57,316 --> 00:32:58,876
Speaker 1: somebody be like, well, maybe I don't want to eat

579
00:32:58,876 --> 00:33:00,676
Speaker 1: out for dinner because I already are you spent some money.

580
00:33:00,836 --> 00:33:02,716
Speaker 1: So the effect is I feel like I kind of

581
00:33:02,756 --> 00:33:05,956
Speaker 1: spent money on my debt, and now maybe I don't

582
00:33:06,036 --> 00:33:07,796
Speaker 1: want to go out for lunch. Maybe I don't want

583
00:33:07,796 --> 00:33:10,356
Speaker 1: to go out for dinner. Instead of giving people points

584
00:33:10,356 --> 00:33:13,596
Speaker 1: for spending, tally gives them points for saving. Instead of

585
00:33:13,676 --> 00:33:16,156
Speaker 1: encouraging them to pay off the minimum, they helped them

586
00:33:16,156 --> 00:33:18,756
Speaker 1: to figure out how to pay the maximum. Instead of

587
00:33:18,756 --> 00:33:21,716
Speaker 1: trying to keep people acting on impulse, it tries to

588
00:33:21,716 --> 00:33:25,556
Speaker 1: get them to think. Twice the company took off, but

589
00:33:25,756 --> 00:33:29,596
Speaker 1: something was bothering Jason. He thought a company needed both

590
00:33:29,596 --> 00:33:32,596
Speaker 1: a vision and a mission. A vision was where you

591
00:33:32,636 --> 00:33:36,156
Speaker 1: were going, a mission was why you were going there.

592
00:33:39,996 --> 00:33:43,796
Speaker 1: Jason wanted to understand the deeper emotional consequences of debt,

593
00:33:44,156 --> 00:33:47,396
Speaker 1: and initially my thought was that most of the emotions

594
00:33:47,436 --> 00:33:50,236
Speaker 1: would be around regret, like, hey, I spent this money

595
00:33:50,236 --> 00:33:52,556
Speaker 1: in the past, and I regret having bought that right

596
00:33:52,596 --> 00:33:55,876
Speaker 1: and regret from the sadness family, So it's the sense

597
00:33:55,916 --> 00:33:58,596
Speaker 1: of loss of something in the past. He hired a

598
00:33:58,596 --> 00:34:01,636
Speaker 1: team of researchers to test this idea. They came back

599
00:34:01,676 --> 00:34:06,316
Speaker 1: and told Jason that no, this wasn't about sadness. The

600
00:34:06,356 --> 00:34:08,796
Speaker 1: emotions that were coming out were anxiety, which is a

601
00:34:08,836 --> 00:34:11,396
Speaker 1: fear emotion, and it's the feeling that there's a threat

602
00:34:11,476 --> 00:34:13,596
Speaker 1: in the future that you don't have the capacity to

603
00:34:13,996 --> 00:34:18,596
Speaker 1: handle or protect yourself. Jason paid for another study, one

604
00:34:18,636 --> 00:34:21,076
Speaker 1: that tried to measure the stress levels of people with

605
00:34:21,156 --> 00:34:23,676
Speaker 1: credit card debt. We had found that two thirds of

606
00:34:23,756 --> 00:34:27,716
Speaker 1: individuals with card debt have medical levels of anxiety, So

607
00:34:27,836 --> 00:34:30,316
Speaker 1: meaning you're in a doctor's office waiting for some important

608
00:34:30,316 --> 00:34:33,396
Speaker 1: test results, the same kind of anxiety that people feel there.

609
00:34:33,596 --> 00:34:35,756
Speaker 1: That's what people are feeling on a regular basis with

610
00:34:35,796 --> 00:34:39,596
Speaker 1: their cards. Millions of Americans are sick from this stress,

611
00:34:39,916 --> 00:34:43,796
Speaker 1: and their illness has all kinds of other effects. Oftentimes

612
00:34:43,836 --> 00:34:48,476
Speaker 1: it's described as a weight on chest, drowning, not being

613
00:34:48,516 --> 00:34:52,636
Speaker 1: able to breathe. So a lot of people experience stress

614
00:34:52,796 --> 00:34:57,196
Speaker 1: is actual constriction within the body, and sensations of tightness

615
00:34:57,196 --> 00:35:00,596
Speaker 1: are acid in the stomach. Grinding of teeth is really

616
00:35:00,636 --> 00:35:04,716
Speaker 1: a common thing because it manifests oftentimes while people are sleeping.

