Speaker 1: Welcome to Had of Money. I'm Joel and I'm Matt,
Speaker 1: and today we're talking about how to overcome your idiot brain.
Speaker 2: Hey, we've all done some dumb things. Joel, Actually, so
Speaker 2: what's the is there something that you do on a
Speaker 2: recurring basis that is kind of an idiot thing or
Speaker 2: a dumb thing? Or ask my wife? You have two options.
Speaker 2: What's the one of the dumbest things you've ever done,
Speaker 2: or what's something that you do more regularly that you're like,
Speaker 2: why do I do that?
Speaker 1: That's not gonna minute, that's probably Matt.
Speaker 2: Well, we'll make sure to hit those topics when we
Speaker 2: have our Wives episodes later this summer. If I said,
Speaker 2: I thought about this because I was gonna ask you
Speaker 2: this question. But I think one of the dumbest things
Speaker 2: I ever did was I a jeep when I was
Speaker 2: in high school, and I thought that meant oh that
Speaker 2: means I can drive through mud of any depth and.
Speaker 1: Pipe worked like that.
Speaker 2: Well, I I was such an idiot, Like I drove,
Speaker 2: we went not we It was just me that there's
Speaker 2: one mistake I wasn't. I didn't have a buddy there,
Speaker 2: you know, who had my back. But I went to
Speaker 2: this field that I had never been to before, and
Speaker 2: it brained a whole lot, and there's a bunch of
Speaker 2: big puddles, or so I thought. And so I'm like,
Speaker 2: why driving around mud splashing everywhere. I'm just like living
Speaker 2: the life until the nose of the jeep just like
Speaker 2: dives down and it was this massive hole and I
Speaker 2: couldn't get out, and we had a call like a
Speaker 2: tow truck to winch me out of there. There is Yeah,
Speaker 2: it was a mess. That was most likely the dumbest
Speaker 2: thing I've ever done in my life.
Speaker 1: I mean, that's not the worst thing about A lot
Speaker 1: of people have done a lot of dumber things.
Speaker 2: It ruined the transmission, okay, like like mud and liquid
Speaker 2: water got into the transmission and the transmission had to
Speaker 2: be That was a costly misfan.
Speaker 1: That's no fun. Well, we're gonna talk about all sorts
Speaker 1: of things today on this episode. Ways, especially specifically that
Speaker 1: our brain works largely because of the thousands and millions
Speaker 1: of years of evolution, right, and and how it doesn't
Speaker 1: really work to our advantage in the modern modern day society.
Speaker 1: That's true, ways that we're conspiring against ourselves. And then
Speaker 1: how to overcome them.
Speaker 2: Yeah, and there's certain things and more in our more
Speaker 2: recent history and in our own personal lives that has
Speaker 2: an impact on how it is that we handle our money,
Speaker 2: and you didn't reciprocate. I was hoping you would have
Speaker 2: a good dumb story, but you keep thinking about it.
Speaker 2: Folks can hang on for at the end of the episode. Uh,
Speaker 2: maybe you'll not tell you So my girls they love
Speaker 2: to hear this one. You tell us one story. When
Speaker 2: I was in college in South Carolina, it didn't really
Speaker 2: snow very often, but one time it snowed, and what
Speaker 2: idiot college dudes think to do when that happens. Well,
Speaker 2: we wanted to go skiing, but there's no place to
Speaker 2: ski in Greenville, South Carolina, naturally, So what we did
Speaker 2: was we put on the skis, we threw an electrical cable,
Speaker 2: slammed it in the trunck on Mytota camera, and we
Speaker 2: went skiing on the icy roads.
Speaker 1: And nobody got terribly injured. But there's a minor injury
Speaker 1: at least. That's just like one dumb thing that I
Speaker 1: remember doing.
Speaker 2: See that just sounds like fun because it was, like
Speaker 2: you said, nothing bad happened, So that was just a
Speaker 2: good time.
Speaker 1: It's not been like a dislocated shoulder or something like that.
Speaker 2: But that's about it. Stuff like that all the time,
Speaker 2: Like okay, maybe we'll say this one for yeah, I
Speaker 2: don't want to go down this path of dumb stuff
Speaker 2: that we did that was actually fun, not considered dumb
Speaker 2: because it didn't come with it come at a high cost.
Speaker 2: But actually, speaking of college, a quick little story to
Speaker 2: share with folks, Amazon is actually no longer in the
Speaker 2: college textbook rental business.
Speaker 1: My wife found this out the hard way. So we've
Speaker 1: talked about this before, how that's a massive way to
Speaker 1: save when it comes to the tech instead of buying
Speaker 1: brand new or even buying used and then returning into
Speaker 1: the school bookstore renting it instead. And if you're.
Speaker 2: Talking about I mean hundreds and even thousands of dollars
Speaker 2: when it comes to the amount that these college textbooks
Speaker 2: cost for sure.
Speaker 1: And so my wife, she's in grad school and she's
Speaker 1: been using Amazon Textbooks, checking it against the prices other
Speaker 1: places too, But Amazon Textbooks, I guess they found out
Speaker 1: we're pricing these things too low and we're not making
Speaker 1: any money, so they shut her down. And so now
Speaker 1: if you want to rent a textbook to save money,
Speaker 1: which I think is still a good way to go,
Speaker 1: still good route to choose, get a tactic. Yeah, book Scouter,
Speaker 1: e Campus, and cheg are the three websites you should
Speaker 1: be checking out. We'll link to those in the show notes.
Speaker 2: But those are I think book scouter in particular, it's
Speaker 2: like a marketplace, like it aggregates a bunch of different
Speaker 2: additional websites and you can compare prices easily on there,
Speaker 2: which is huge, huge.
Speaker 1: And I hate to see one less competitor, especially one
Speaker 1: as big as Amazon in the space. But yeah, if
Speaker 1: you were like my wife and you were bummed and
Speaker 1: you're like, I don't know where to go now, we'll
Speaker 1: check out one of these sites, because yep, yeah, you
Speaker 1: still it's better to rent than to buy.
Speaker 2: And so I bet there's probably still a lot of
Speaker 2: folks out there who have Amazon books that they had rented,
Speaker 2: and you actually have I think it's until sometime this fall,
Speaker 2: like August or September, in order to return those those books.
Speaker 1: We just returned hers for the last sulster. You don't
Speaker 1: get to keep them. We were shopping for the next
Speaker 1: semester and we were like, oh, bummer, but we found
Speaker 1: we went to cheg for some of hers and save
Speaker 1: some money. But if he had just word otherwise, if
Speaker 1: you're in school or you know someone who's in school
Speaker 1: and they're like, these books are expensive, this is definitely
Speaker 1: one way to save money. Absolutely.
Speaker 2: All right, man, are you ready for this beer?
Speaker 1: I'm ready, We're born ready.
Speaker 2: It's time to tap some of the beers that I
Speaker 2: grabbed recently from Asheville, North Carolina. But this is End
Speaker 2: of Plagues and this is a beer by Burial Brewing Company.
Speaker 2: We will enjoy this one during this episode and share
Speaker 2: our thoughts at the end of the episode.
Speaker 1: Burial always so chill in their naming conventions. Not all right,
Speaker 1: let's move on, Matt. Let's say, let's get to the
Speaker 1: topic we want to discuss on this episode, which is
Speaker 1: overcoming your idiot brain, and specifically, how are brains process
Speaker 1: information that make us bad with money? And we've all
Speaker 1: seen the meme of the guy on the bike who
Speaker 1: puts a stick in his own wheel and he falls off.
Speaker 1: That's kind of becoming ubiquitous at this point. There are
Speaker 1: literally hundreds of different memes based on this goofy poorly
Speaker 1: drawn comic and for instance, Matt I saw one. The
Speaker 1: first line says, fifteen holes a good go, and then
Speaker 1: it says, my brain realizing I'm playing well as he
Speaker 1: puts the stick in the front wheel, and then what happens.
Speaker 1: He's lying on the ground writhing in pain. It's amazing.
Speaker 1: That just reveals a deeper truth whenever you attach something
Speaker 1: to this meme.