617
00:35:05,356 --> 00:35:08,636
Speaker 1: At some point, Jason realized that stress wasn't just a

618
00:35:08,676 --> 00:35:12,316
Speaker 1: bug the American financial system. It was a feature. There's

619
00:35:12,396 --> 00:35:16,556
Speaker 1: a lot of research that suggests that it also affects cognition.

620
00:35:16,836 --> 00:35:19,476
Speaker 1: So if you're like a sinister credit card company and

621
00:35:19,636 --> 00:35:24,196
Speaker 1: you're trying to keep people trapped in a dark financial world,

622
00:35:24,636 --> 00:35:26,716
Speaker 1: the first thing you would do is stress them out.

623
00:35:27,196 --> 00:35:30,436
Speaker 1: By definition, the way the credit card statements are made,

624
00:35:30,556 --> 00:35:34,436
Speaker 1: especially by store cards, those cards that are associated with retailers.

625
00:35:34,716 --> 00:35:37,076
Speaker 1: The banks behind those are some of the best, and

626
00:35:37,196 --> 00:35:39,076
Speaker 1: even they do things like make it so that even

627
00:35:39,076 --> 00:35:40,836
Speaker 1: if you had wanted to set up an auto pay,

628
00:35:41,076 --> 00:35:44,156
Speaker 1: it's actually not a function that is available because they're

629
00:35:44,196 --> 00:35:47,036
Speaker 1: hoping that people will have late fees and forget about

630
00:35:47,036 --> 00:35:52,876
Speaker 1: balances and things like that. It took Jason three and

631
00:35:52,916 --> 00:35:55,196
Speaker 1: a half years to create his app. It took him

632
00:35:55,236 --> 00:35:57,956
Speaker 1: two minutes to create his first logo. It's a woman

633
00:35:58,596 --> 00:36:01,196
Speaker 1: reclining in a chair, her feet up on a table

634
00:36:01,596 --> 00:36:03,836
Speaker 1: and a cup of coffee in her hand, a woman

635
00:36:03,916 --> 00:36:07,596
Speaker 1: like his mom, but freed from anxiety with the help

636
00:36:07,596 --> 00:36:09,156
Speaker 1: of a coach. So, if we were to use a

637
00:36:09,276 --> 00:36:12,796
Speaker 1: sport analogy, the coaches arranged for food and meals to

638
00:36:12,796 --> 00:36:14,636
Speaker 1: be delivered, so you get to eat the right thing.

639
00:36:14,876 --> 00:36:17,356
Speaker 1: They've set up the gym membership for you. They've made

640
00:36:17,356 --> 00:36:19,676
Speaker 1: it so that not only are you being led for

641
00:36:19,796 --> 00:36:22,316
Speaker 1: how you can get the outcome you want, but also

642
00:36:22,596 --> 00:36:25,756
Speaker 1: all the sources of interference, as much as possible, are

643
00:36:25,796 --> 00:36:29,276
Speaker 1: being removed. Ninety nine percent of the people who sign

644
00:36:29,396 --> 00:36:32,436
Speaker 1: up to use Jason's app have stayed with it, and

645
00:36:32,516 --> 00:36:34,836
Speaker 1: it's kind of incredible what happens to people when they're

646
00:36:34,836 --> 00:36:38,156
Speaker 1: rewarded for behaving well instead of badly. They could say, oh,

647
00:36:38,276 --> 00:36:40,516
Speaker 1: you know, I'd rather buy the coffee than have it

648
00:36:40,556 --> 00:36:43,156
Speaker 1: and be set aside. But ninety percent of people are

649
00:36:43,196 --> 00:36:45,316
Speaker 1: still letting us set money aside for them. And I

650
00:36:45,356 --> 00:36:47,076
Speaker 1: think it has very much to do with the fact

651
00:36:47,116 --> 00:36:49,796
Speaker 1: that every time it happens you get points. People would

652
00:36:49,836 --> 00:36:51,876
Speaker 1: do the smart thing for themselves if you made it

653
00:36:51,916 --> 00:36:54,236
Speaker 1: easy for them to do the smart thing for themselves.

654
00:36:54,916 --> 00:36:57,796
Speaker 1: Make it easy, and people would create a buffer for themselves,

655
00:36:58,236 --> 00:37:02,516
Speaker 1: a margin of safety, a thing Jason's mom had never had,

656
00:37:03,156 --> 00:37:05,116
Speaker 1: and then it kept him awake when he was a kid.

657
00:37:05,676 --> 00:37:08,516
Speaker 1: Jason had not set out to become a coach, but

658
00:37:08,556 --> 00:37:11,716
Speaker 1: he saw a coach is exactly what he'd become. The

659
00:37:11,716 --> 00:37:14,236
Speaker 1: definition of a good coach is one who makes their

660
00:37:14,236 --> 00:37:17,116
Speaker 1: players feel like they don't need the coach, okay, And

661
00:37:17,156 --> 00:37:19,676
Speaker 1: the way I think you do that is, first you

662
00:37:19,796 --> 00:37:23,476
Speaker 1: take out all the hard work and all the distractions. Second,

663
00:37:23,556 --> 00:37:26,436
Speaker 1: you make it easy to have good behaviors, and third

664
00:37:26,516 --> 00:37:31,316
Speaker 1: is you make people want to have good behaviors. And

665
00:37:31,476 --> 00:37:33,716
Speaker 1: that's the thing about coaching that makes it so hard

666
00:37:33,716 --> 00:37:37,716
Speaker 1: to pin down. The best coaches don't leave you needing them.

667
00:37:37,916 --> 00:37:41,476
Speaker 1: You start with some fear or sense of inadequacy, they

668
00:37:41,556 --> 00:37:45,036
Speaker 1: help you get past it, then they recede. And in

669
00:37:45,076 --> 00:37:47,396
Speaker 1: the future, every single one of us is going to

670
00:37:47,476 --> 00:37:51,156
Speaker 1: have this hyper smart service that's doing all these complex

671
00:37:51,196 --> 00:37:53,436
Speaker 1: things in the background and nudging us and making us

672
00:37:53,476 --> 00:37:57,196
Speaker 1: feel really good about eating our financial broccoli, so to speak.

673
00:37:57,316 --> 00:37:58,836
Speaker 1: And we're going to feel great about it, but we're

674
00:37:58,876 --> 00:38:00,916
Speaker 1: not even going to see it. It's an invisible coach,

675
00:38:01,276 --> 00:38:04,636
Speaker 1: a coach that could maybe even help stop people from

676
00:38:04,676 --> 00:38:18,196
Speaker 1: grinding their teeth at night. To be honest, I think

677
00:38:18,196 --> 00:38:19,756
Speaker 1: I said this to you on the phone. I have

678
00:38:19,836 --> 00:38:22,716
Speaker 1: no idea what's in my bank account. Last October we

679
00:38:22,796 --> 00:38:26,236
Speaker 1: introduced Katie Highland to Jason's company Tally. She decided she

680
00:38:26,396 --> 00:38:28,996
Speaker 1: needed a coach, but her husband had to sign her

681
00:38:29,036 --> 00:38:30,996
Speaker 1: up because he was the only one with the nerve

682
00:38:31,076 --> 00:38:33,636
Speaker 1: to look at their bank account. I make Stephen chuck it,

683
00:38:34,076 --> 00:38:36,316
Speaker 1: and I ask him whether I'm good or not, and

684
00:38:36,396 --> 00:38:39,036
Speaker 1: he says yes, And sometimes I believe him and sometimes

685
00:38:39,036 --> 00:38:41,956
Speaker 1: I don't. But as long as I don't get a

686
00:38:41,956 --> 00:38:44,276
Speaker 1: phone call from the landlord that the rent didn't go through,

687
00:38:44,356 --> 00:38:49,316
Speaker 1: then I know that we're okay. So it scares the

688
00:38:49,436 --> 00:38:53,076
Speaker 1: bid Jesus out of me to know what's in there,

689
00:38:53,116 --> 00:38:56,316
Speaker 1: because I don't think like we don't spend frivolously like