Speaker 2: Yeah, one of my favorite. It makes me think of,
Speaker 2: Like the first one's like, I'm tired at work, falling
Speaker 2: asleep at my desk, drinks a big old cup of
Speaker 2: afternoon coffee as he sticks the stick in the spokes
Speaker 2: and can't sleep that night. Is the end result, which
Speaker 2: I feel like is something we've all done.
Speaker 1: Yeah, for sure. And the truth is it's not really
Speaker 1: all that hard for any of us to become our
Speaker 1: own worst enemy on the money front, right, and that, yeah,
Speaker 1: good intentions just aren't going to get the job done.
Speaker 1: So today we want to talk about some of the
Speaker 1: common ways we're inspiring against ourselves, and we want to
Speaker 1: offer an antidote or multiple antidotes to help us make
Speaker 1: the progress we're looking to achieve more possible, more of
Speaker 1: a reality.
Speaker 2: Yeah, Like that's what makes these memes so hilarious and
Speaker 2: poignant at the exact same time. Right is that because
Speaker 2: like we know the truth, like we know what it
Speaker 2: is that we should be doing, but then we go
Speaker 2: we basically do the exact opposite. Right, We have all
Speaker 2: been there and it's impacted all areas of our lives
Speaker 2: as well. I think like anyone ever sabotage relationship? Have
Speaker 2: you ever sabotaged a job interview? Almost like subconsciously though, right, Yeah,
Speaker 2: Like even without realizing. I think sometimes we only become
Speaker 2: aware of it, like what we have done after the
Speaker 2: fact in hindsight, like.
Speaker 1: Oh wait, that's how I That's how I ruined that thing.
Speaker 2: Yeah, Like, I mean honestly, like that's what it's what
Speaker 2: it means to be human. Like we get to just
Speaker 2: revel in the complexity and the incomprehensibility of being human beings.
Speaker 2: But as Carl Jung said, until you make the unconscious conscious,
Speaker 2: it will direct your life and you will call it fate.
Speaker 2: And yeah, yeah, when we leave these underground, subterranean thoughts
Speaker 2: and beliefs unexamined, untapped, we're going to be prone to
Speaker 2: make the same mistakes just on repeat throughout our lives.
Speaker 2: It's honestly, it's truly amazing that humanity has even come
Speaker 2: this far, given our tendencies to self sabotage. Luckily, great
Speaker 2: philosophers and thinkers like Carl Jung who have paused, and
Speaker 2: they cause us to think a little bit and so
Speaker 2: maybe spend some time digging below the service a little bit.
Speaker 2: And and honestly, even today, I think just the emotional
Speaker 2: or like mental health has risen in prominence. And I
Speaker 2: think that's a good thing because I think that has
Speaker 2: allowed a lot of folks to maybe think a little
Speaker 2: bit more about why it is that they're doing the
Speaker 2: things that they're doing.
Speaker 1: So they can hopefully avoid sticking the stick in the
Speaker 1: wheel again exactly basically styming their own progress and hurting
Speaker 1: their inability to do the things that they really do
Speaker 1: want to achieve in favor of often kind of some
Speaker 1: sort of short term reward. And I do think that
Speaker 1: thinking and feeling affect the way we handle our money
Speaker 1: so much more than we give it credit for, and
Speaker 1: even more so than the immutable characteristics that we possess,
Speaker 1: like our personal history and our personality. Tendencies are likely
Speaker 1: to play a bigger role in how we react to
Speaker 1: spending and investing than even our age or our education level.
Speaker 2: Yees about their skills and how good you are, right, yeah,
Speaker 2: it's it's really about your history and kind of different
Speaker 2: things probably that formed early in life.
Speaker 1: I mean, we're going to sound like a psychotherapist here,
Speaker 1: like you're laying down on a couch and we're you know,
Speaker 1: picking your brain or something like that. But that's it
Speaker 1: really is true that a lot of kind of how
Speaker 1: we have come to view and think about money has
Speaker 1: been tainted, has been informed by those early years. And
Speaker 1: so it doesn't matter how good you are at math,
Speaker 1: that's not a prerequisite for handling money well. Either. It's
Speaker 1: really difficult to remove ourselves from our day to day
Speaker 1: way of living in order to understand and come to
Speaker 1: grips with the groundwork that we've laid already that's been
Speaker 1: laid over, you know, especially those first formative years, which
Speaker 1: informs how we're making decisions in the present that impact
Speaker 1: our lives on an ongoing basis. I mean, it doesn't
Speaker 1: help that everyone out there is basically trying to sell
Speaker 1: you something, you know, like attention. It's the most important
Speaker 1: commodity that we have in this day and age. And
Speaker 1: every company out there is they're doing their absolutely best
Speaker 1: to hijack our attention for their profit.
Speaker 2: We think about we recently talked about the TV and like,
Speaker 2: you're having your attention, you're having your literally your eyeball
Speaker 2: is hijacked in order to get something for free, free TV.
Speaker 1: And you say, and then you know it comes at
Speaker 1: a high cost.
Speaker 2: That well, initially it seems like it's a low cost
Speaker 2: in that case, right, like the free TV, but.
Speaker 1: They ultimately except for no money.
Speaker 2: Yeah, ultimately what this means are more dollars flowing out
Speaker 2: of your life because of it. In social media is
Speaker 2: a great example as well, but a plethora of streaming
Speaker 2: options like that's an entirely additional front.
Speaker 1: I feel like that we have to fight.
Speaker 2: Right Like there are still like more good TV shows
Speaker 2: out there than any sane human being could possibly watch.
Speaker 1: There's a lot of bad ones out there too.
Speaker 2: But a lot even just goofy little games like candy
Speaker 2: Crush on our phones, Like these are all distractions that
Speaker 2: are pulling at us. And the more that we give
Speaker 2: into these distractions, the less productive and the more unhappy
Speaker 2: that we're going to become. And we say it like,
Speaker 2: no judgment here right by the way, we fall prey
Speaker 2: to these same distractions, these same things that are constantly
Speaker 2: viol for our attention. And so maybe a part of
Speaker 2: why we're covering this topic, like we're doing this for
Speaker 2: ourselves sure, as well.
Speaker 1: As for you. Yeah no, I mean I think ye
Speaker 1: that the goal of this is where you and I
Speaker 1: are always trying to be lifelong learners too. We don't
Speaker 1: want to just point fingers at anybody who uses candy
Speaker 1: crush and call them crazy or anything like that. I
Speaker 1: try to avoid games, video games, any sort of games
Speaker 1: on my phone, but I realized that they bring some
Speaker 1: people a lot of joy, and in fact, they help
Speaker 1: your voter skills and coordination to some degree too. So
Speaker 1: I'm not saying there's no visit at all. Yeah, yeah,
Speaker 1: but we're talking just.
Speaker 2: A double edged sword though, you know, like like that's
Speaker 2: the thing with tech in particular, Like like when we
Speaker 2: were talking about counseling earlier. It also makes me think
Speaker 2: of like the rise in like headspace, Like there are
Speaker 2: some different apps out there that cause people to slow
Speaker 2: down and to pause and reflect. But it's a double
Speaker 2: edged sword because like five hundred years ago, like back
Speaker 2: in the day. I'm guessing there was probably less issues
Speaker 2: when it came to mental health. I don't know if
Speaker 2: that's proven. That's just this is that's just my assumption.
Speaker 2: They probably didn't need some of these apps because today
Speaker 2: environment like the way things are today, our again, our
Speaker 2: attention is just hijacked constantly, instead of having downtime where
Speaker 2: we might naturally reflect on things, where we might naturally
Speaker 2: have a conversation with the loved one and do some
Speaker 2: of the things that matter more. Instead, yeah, we're just
Speaker 2: scrolling social media, and so we have to be more purchases,
Speaker 2: more proactive.