690
00:38:56,356 --> 00:38:59,036
Speaker 1: we even where it said like dining out. I put

691
00:38:59,076 --> 00:39:02,716
Speaker 1: an a like work meals, and like we don't do

692
00:39:02,756 --> 00:39:06,236
Speaker 1: those things. You can hear the anxiety in her voice, right,

693
00:39:06,596 --> 00:39:11,116
Speaker 1: But that could change. I'm betting it will change, because

694
00:39:11,156 --> 00:39:23,356
Speaker 1: a good coach can change a lot. We gave Katie

695
00:39:23,396 --> 00:39:26,836
Speaker 1: Hyland some time before we bother her again, all right,

696
00:39:26,956 --> 00:39:29,516
Speaker 1: So I don't know how many months ago we spoke.

697
00:39:29,556 --> 00:39:32,236
Speaker 1: There was a few months anyway, But since then, like

698
00:39:32,396 --> 00:39:36,396
Speaker 1: we set you up with Tally and just the idea

699
00:39:36,476 --> 00:39:40,596
Speaker 1: of a financial coach. So with Talie, they've been amazing.

700
00:39:41,276 --> 00:39:43,796
Speaker 1: How long was it before we introduced the two of

701
00:39:43,836 --> 00:39:46,636
Speaker 1: you before you said, actually, this is a good thing.

702
00:39:46,876 --> 00:39:49,636
Speaker 1: This isn't just humoring Michael in his podcast, This is

703
00:39:49,676 --> 00:39:53,156
Speaker 1: actually a good thing. No, immediately immediately, I think, you know,

704
00:39:53,196 --> 00:39:55,956
Speaker 1: it was definitely overwhelming at first to sort of, you know,

705
00:39:56,076 --> 00:39:59,436
Speaker 1: gather all of those documents and find out what my

706
00:39:59,476 --> 00:40:02,996
Speaker 1: interest rates were and you know, figure out what things

707
00:40:03,036 --> 00:40:05,236
Speaker 1: I was paying every month and sort of get them

708
00:40:05,276 --> 00:40:08,316
Speaker 1: together in one central location. That was a bit overwhelming.

709
00:40:08,396 --> 00:40:11,676
Speaker 1: But I I mean they walked me and talked me

710
00:40:11,716 --> 00:40:15,916
Speaker 1: through absolutely every step of the way and made sure

711
00:40:15,996 --> 00:40:18,996
Speaker 1: that I understood what was going on. I can remember

712
00:40:18,996 --> 00:40:21,236
Speaker 1: you telling me that your view before was you didn't

713
00:40:21,236 --> 00:40:23,556
Speaker 1: even want to look at your bank accounts. I knew

714
00:40:23,556 --> 00:40:25,156
Speaker 1: you were going to bring that up, and I have

715
00:40:25,316 --> 00:40:28,196
Speaker 1: to tell you, Michael, I looked at my bank account

716
00:40:28,196 --> 00:40:31,596
Speaker 1: for the first time about two days ago, full on

717
00:40:31,756 --> 00:40:34,396
Speaker 1: the computer screen in front of me and all its glory.

718
00:40:34,516 --> 00:40:36,956
Speaker 1: I saw my balance and you know it wasn't as

719
00:40:36,956 --> 00:40:38,956
Speaker 1: bad as I envisioned. It wasn't as good as I

720
00:40:39,316 --> 00:40:41,636
Speaker 1: wished it would be, but it was an important step

721
00:40:41,876 --> 00:40:45,596
Speaker 1: in handling my finances. Is like actually having a realistic

722
00:40:45,596 --> 00:40:47,436
Speaker 1: picture of what's in there. No, it's sort of like

723
00:40:47,476 --> 00:40:48,956
Speaker 1: if you're going to get in shape, you need to

724
00:40:48,996 --> 00:40:51,756
Speaker 1: have a scale to weigh your cell phone. Yeah, it's

725
00:40:51,756 --> 00:40:54,796
Speaker 1: going to help just having the conversations, like having a

726
00:40:54,836 --> 00:40:58,116
Speaker 1: set time as a couple for myself and my husband

727
00:40:58,196 --> 00:41:01,076
Speaker 1: to sit down and say, Okay, where are we with finances?