Speaker 1: Basically because of the nature of the society society we
Speaker 1: live in, and because of the things that are the
Speaker 1: flaming arrows that are aimed our way, we need some
Speaker 1: sort of like shield to fin them off so that
Speaker 1: we can protect ourselves and seth godin he writes about
Speaker 1: defeating the lizard brain, and that's kind of like what
Speaker 1: we're talking about here in this episode. You know, the
Speaker 1: basic part of our psyche that only cares about the
Speaker 1: most fundamental aspects of life, like surviving, eating, and procreating,
Speaker 1: which are all good, necessary things. I like all the above,
Speaker 1: you know, but that lizard brain can also cause us
Speaker 1: to function with the survivalist short term mentality. And Matt,
Speaker 1: I remember hearing Tim Urban say this. He said, the
Speaker 1: world we were programmed to be in and didn't have
Speaker 1: long term projects that often. So so basically the reality
Speaker 1: that our ancestors grew up in long term wasn't really
Speaker 1: a thing, Like nobody was investing for retirement. Like our
Speaker 1: brains haven't kept up with the new reality of much
Speaker 1: longer life spans and four one k's and all the
Speaker 1: stuff that come along with those things. Three baby, right,
Speaker 1: And so it's just no surprise that our brains have
Speaker 1: had trouble keeping up with this new reality, albeit a
Speaker 1: very fortunate reality, right. I mean, I personally like electricity,
Speaker 1: indoor plumbing. I'm not mad about any of the progress
Speaker 1: that we've made, but it comes with, like I said,
Speaker 1: double edged short, it comes with the downside and somethings
Speaker 1: with something we need to pay attention to if we
Speaker 1: want to live a fulfilling life and one that also
Speaker 1: comes along with financial security at the same time.
Speaker 2: Yeah, yeah, there's no part of me that wants to
Speaker 2: go back five hundred years ago. There are a lot
Speaker 2: of things that we don't have to worry about There
Speaker 2: are a lot of diseases that would not so much progress. Yeah, exactly,
Speaker 2: Like I'm very, very happy to be living in the
Speaker 2: air that works.
Speaker 1: I mean, even even if you're in the bottom twentieth
Speaker 1: percentile of Americans, you're living better than French kings did
Speaker 1: three hundred years ago, which is I mean, just pretty
Speaker 1: amazing to think about.
Speaker 2: Like had some perks they.
Speaker 1: Okay.
Speaker 2: So one of the problems I think we face that
Speaker 2: stems from what Seth Goudin calls the lizard brain, is
Speaker 2: that we all have a tendency to overvalue the present.
Speaker 2: This is called present bias. There's a study from twenty
Speaker 2: nineteen and they found that present biased consumers are more
Speaker 2: likely to spend in the present and less likely to.
Speaker 1: Save for the future.
Speaker 2: And obviously this makes sense given where we've come from ancestrally,
Speaker 2: like our brains they just haven't adapted to this long
Speaker 2: term thinking that's required as lifespans have increased and just
Speaker 2: our need to build up assets for you know, like
Speaker 2: potentially multiple decades. That's the reality now that we live
Speaker 2: in Like this is the.
Speaker 1: Exact opposite of what used to happen when our ancestors
Speaker 1: would come across food like they didn't. Now we have
Speaker 1: as much food as we want at our fingertips to
Speaker 1: a certain area. Right, you can walk into a gross
Speaker 1: story get whatever you want. Before it was like you
Speaker 1: come upon food, you almost have to hoard it. Yeah,
Speaker 1: you almost have to eat.
Speaker 2: You can arrise that honey, like that's some good stuff.
Speaker 2: But now everything is sweet, and we still crave sugar.
Speaker 1: That's right. But unlike our ancestors, we can get them
Speaker 1: whenever we want it, and so we don't have to
Speaker 1: and they're quite refined, but we still like to eat
Speaker 1: them the way ancestors did. And so when we have
Speaker 1: it like we want to consume it. Yeah.
Speaker 2: Yeah, because this present bias is something that we're continually
Speaker 2: rubbing up against. We just have a hard time mustering
Speaker 2: this self control, even though we know that we don't need,
Speaker 2: for instance, those additional calories via that sugar. We lack
Speaker 2: this self control that's needed when it comes to your finances,
Speaker 2: curb spending and to set more aside for your future.
Speaker 2: But the good news is that there are some tools
Speaker 2: at our disposal in order to help us, you know,
Speaker 2: within this quest on our as we're on our path
Speaker 2: to financial independence. So we'll discuss some other psychological hurdles
Speaker 2: that we face and how to overcome them right after this.
Speaker 1: All right, Matt, let's keep going. We're getting psychological with
Speaker 1: this one. It's true our brains conspire against us and
Speaker 1: they cause us to do things that aren't in our
Speaker 1: best interest.
Speaker 2: And overcoming the ancestral lizard brain.
Speaker 1: Yeah, I mean, I think back to middle school and
Speaker 1: uh it just or even even high school. I was
Speaker 1: babb with the ladies and I remember trying, like I
Speaker 1: wanted to ask somebody out on a date or something
Speaker 1: like that. I was so nervous that that person was
Speaker 1: going to say no. And it took me a while
Speaker 1: to come to grips with the fact that what if
Speaker 1: they do say, Now, what's the worst thing that happens,
Speaker 1: Like you feel bad for a second. What if they
Speaker 1: say yes, you have this awesome chance to hang out
Speaker 1: with this person that you would really like to spend
Speaker 1: some time with.
Speaker 2: So, coming back to Joel's base desire, exactly.
Speaker 1: Well, these are the kind of things that, like we
Speaker 1: we have a hard time rationalize. It took me a
Speaker 1: long time to come to that conclusion, to realize that
Speaker 1: the stakes were actually a lot lower than I thought.
Speaker 2: That you weren't in literal life harm because like, that's
Speaker 2: what it feels like. It's exactly when it's when faced
Speaker 2: with either confrontation, at least when you're sixteen, Yeah, something
Speaker 2: like that. It feels that like, literally, I'm going to die, like,
Speaker 2: which is why that's a phrase that you hear teenagers say,
Speaker 2: because I think a lot of time, like haven't oftentimes
Speaker 2: like identified that, No, you're not literally gonna die, even
Speaker 2: though I totally get that that's what it feels like. Yeah,
Speaker 2: that's what we're oftentimes trying to overcome. But like we
Speaker 2: were just talking about present bias, you know, just before
Speaker 2: the break, and how we fail to think ahead, how
Speaker 2: we fail to prepare for the future by investing our money.
Speaker 2: And I think that one of the reasons that so
Speaker 2: many folks don't have enough in retirement is simply because
Speaker 2: it's so difficult for us to understand the concept of compounding, right,
Speaker 2: Like it is tough to wrap your mind around. I
Speaker 2: would say that most things in our lives actually occur linearly.
Speaker 2: It's nice and orderly. One thing happens after the other,
Speaker 2: as opposed to things happening exponentially, which, at least personally,
Speaker 2: it feels a bit more chaotic. It's certainly more complex,
Speaker 2: but it's also more difficult to comprehend.
Speaker 1: It's too complex for us to really wrap our minds arend.
Speaker 1: It's kind of like those big, big numbers, like, oh,
Speaker 1: we a trillion dollars worth of this.
Speaker 2: Or that spending. It's like, what exactly does that mean?
Speaker 1: And we see a bill like that and we just
Speaker 1: chalk it up to how future generations just ahead paying
Speaker 1: off these desks. But a trillion dollars is substantial, and
Speaker 1: we just I'll admit I have a hard time explaining
Speaker 1: how much a trillion dollars is. It's pretty it blows
Speaker 1: my mind. Yes, okay, So, for instance, so we're talking
Speaker 1: about numbers. Take a simple math problem of addition five
Speaker 1: plus five plus five plus five plus five and so
Speaker 1: you know the answer.
Speaker 2: Pick me if you're keeping up. You heard me say
Speaker 2: five five times, So we're talking about a sum of
Speaker 2: twenty five.
Speaker 1: There you go, so smart.
Speaker 2: I'm hoping there's a lot of folks that answered out loud.
Speaker 2: But now take those same fives and then multiply them, right,
Speaker 2: So five times five times five times five times five.
Speaker 2: We might have some rare math geniuses out there, but
Speaker 2: the answer here is three twenty five. And this is
Speaker 2: I wouldn't have gotten the one I wouldn't have either. Basically,
Speaker 2: what I'm getting at it's this is a much more
Speaker 2: complex problem, and it's just simply more difficult to comprehend
Speaker 2: and then to actually apply it to our money, specifically
Speaker 2: to our investments.