728
00:41:01,076 --> 00:41:03,916
Speaker 1: What did we spend this month, what unexpected things came up?

729
00:41:04,356 --> 00:41:06,196
Speaker 1: You know, how are we looking for next month? And

730
00:41:06,316 --> 00:41:10,276
Speaker 1: what are we putting toward our our goals. It's going

731
00:41:10,356 --> 00:41:14,036
Speaker 1: to help just not our just not even like, you know,

732
00:41:14,236 --> 00:41:16,276
Speaker 1: reach our goals, but it's going to help our relationship

733
00:41:16,676 --> 00:41:20,316
Speaker 1: my husband and I because money is a definite source

734
00:41:20,316 --> 00:41:22,996
Speaker 1: of stress. I mean, is there a couple where that's

735
00:41:22,996 --> 00:41:31,756
Speaker 1: not true? Noah, there's no need here to recount how

736
00:41:31,796 --> 00:41:35,196
Speaker 1: many thousands of dollars she saved herself by having herself coached,

737
00:41:35,596 --> 00:41:37,956
Speaker 1: or how she's now paying six percent instead of twenty

738
00:41:37,956 --> 00:41:40,676
Speaker 1: six percent on her credit card debts, or how she

739
00:41:40,756 --> 00:41:43,356
Speaker 1: and her husband expect to be entirely debt free inside

740
00:41:43,356 --> 00:41:46,556
Speaker 1: of a year. But let's just consider the broader effects

741
00:41:46,596 --> 00:41:49,476
Speaker 1: this coach has had, this person who's on her side

742
00:41:50,116 --> 00:41:54,916
Speaker 1: encouraging her best self. Has it changed the kind of

743
00:41:54,996 --> 00:41:57,076
Speaker 1: tone of the conversation around money when you're in your

744
00:41:57,116 --> 00:41:59,356
Speaker 1: husband sit down and talk about it. Yeah, it was

745
00:41:59,396 --> 00:42:03,556
Speaker 1: all very emotionally charged before, and now you know he's

746
00:42:03,636 --> 00:42:06,156
Speaker 1: really taken to Okay, I'm laying everything out on a

747
00:42:06,196 --> 00:42:07,956
Speaker 1: spreadsheet and I you know, I put in all this,

748
00:42:08,036 --> 00:42:09,596
Speaker 1: and I did all this, and come look and let

749
00:42:09,636 --> 00:42:13,356
Speaker 1: me show you. So we're much more of a team

750
00:42:13,356 --> 00:42:15,316
Speaker 1: and much more on the same page. And I think

751
00:42:15,396 --> 00:42:19,636
Speaker 1: we're excited about the next couple of years. You can

752
00:42:19,676 --> 00:42:22,756
Speaker 1: hear it, too, right, The sound of a voice has changed.

753
00:42:23,796 --> 00:42:26,156
Speaker 1: All the other times I'd spoken with her, I could

754
00:42:26,156 --> 00:42:29,436
Speaker 1: almost hear her teeth grinding. I could hear her stress

755
00:42:29,796 --> 00:42:32,036
Speaker 1: and the way it was killing the pleasure she naturally

756
00:42:32,076 --> 00:42:36,156
Speaker 1: took in life. I didn't hear that anymore. I found

757
00:42:36,276 --> 00:42:40,196
Speaker 1: Katie Hyland in quarantine in New Rochelle, New York, at

758
00:42:40,236 --> 00:42:42,476
Speaker 1: the early center of what was shaping up to be

759
00:42:42,516 --> 00:42:47,716
Speaker 1: the greatest calamity in modern American history, but she sounded

760
00:42:47,756 --> 00:42:52,036
Speaker 1: almost hopeful. You know. It's funny is that you are

761
00:42:52,076 --> 00:42:56,476
Speaker 1: now sitting at one of the hot spots of the

762
00:42:56,556 --> 00:43:01,276
Speaker 1: American pandemic and you sound so much happier than you

763
00:43:01,356 --> 00:43:05,156
Speaker 1: did a year ago. I know, the irony and everything is.