Speaker 1: But this is so important to understand because this is
Speaker 1: the basis for turns that we're going to get in
Speaker 1: the stock market. It's a different set of skills, and
Speaker 1: most folks are not able to simply figure this out
Speaker 1: on the fly. So let's give another example on the
Speaker 1: compounding front, Matt, Like, imagine taking a big sheet of
Speaker 1: paper and folding it in half, but then you fold
Speaker 1: it in half again and again until you've done this
Speaker 1: fifty times, which fifty sounds reasonable, right, right, because you're like, oh,
Speaker 1: you can do something and a half fifty times, but no,
Speaker 1: you've actually yeah, that's actually physically impossible. Right, But if
Speaker 1: you were to do this, if it were possible, how
Speaker 1: tall would that stack of paper be? It turns out
Speaker 1: would be sixty four million miles tall, around two thirds
Speaker 1: of the distance of the Sun, which is crazy, doesn't
Speaker 1: seem right when you put it in terms like that,
Speaker 1: But that's what would happen if you had the ability
Speaker 1: to make it happen. And so it's no wonder that
Speaker 1: Einstein called compounding interest the eighth wonder of the world.
Speaker 1: It's it's a wonder in the fact that we, like
Speaker 1: our brains can't wrap around it. But it's also a
Speaker 1: wonder in the fact that it can be a wealth generator.
Speaker 1: Even though our rudimentary brains have a hard time understanding
Speaker 1: exactly how it works. The reality is that it does work,
Speaker 1: and it works hard advantage.
Speaker 2: It just doesn't work the way we think it should work, like,
Speaker 2: it just doesn't make sense, even though you can like
Speaker 2: sit down and crunch the numbers, do the math. I
Speaker 2: like the I think the rest of the Einstein quote
Speaker 2: is that, like, those who understand compound interest will actually
Speaker 2: earn it, and those who don't are going to end
Speaker 2: up paying it. But again, just because our dumb brains
Speaker 2: don't actually, like naturally conclude that this is possible, this
Speaker 2: doesn't mean that we can't actually do the math and.
Speaker 1: Figure it out.
Speaker 2: Because we just did it right like people have calculated
Speaker 2: what the distance of that sheet of paper would be
Speaker 2: were you to fold it fifty times and then so
Speaker 2: the trick is to then take these principles and apply
Speaker 2: them to investing. Basically, the earlier that you're able to
Speaker 2: start investing, the more that you're able to keep at it,
Speaker 2: the more that you're going to have at the end
Speaker 2: of the day. What seems small is going to be
Speaker 2: able to grow large because of this reality that can
Speaker 2: just be so difficult to grasp. The longer you allow
Speaker 2: your investments to double and then double again, the more
Speaker 2: money is going to grow, giving you lots more options.
Speaker 2: So one last example, let's say you start out with
Speaker 2: nothing safe for retirement, like literally you've got zero in
Speaker 2: your roth ira or your four one k.
Speaker 1: Hopefully that's not where most of our listens find themselves.
Speaker 2: Hopefully you've got like a little bit of seed money, right,
Speaker 2: but let's say that's that is where you're starting from.
Speaker 2: You you've literally got nothing set aside for retirement. Were
Speaker 2: you to max out your roth ira every year at
Speaker 2: sixty five hundred dollars, it's going to take you a
Speaker 2: little less than thirty six years to reach millionaire status.
Speaker 2: To hit those you know, those seven digits. That is
Speaker 2: a long time, I will say, and again, but that's
Speaker 2: assuming you know you're you're starting with nothing, a little
Speaker 2: less than thirty six years. But then how long before
Speaker 2: you have two million dollars? Well, you'll actually hit that
Speaker 2: milestone in less than ten additional years. But then guess
Speaker 2: what five more years in addition to that. Well, then
Speaker 2: you're up to three million dollars. So the first million
Speaker 2: took you a little less than thirty six years, but
Speaker 2: then the subsequent millions after that then take less than
Speaker 2: ten and then around five years.
Speaker 1: Now we say your first crazy, the first million is
Speaker 1: the hardest.
Speaker 2: Well, yeah, no joke. When you understand compound exactly like
Speaker 2: you can truly understand Like again, it's hard to wrap
Speaker 2: your mind around, but you don't have to totally understand
Speaker 2: it where it makes sense in your mind in order
Speaker 2: for you to put.
Speaker 1: It to use, in order for you to trust the
Speaker 1: principle exactly see the reality of what it can provide. Yeah,
Speaker 1: you're right, and I do think that is a really
Speaker 1: interesting point, that the first million is harder, largely because
Speaker 1: your money is not working for you on your behalf
Speaker 1: yet you're working to funnel money into this account that's
Speaker 1: going to eventually do the work for you. But it
Speaker 1: takes a while for that work to start to start happening.
Speaker 1: But then once it starts happening, it starts to happen quickly.
Speaker 1: It's like a snowball rolling downhill, right, And so that's why, Yeah,
Speaker 1: our brains again have a hard time understanding this concept.
Speaker 1: But if we can kind of at least understand it
Speaker 1: a little bit and then do trust the principle, trust
Speaker 1: the other reality that this is how money works and
Speaker 1: how investing your money is going to help grow your
Speaker 1: money over time, we can take advantage of it. Whereas
Speaker 1: our lizard brain wants to say, I don't know about this.
Speaker 1: I can't quite understand it, and so maybe I should
Speaker 1: avoid like going in this direction. I think that's probably
Speaker 1: where a lot of people, a lot of people stand
Speaker 1: the way a lot of people think about investing or
Speaker 1: saving money for the future.
Speaker 2: Okay, so this is a random thought, but I was
Speaker 2: thinking a back to like five hundred years ago or
Speaker 2: I don't know, like five thousand years ago or something.
Speaker 2: But like, in my mind, the only way that I
Speaker 2: feel like folks way back in time had the ability
Speaker 2: to experience exponential growth or compounding like that is if
Speaker 2: so the beer we're drinking it is called end of plagues.
Speaker 2: Is if they were if there's a plague upon them,
Speaker 2: like literally, like a plague of locusts or rats or
Speaker 2: something like that. I feel like back then they would
Speaker 2: say even then, they didn't totally understand it, even though
Speaker 2: they experienced it. And what they would say is like,
Speaker 2: oh man, the gods must be mad at me. We
Speaker 2: must sacrifice whatever we need to do in order to
Speaker 2: appease the appease the gods. But like that's an example
Speaker 2: of exponential growth, right, Like when you've got a locust
Speaker 2: that multiplies and then those locusts multiple, you know, like
Speaker 2: that is in an instance, I think in natural I
Speaker 2: don't know in the natural environment where you might have
Speaker 2: experienced exponential growth or compounding. Maybe again five hundred years aga,
Speaker 2: so if they've known a little bit more, they would
Speaker 2: have realized what was going on beneath you would have said, Aha,
Speaker 2: here's what's going on.
Speaker 1: This is just science, not some sort of apocalyptic plague
Speaker 1: being sent after me and by some higher power. Yeah sure, yeah, right,
Speaker 1: let's talk about how our lizard brains work against us
Speaker 1: in regards to how we use money in the present too.
Speaker 1: I think one way that our idiot brains keep us
Speaker 1: from making progress is it stops us from investing as
Speaker 1: much as we could or as much as we should,
Speaker 1: because we don't fully comprehend the process or we're not
Speaker 1: willing to funnel our money in that direction. But on
Speaker 1: the other side of the coin is the fact that
Speaker 1: we don't save and invest enough because we're spending every
Speaker 1: dollar we make, and that is the American way, right.
Speaker 1: I think when you look at the savings rate right
Speaker 1: now in the United States of America, it's like, what
Speaker 1: two point three cents on the dollar is what we
Speaker 1: save on average, which is pretty pathetic. And specifically, let's
Speaker 1: throw out some examples, Matt and discuss kind of what's
Speaker 1: going on under the surface. Some situations it might trigger
Speaker 1: our idiot brains, but tricking us really into doing something
Speaker 1: that's not in our best interest. I feel like this
Speaker 1: often hits us on the shopping front, and I think,
Speaker 1: especially in our ever interconnected world, we're just bombarded by ways,
Speaker 1: avenues and means to shop more than ever before too.
Speaker 2: Yeah, like the seventy percent off sign falling prices at
Speaker 2: Walmart or resist like sales like this is trigger us
Speaker 2: so much like I feel like it activates something within
Speaker 2: that lizard brain. It's sort of like this this limited
Speaker 2: time only phenomena, which again a long time ago, we
Speaker 2: had to take advantage of stuff like that when we
Speaker 2: were hunter gatherers. But now the impulse is working against us,
Speaker 2: and even more so given the preponderance actually a fake
Speaker 2: deals out there that can be found online thanks to
Speaker 2: the way that pricing works on the internet. What's the
Speaker 2: actual real price? Who knows?
Speaker 1: Right?
Speaker 2: Like, what is the actual list price? What is the manufacturer?
Speaker 2: Is that the where.
Speaker 1: The thing actually costs?
Speaker 2: Well, of course not because there's profit built in, but
Speaker 2: it's tough to know what, you know, how good of
Speaker 2: a deal that you're actually that you're actually looking at.
Speaker 2: But yeah, when you're shopping Allline and you see that
Speaker 2: it's a negative thirty percent and it's written in all read, yeah,
Speaker 2: we're conditioned to know, oh, it's time to pounce. We've
Speaker 2: been conditioned to know that this is a deal. It's
Speaker 2: a signal to buy and the original price it's great
Speaker 2: out It's got like a little little line cut through
Speaker 2: it and I saw two Amazon. They're just stacking all
Speaker 2: the tactics against us, and now it says like deal
Speaker 2: and is also written in like all caps red letters
Speaker 2: in order to again to kind of evoke that emotion
Speaker 2: that tells us that we should be making a purchase
Speaker 2: right now.
Speaker 1: They want you to feel like a fool for passing
Speaker 1: up on a deal as good as this one, which
Speaker 1: I'm gonna be honest, like this is one that has
Speaker 1: been difficult for me for a long time because that
Speaker 1: I feel like I've gotten a lot better. I've grown
Speaker 1: in this, but only as I've started to realize the
Speaker 1: fact that this is what's happening behind the scenes, right
Speaker 1: only as I've started to be like, wait a second,
Speaker 1: that's my lizard brain trying to get me to do
Speaker 1: something that's not my best interest. But I was like
Speaker 1: all about the deals, and I was like, I realized
Speaker 1: I was just spending too much time thinking about buying
Speaker 1: stuff and trying to get a good deal on things,
Speaker 1: and the best thing to do was to want less
Speaker 1: stuff and to care less about the prices of things
Speaker 1: and just not be into shopping nearly as much as
Speaker 1: I was. So it's I think I inherited that gene
Speaker 1: from my mom to a certain dream. Not trying to
Speaker 1: throw shade mom, but this is one of those things
Speaker 1: where I think a lot of people, especially in today's era,
Speaker 1: when Amazon and Instagram and email newsletters kind of pull
Speaker 1: at us, trying to get us to spend money, hard
Speaker 1: us from our money, and they're using all sorts of
Speaker 1: sneaky tactics. It is. It is something like most of
Speaker 1: us are susceptible to.
Speaker 2: Yeah, well, I mean, like you said, email newsletter or whatever,
Speaker 2: like the abandoned cart email where retailer checks in with you.
Speaker 2: I mean, dude, like there is an entire offering you an.
Speaker 1: Additional discount because you walked away.
Speaker 2: Here's a coupon code. Did life get busy? Like all
Speaker 2: of these things that triggered the like, Oh yeah, this
Speaker 2: is something that was important to me that I should
Speaker 2: be doing and I should be so thankful that they're
Speaker 2: following up with it. At CRM, like customer relationship management,
Speaker 2: that is an entire industry, and it's not that it's evil,
Speaker 2: but I mean their sole goal is to get you
Speaker 2: to buy more stuff, whether that's them keeping up with
Speaker 2: the different purchases that you've made, but not Oftentimes it's
Speaker 2: not even the things that you buy, it's the stuff
Speaker 2: that you're looking at. It's the things like on Instagram,
Speaker 2: it's the ads that you linger on or the ads
Speaker 2: that you swipe on where there's a carousel because you're like, oh,
Speaker 2: I really like that first item. Let me see if
Speaker 2: they got some of the other stuff on sale, And
Speaker 2: then you're feeding the system, going back to the whole
Speaker 2: free TV thing, like they now know more about you.
Speaker 2: That's gonna end up costing you more money down the road.
Speaker 1: Yeah, window shopping used to be a completely innocent activity,
Speaker 1: and now window shopping is watching you a window into
Speaker 1: your soul for advertisers, for people that want to sell
Speaker 1: you stuff, which is only really putting us at more
Speaker 1: of a disadvantage when it comes to like our brain
Speaker 1: and how we react.
Speaker 2: Yeah, and this isn't to like demonize the folks that
Speaker 2: are in that, like I used to be in advertising myself,
Speaker 2: but it's important as consumers to highlight the fact that
Speaker 2: this is what's going on, so that we're essentially we're
Speaker 2: equipping other consumers out.
Speaker 1: So you can put that shield up it's a fair fight, yeah,
Speaker 1: and be like stop, Yeah, well, and we'll give some
Speaker 1: practical ways to in a bit to kind of help
Speaker 1: make that a reality, to help stop your brain from
Speaker 1: progressing this way. But part of the beginning at least
Speaker 1: is to highlight some of the ways that it happens.
Speaker 1: Another thing is like the impulse by right, that's a
Speaker 1: struggle for lots of other people out there. It's not
Speaker 1: just a sale. It's a good deal, but it's and
Speaker 1: maybe sometimes you do find the perfect thing at a
Speaker 1: thrift store or an artist market. I've done that, and
Speaker 1: you make the purchase because it really is kind of
Speaker 1: something that's not going to come along again. But there's
Speaker 1: often something else that causes us to make an impulse buy.
Speaker 1: It's when we feel like we deserve it, right, it's
Speaker 1: time to treat ourselves. Ye. And so maybe you've had
Speaker 1: a hard week at work.
Speaker 2: Which in reality is just a moment of weakness.
Speaker 1: Exactly, That's exactly what it is. It's not that you've
Speaker 1: actually found the right thing that's never going to come
Speaker 1: along again. It's that you're trying to soothe yourself through
Speaker 1: some consumption. And so yet buying something can provide a
Speaker 1: temporary relief, It can make you feel better for a second,
Speaker 1: like you click buy and you're like, ah, I feel
Speaker 1: I'm you know, this is just a method of sweet solace,
Speaker 1: self soothing, right, But look back maybe to a recent
Speaker 1: impulse buy, what emotions triggered it, and how did you
Speaker 1: feel afterwards? I think those are good questions to ask yourself.
Speaker 1: And I realized maybe I'm sounding a little bit like
Speaker 1: a therapist right now, taking a page out of my
Speaker 1: wife's book. But asking those questions are going to help
Speaker 1: you get to the heart of the why behind the
Speaker 1: impulse spending that you've done, and it can allow you
Speaker 1: to recognize them moving forward, because it's typically matt it's
Speaker 1: going to be those same impulses, those same triggers that
Speaker 1: cause you to do it in the future, and if
Speaker 1: you can identify them, you might be able to catch
Speaker 1: yourself in the act next time you are tempted to
Speaker 1: buy on the fly. That's right.
Speaker 2: Yeah, So retailers they also use just different subtle tricks
Speaker 2: out there as well, like free shipping. Again, like when
Speaker 2: it comes to online shopping, that's one of the words
Speaker 2: that's written in all caps emboldened off to the side.
Speaker 1: Do you see free and you.
Speaker 2: Think, oh, yeah, somehow this is free even though there
Speaker 2: is a prices station.
Speaker 1: We know they're not losing money on shipping.