764
00:43:05,236 --> 00:43:08,236
Speaker 1: You sound happy. Well, I feel confident, you know, I

765
00:43:08,276 --> 00:43:10,796
Speaker 1: feel like wow, like I can really start to do

766
00:43:10,996 --> 00:43:13,556
Speaker 1: things and I can really to think that. You know,

767
00:43:13,636 --> 00:43:15,836
Speaker 1: we set a goal of trying to buy a house

768
00:43:15,916 --> 00:43:20,156
Speaker 1: by the summer of twenty twenty three, and that's amazing.

769
00:43:27,156 --> 00:43:30,916
Speaker 1: I'm Michael Lewis. Thanks for listening to Against the Rules.

770
00:43:31,556 --> 00:43:34,356
Speaker 1: Against the Rules is brought to you by Pushkin Industries.

771
00:43:34,796 --> 00:43:38,516
Speaker 1: The show's produced by Audrey Dilling and Katherine Girodo, with

772
00:43:38,636 --> 00:43:42,996
Speaker 1: research assistance from Lydia, Jane Cott and Zooe Wynn. Our

773
00:43:43,156 --> 00:43:47,316
Speaker 1: editor is Julia Barton. Mia o'bell is our executive producer.

774
00:43:47,836 --> 00:43:51,436
Speaker 1: Our theme was composed by Nick Brittell, with additional scoring

775
00:43:51,516 --> 00:43:55,476
Speaker 1: by Stellwagon Sinphanette. We got fact checked by Beth Johnson.

776
00:43:55,956 --> 00:43:58,756
Speaker 1: Our show was recorded by tofur Ruth and Trey Schultz

777
00:43:59,116 --> 00:44:03,356
Speaker 1: at Northgate Studios in Berkeley and James Ward at Live

778
00:44:03,436 --> 00:44:09,676
Speaker 1: Oak Studio. As always, thanks to Pushkin's founders, Jacob Weisberg

779
00:44:09,916 --> 00:44:21,636
Speaker 1: and Malcolm Gladwell. How often do you go on to

780
00:44:21,716 --> 00:44:24,076
Speaker 1: go fund me and give money to strangers? My wife

781
00:44:24,076 --> 00:44:25,676
Speaker 1: and I were just driving down the road and it

782
00:44:25,756 --> 00:44:28,196
Speaker 1: just seemed like the right thing to do. But I

783
00:44:28,196 --> 00:44:31,236
Speaker 1: don't typically go in to go fund me and donate

784
00:44:31,276 --> 00:44:34,036
Speaker 1: to strangers. I think it's more when something speaks to

785
00:44:34,076 --> 00:44:36,716
Speaker 1: me and it's something that you can easily cover, you

786
00:44:36,756 --> 00:44:38,596
Speaker 1: just go ahead and do it. It's always how I've

787
00:44:38,636 --> 00:44:41,716
Speaker 1: been taught. This is a meet Kakar, the guy who

788
00:44:41,756 --> 00:44:44,116
Speaker 1: made the last donation to the fund that paid off

789
00:44:44,196 --> 00:44:46,836
Speaker 1: Katie Highland student loans. He turns out to be a

790
00:44:46,916 --> 00:44:49,876
Speaker 1: real estate agent in suburban DC. Makes me wish I

791
00:44:49,876 --> 00:44:52,236
Speaker 1: wanted to buy a house. So who's the idea? Was

792
00:44:52,276 --> 00:44:54,396
Speaker 1: it yours or your wife's to go and find the

793
00:44:54,436 --> 00:44:57,036
Speaker 1: go fund me page and finish off the campaign? It

794
00:44:57,116 --> 00:45:00,756
Speaker 1: was me, but she obviously is used to me doing

795
00:45:00,796 --> 00:45:03,476
Speaker 1: stuff like that and kind of co signs it. But

796
00:45:03,556 --> 00:45:05,556
Speaker 1: you know, I almost as soon it was over and

797
00:45:05,916 --> 00:45:08,116
Speaker 1: I heard about the go fund me, I was intrigued

798
00:45:08,196 --> 00:45:10,316
Speaker 1: to see where it was at, and when I saw

799
00:45:10,356 --> 00:45:13,556
Speaker 1: the level um, it was a no brainer. To finish

800
00:45:13,556 --> 00:45:13,876
Speaker 1: it off