Speaker 2: Come on, exactly, it's not truly free shipping. And we
Speaker 2: also know that even if we pay for something in
Speaker 2: for easy installments, that will end up paying the same
Speaker 2: amount in the end.
Speaker 1: They're just making it easier for you by not pay later.
Speaker 1: Adds to the frictionlessness of it all. Yeah, they're reducing
Speaker 1: the friction just enough, but we know it logically we're
Speaker 1: paying the same amount anyway.
Speaker 2: Yeah, but by doing that, they're able to actually garner
Speaker 2: a sale from us that otherwise they wouldn't get and
Speaker 2: we find ourselves parted with our money when we might
Speaker 2: have otherwise saved it. So again, awareness of how these
Speaker 2: different strategies and tactics and tricks impact us is crucial
Speaker 2: so that we can put up a good fight. I
Speaker 2: will say, like I think for me, I don't know
Speaker 2: for me to say the whole sale mentality, it's not
Speaker 2: something that gets me. You know, my adrenaline, myes don't
Speaker 2: dilate or whatever.
Speaker 1: My people don't do. It's an impervious robot to a
Speaker 1: certain extent.
Speaker 2: But we know what I'm not impervious to what is
Speaker 2: uh messaging, like when they try to sell you an
Speaker 2: image or when they're trying to sell you basically like
Speaker 2: a message, even if it's subconscious, right, Like like I'm
Speaker 2: specifically thinking about it. Like I bought a really nice
Speaker 2: coffee grinder recently. We talked about it, maybe a couple
Speaker 2: months ago. I was thinking about getting Actually we talked
Speaker 2: with Brandon on Monday. That's one of the things him
Speaker 2: and I nerded out about because he actually recently bought
Speaker 2: a blade. Well mine is a flat blade grinder. I
Speaker 2: think his was kinic coal. Oh, I don't know the difference. Yeah,
Speaker 2: he was also considering mine. But the way that that
Speaker 2: thing is styled and the way it's designed, it's it's
Speaker 2: like Matt Black. The design is I mean, it's beautiful.
Speaker 2: It sits there on your counter, and so the reason
Speaker 2: it's well reviewed and stuff is because it actually does
Speaker 2: grind your coffee really really well. So practically speaking, it
Speaker 2: does an excellent job. But you're also buying the image, right.
Speaker 1: Like the way we're always being sold in the image, right.
Speaker 2: Yeah, It's just branded in such a cool way and
Speaker 2: it is like minimalist, and I think there's a part
Speaker 2: of me that bought into that where it's just like,
Speaker 2: by getting this thing, you're gonna be cool, like the
Speaker 2: like all the other guys, like like this is gonna
Speaker 2: make your house look like the counters that this coffee
Speaker 2: grinder is featured on within the picture on our website.
Speaker 1: Yeah, it's okay to have certain aesthetic preferences and to
Speaker 1: say this is my style, this is this is my jam,
Speaker 1: I'm into this. That's totally fine. But I think there's
Speaker 1: also a lot of advertising that is subtly weaving that
Speaker 1: into absolutely our brains and it's saying it's not even
Speaker 1: telling us about the product, it's just by association saying
Speaker 1: if you do or drink or buy or hang out
Speaker 1: with this product, you are by proxy gonna be cooler.
Speaker 1: Then you're gonna be You're currently a cool hit dude,
Speaker 1: right Yeah, And.
Speaker 2: Even if it practically accomplishes what it is that you
Speaker 2: want to accomplish because you are checking off the boxes
Speaker 2: and whatnot, I think we are still susceptible to that
Speaker 2: that kind of branding. And the fact is nobody cares.
Speaker 2: It's not like anybody thinks that I'm cooler because I
Speaker 2: got Like nobody sees the stupid thing like I don't
Speaker 2: invite people over for coffee. Maybe I should, I guess,
Speaker 2: is what I'm now learning just to show off, just
Speaker 2: to show off my fancy grinder. Anyway, I just wanted
Speaker 2: to mention that too, because I think there are some
Speaker 2: of these more subtle, subconscious brandy kind of not like
Speaker 2: you know, not the liquor, but like where there's a
Speaker 2: brand and you're kind of buying into the brand, and
Speaker 2: that's actually how they're able to make this sale. Right,
Speaker 2: it's not that they dropped a sale on me. Is
Speaker 2: it's not that I did it impulsively where no, I've
Speaker 2: been researching this for months, but there's another part of
Speaker 2: it where I paid a premium for it.
Speaker 1: Well, I think that's where they say about billboards and commercials.
Speaker 1: It's not that they're trying to make the sale instantly.
Speaker 1: They're trying to slowly mold your mind into thinking something
Speaker 1: about that product or brand so that eventually you come
Speaker 1: around when you're like, oh wait, now I need a car.
Speaker 1: Ah remember that toilet rab four commercial. Maybe that's the
Speaker 1: one for me. I don't know.
Speaker 2: It's that kind of stuff that really family looked like
Speaker 2: my family. I would see us driving that kind of car.
Speaker 1: Yeah, exactly, that's kind of tricks are being played on us,
Speaker 1: slowly but surely. But there are a lot of things
Speaker 1: that we can do. There are a lot of things
Speaker 1: in our power to react and to combat these subtle
Speaker 1: and not so subtle hints. Sure ways that we're parted
Speaker 1: with our money, whether it's on the spending or just
Speaker 1: on the not investing side. We'll get to a bunch
Speaker 1: of our thoughts on how to make progress, how to
Speaker 1: overcome the lizard brain financially speaking, we'll get to that
Speaker 1: right after this. All right, folks, we are back.
Speaker 2: And we are talking about overcoming your idiot brain. And
Speaker 2: this is just a fun conversation because we're just really
Speaker 2: diving into the psychology.
Speaker 1: Right. I just say, this is not about IQ either.
Speaker 1: This is oh yeah. I think there's a lot of
Speaker 1: people who are like, I'm in mensa, Okay, I don't
Speaker 1: have an idiot brain. My IQ is one forty eight.
Speaker 1: And I think these are the things that again, we
Speaker 1: all have this lizard brain part in the back, and
Speaker 1: we're all tempted to or subconsciously reacting in these ways.
Speaker 1: We're talking about the subconscious no matter how freakan smart
Speaker 1: you are. No matter whether you're an engineer or you
Speaker 1: stock the shelter your local grocery store, it doesn't it
Speaker 1: doesn't matter. We're all susceptible police.
Speaker 2: Well, that's what makes this so interesting, right, Like, we
Speaker 2: are fascinated by just this behavioral psychology element and how
Speaker 2: it is that it's going to impact how we handle
Speaker 2: our money, both collectively as a society but also as individuals.
Speaker 2: And so another factor that plays into how we personally
Speaker 2: interact with our finances has to do with our history
Speaker 2: with money. Our beliefs about money often stem from how
Speaker 2: it impacted us in our childhood. This makes me think
Speaker 2: back to our Freudian Yeah, so we had a conversation
Speaker 2: we had Christy Sheen on the podcast as an interview
Speaker 2: back in episode one to eighteen. We'll link to that
Speaker 2: one in the show in the show notes. But she
Speaker 2: grew up on forty four cents a day in China,
Speaker 2: and when you do that, that is going to make
Speaker 2: you appreciate the wealth and the opportunities available to you
Speaker 2: when you finally arrive in North America or for her,
Speaker 2: Canada specifically Canada's in North America. But if you grew
Speaker 2: up in like an affluent suburb, like, you might have
Speaker 2: seen the downsides of money, right, Like you may have
Speaker 2: been confronted with the signaling and the unhappiness that it
Speaker 2: can produce. Some people, like Christy and much of the
Speaker 2: Fire community, like they are able to see money as
Speaker 2: a tool in order to earn their freedom, And we
Speaker 2: tend to agree that freedom is one of the best
Speaker 2: things that money can buy. But it's important to identify
Speaker 2: your history and what it is is that informs how
Speaker 2: it is that you view money, some of the different
Speaker 2: attributes that you associate with your money.
Speaker 1: Yeah, I think if you grew up in China and
Speaker 1: you come to North America, Canada, Canada, Canada, you see
Speaker 1: I think as mostly a good thing, right, Yeah. But
Speaker 1: if you let's say you hung out with Jordan Belfort,
Speaker 1: Wolf of Wall Street sort of thing which I never
Speaker 1: saw in the movie. I just know very little, But
Speaker 1: if you hung out it's good in those environments, you
Speaker 1: would you might think money is all bad and only
Speaker 1: terrible people have money, right, And so you might just
Speaker 1: there's associations that we make that really when you think
Speaker 1: about it and when you do a little bit of introspection,
Speaker 1: you might be able to find some ties that you
Speaker 1: can untangle a little bit in terms of how you
Speaker 1: view money, and maybe the way you think about it
Speaker 1: stems from some experiences from elementary, middle or high school,
Speaker 1: and some of those things might have informed you well.
Speaker 1: In others maybe not so well. And Sarah Newcomb, who
Speaker 1: writes about money psychology for Morning Star, I like that
Speaker 1: she shared this article you wrote some She had some
Speaker 1: great prompts, some questions really to help reveal what's going
Speaker 1: on under the surface in terms of our money beliefs.
Speaker 1: We'll link to that article in the show notes because
Speaker 1: I think it's helpful to look at. But let's go
Speaker 1: over them real quick, because I think they're just really
Speaker 1: insightful or they can help you find some insight. But
Speaker 1: first she tells people to fill in the blank money
Speaker 1: is what, and then you tell your answer and you
Speaker 1: talk about why. It'll tell you a lot about your
Speaker 1: current underlying beliefs. Money is blank, like fill in the
Speaker 1: blank what is money for you? I think that is
Speaker 1: going to give you a lot of insight as to
Speaker 1: how you think about money, how you feel about money,
Speaker 1: and what's going on below the surface. Second, she says
Speaker 1: if money was a character in your life, would be
Speaker 1: a friend or foe, a villain or hero. I think
Speaker 1: that's a helpful question as well, because some people have
Speaker 1: an inherently antagonistic view and approach towards money. They kind
Speaker 1: of view it as inherently bad. We've talked about how
Speaker 1: it's not. It's really just this kind of neutral thing,
Speaker 1: but we make attachments to it, and I think seeing
Speaker 1: how you view it from that perspective can be helpful. Third,
Speaker 1: she says, growing up, what was your financial situation? How
Speaker 1: did the people raising you handle their money? Do you
Speaker 1: see any ways that this affects the way you think
Speaker 1: about or handle money today? For me, yes, You've talked
Speaker 1: about it with Brandon on Monday's episode. I mean, this
Speaker 1: is one of those things where I was particularly especially
Speaker 1: influenced by the way money was handled in my house
Speaker 1: growing up. I'm sure other listeners have a similar sort
Speaker 1: of story, right background. So, but thinking through those things
Speaker 1: and not just letting them subconsciously inform how you handle money,
Speaker 1: but bringing them to the forefront, to the surface, consciously
Speaker 1: thinking about them will allow you then maybe to combat
Speaker 1: some of those ark realities that you grew up with.
Speaker 2: Yeah, and I would say that, Well, the argument we're
Speaker 2: making is that regardless if it was good or bad,
Speaker 2: your history is going to have an impact no matter what,
Speaker 2: and it oftentimes comes down to how you then react
Speaker 2: to that history, because like in your case, you reactive,
Speaker 2: reacted like you were polarized, like you did the opposite
Speaker 2: essentially right. But like I think back to my history,
Speaker 2: me growing up with money, and like we certainly had enough,
Speaker 2: but it wasn't like the amount of money my folks had.
Speaker 2: But honestly, it was just the great way that they
Speaker 2: talked about it. Like I specifically like I might be
Speaker 2: one of the like, okay, we were talking about compounding earlier,
Speaker 2: and this was a lesson that that I learned, literally,
Speaker 2: I think at age eleven. I specifically remember my dad
Speaker 2: sitting at the desk in our kitchen and him explaining
Speaker 2: compounding interest and when your money starts working harder for
Speaker 2: you than you are able to like, and that puts
Speaker 2: me in incredibly like rarefied waters, Like I was incredibly
Speaker 2: lucky to have had that taught to me at a
Speaker 2: young age. I didn't fully understand it then, but I
Speaker 2: do think that that certainly planted the seeds of my
Speaker 2: you know, the basis I guess of my my financial education.
Speaker 2: But again I'm highlighting this because a I was most
Speaker 2: definitely lucky. But a lot of folks like you said there,
Speaker 2: you tend to go to one extreme or the other right,
Speaker 2: like you either vilify money or you worship it. It
Speaker 2: kind of depends on what happened in your past and
Speaker 2: then how you are reacting to it. But Sarah she Man,
Speaker 2: she had such a great article there, and one of
Speaker 2: the other things she mentioned was to ask yourself if
Speaker 2: money affects your social life, specifically in a good way
Speaker 2: or a bad way. And then finally, this is a quote,
Speaker 2: if money were not a consideration, how would you be
Speaker 2: living your life? Would it be very different from how
Speaker 2: you currently live? And how do you feel about that?
Speaker 2: And that's just I think that's such an incredible and
Speaker 2: incredibly insightful question to ask yourself because I think it
Speaker 2: can help you to be awares to the fact that
Speaker 2: are you doing this truly because of money or maybe
Speaker 2: because of some other deeper maybe calling or mission that's
Speaker 2: driving you. We actually included some other similar questions in
Speaker 2: our how to Money Money Mission Statement worksheet. We'll make
Speaker 2: sure to link to that in our show notes. But
Speaker 2: the truth is, if you want to make more progress
Speaker 2: with your money, the problem likely isn't that you don't
Speaker 2: know enough.
Speaker 1: About roth IRA's right, Like for most of us, the.
Speaker 2: Problem is the man in the mirror, the woman in
Speaker 2: the mirror. Like, it goes much deeper. Don't make me
Speaker 2: throw that song right now? And asking ourselves some of
Speaker 2: these hard questions, you know, doing some of this deep work,
Speaker 2: we think it can transform how it is that everyone
Speaker 2: out there relates to their finances. Just some of the
Speaker 2: realization can be freeing, and it can impact how it
Speaker 2: is that we spend and save our money. It is
Speaker 2: not just the spendaholics, right that need to perform this
Speaker 2: exercise and to look inward. It's possible to be too
Speaker 2: miserly and too frugal as well.
Speaker 1: Yeah that's true. Yeah, no, when you said that if
Speaker 1: money were not in consideration, how would you be living
Speaker 1: your life? Would it be very different from how you
Speaker 1: currently live? I think it's a really really important question
Speaker 1: for us to ask ourselves. For a lot of people
Speaker 1: they might find wait a second, I'm putting too much
Speaker 1: emphasis on money. I have all that I need. If
Speaker 1: only I could incorporate and think about money a little
Speaker 1: bit less and just have more free time. Like those
Speaker 1: are the kind of questions you and I are asking
Speaker 1: ourselves now at this stage in our lives where it's we're.
Speaker 2: A little more coast fire and yeah, we have the
Speaker 2: ability to kind of choose our own path.
Speaker 1: And like we could say, no, we want to continue
Speaker 1: to enhance our lifestyle in a massive way, and so
Speaker 1: it's going to require a lot more money to fund
Speaker 1: this juggernaut for years to come. But no, that's not
Speaker 1: what we care about. But the only asked by asking
Speaker 1: yourself these kinds of questions, can you get to that
Speaker 1: deeper understanding. But you know, regardless of which of those
Speaker 1: camps you might find yourself in at the end of
Speaker 1: the day, both of those tendencies can be taken to
Speaker 1: the extreme, which is really just a manifestation of selfishness.
Speaker 2: And this so basically, if you spend so much, it's
Speaker 2: because you're being selfish and you're spending a lot of
Speaker 2: money on yourself. But if you're being cheap and like
Speaker 2: you know, like I was saying earlier, like meserly, that's
Speaker 2: also a very selfish ash where you're just yeah, it
Speaker 2: makes you think of storing it all away for yourself,
Speaker 2: freaking bad where Walter White always says he's doing it
Speaker 2: for his family, but the reality is his family is
Speaker 2: falling apart while he's like making meth and making bank.
Speaker 2: And the truth is at the end he admits he's
Speaker 2: doing it all for himself the whole time, when it
Speaker 2: was clear to the viewer for all the seasons that
Speaker 2: sounds like he did some good internal work exactly exactly.
Speaker 1: It was all that therapy he was doing that really
Speaker 1: got him to that point. Yeah, glad he reached that point.
Speaker 2: As someone who's never watched the show, right, I'm sure
Speaker 2: that's exactly what it was like, right, something like that
Speaker 2: while counseling or kind of like the Sopranos, Well he
Speaker 2: actually goes to counseling. This doesn't really Yeah, yeah, although
Speaker 2: I never saw that show, but I hear it's great.
Speaker 2: But this is this is natural tendency, right, Like we're
Speaker 2: born as selfish, selfish beings. Our brains are wired toward
Speaker 2: what we can get. Now, this is the lizard brain
Speaker 2: in action, and to keep it all for ourselves or
Speaker 2: for our small tribe, our family. But just because a
Speaker 2: behavior is natural doesn't mean that it's the best path
Speaker 2: to take, and especially in again modern society. And so
Speaker 2: one of the more ultimate ways that were able to
Speaker 2: overcome our dumb brains is to spend our money in
Speaker 2: ways that are sacrificial, to spend or give it away
Speaker 2: in a way that doesn't bring us any benefit at all.
Speaker 2: This is one hundred percent a way that we can
Speaker 2: overcome our idiot brains. And it's a reason that we
Speaker 2: like to encourage folks to be charitable, yes, to give
Speaker 2: their money away, because pretty much all stages of your
Speaker 2: financial journey, if you can be giving away a small
Speaker 2: portion and hopefully a growing portion of what you have
Speaker 2: what you make, it can help reframe money, put it
Speaker 2: in the proper light. And that is so powerful. It's powerful,
Speaker 2: largely for psychological reasons, and to get to see that
Speaker 2: money do good in the world around you. That's beautiful too. Yeah,
Speaker 2: And of course there are, like you said, in ways
Speaker 2: that where we receive no benefit, but we're also even
Speaker 2: incentivized to give money away, like that's just how the
Speaker 2: tax goes to the tax go yeah, yeah, like yeah,
Speaker 2: So it's important to realize that from a principal standpoint,
Speaker 2: we want you to be doing it because it's not
Speaker 2: necessarily going to give you any benefit. But there's also
Speaker 2: the tax benefits, and there's there's kind of like the
Speaker 2: emotional feel good benefits as well, but we're not going
Speaker 2: to get into all of that because something else that
Speaker 2: we can do to actually overcome our idiot brain is
Speaker 2: to automate and to impose limitations on ourselves. We're talking
Speaker 2: about rules and automation because they can help us to
Speaker 2: do the right thing consistently without even having to think
Speaker 2: about it. Because once you opt to put let's say
Speaker 2: six percent into your four h one k, well, that
Speaker 2: joker is on autopilot. You don't have to think about
Speaker 2: it ever. Again, your your paycheck is smaller, but you
Speaker 2: forget about that pretty quickly. Automation helps us to overcome
Speaker 2: our own lack of discipline. And it's not to say
Speaker 2: that it's some sort of crutch. It's an effective tool
Speaker 2: and it's out there and so we want folks to
Speaker 2: use it. But you can also impose artificial limits on
Speaker 2: yourself where you're able to create some friction where it
Speaker 2: didn't exist before, specifically on the shopping front. You know,
Speaker 2: that's something like instituting a twenty four or a forty
Speaker 2: eight hour waiting period. That way, you're not giving into
Speaker 2: those base desires of impulse buying, right or if that
Speaker 2: means that you're on Facebook too much, which can oftentimes
Speaker 2: lead to purchases that maybe you shouldn't have made. A
Speaker 2: loved one of mine recently made approachase on Facebook that
Speaker 2: I'm not sure if that would have happened had that
Speaker 2: ad not been seen. But if that's the case, use
Speaker 2: the newsfeed erratic or plug in. That way, you can
Speaker 2: go straight to the how to Money Facebook group, because
Speaker 2: surely that's the only reason that you need to be
Speaker 2: taking advantage.
Speaker 1: I got to say, I've been using that plug in
Speaker 1: for years. I have no idea what's going on on
Speaker 1: Facebook outside of the how to Money Facebook group, and
Speaker 1: I live in Bliss. I love it.
Speaker 2: Or maybe it even means on your phone just deleting
Speaker 2: Instagram if like me, you have sometimes find yourself, you know,
Speaker 2: flipping through the carousel of the different sales or a
Speaker 2: minimum backcountry put it on page two of your apps. Yes, yeah, yeah,
Speaker 2: push it back a little bit. But there are different
Speaker 2: app limiting services out there. There is this one called
Speaker 2: one sec like one second and opal, but they can
Speaker 2: impose a delay between opening an app and actually seeing
Speaker 2: the content. This is I think can be really helpful
Speaker 2: for both social and investing apps where you're trying to
Speaker 2: give yourself a minute to actually pause and to think
Speaker 2: is this something I need to do? Honestly, I like
Speaker 2: to just stepping backwards, Like, don't necessarily include more technology
Speaker 2: to solve the problems of more technology, but even consider
Speaker 2: taking a step backwards. I mean, I think this is
Speaker 2: why we're seeing the number of flip phones like dumb phones.
Speaker 2: Sales of those have been skyrocketing, whereas sales of smartphones
Speaker 2: have actually declined. Thank Q four of last year, smartphone
Speaker 2: sales decline.
Speaker 1: Oh, I seeing that, whereas.
Speaker 2: Flip phones and like old school Nokia's sales are are
Speaker 2: actually on the rise. But Yeah, that's to me that
Speaker 2: that's an encouraging note. And I think that's something like
Speaker 2: I feel like we're seeing more of that with with
Speaker 2: gen Z because there's a younger, younger generation and they're
Speaker 2: tired of being highjacked having their screen time just completely
Speaker 2: dominate all their free time.
Speaker 1: Yeah, I've been very intrigued by the light phone. I
Speaker 1: haven't made the jump. I haven't even played around with one,
Speaker 1: but I've contemplated, you know, jumping to something like that.
Speaker 1: I don't want to lose. I like podcasts on my phone.
Speaker 1: There's certain things that I like having at my fingertips.
Speaker 1: But then I also realized that that it's that there
Speaker 1: are other things at my fingertips that I wish were
Speaker 1: not there, that are constantly buying for my attention. And
Speaker 1: I wish I didn't even have to think about them.
Speaker 1: I wish they didn't exist. But Mett to wrap this up,
Speaker 1: I mean, going back to that that Carl Jung quote
Speaker 1: at the beginning of the episode that you mentioned about
Speaker 1: making the unconscious conscious our lives, I feel like they
Speaker 1: often feel guided by an invisible hand, which really is
Speaker 1: our subconscious right as well as the market, as like
Speaker 1: Adam Smith said, I know that's really a nod to
Speaker 1: Adam Smith using that terminology, But that invisible hand that guys, I.
Speaker 2: Mean, it's more than you think, because it is the market.
Speaker 2: It is actual companies truing a profit and that are
Speaker 2: trying to sell to you. But it's yeah, it's also
Speaker 2: the subcost.
Speaker 1: It's also the things about today we've experienced at an
Speaker 1: early age, or the things that we've heard our friends say,
Speaker 1: or some sort of experience we had back in eighth grade.
Speaker 1: That informs how we think about money and how we
Speaker 1: handle it now more true than we realize. Yeah, And
Speaker 1: so I think when we unearth some of these thoughts
Speaker 1: and beliefs, we ask some of the deeper why questions,
Speaker 1: it's going to inevitably provide us with new information about ourselves,
Speaker 1: which is going to cause us to change some of
Speaker 1: our preconceived notions and beliefs about money. And then those
Speaker 1: altered beliefs are going to invariably impact how we act,
Speaker 1: how we move forward in this world, how we spend,
Speaker 1: how we say, how we invest. And the truth is,
Speaker 1: money is not good or evil, right. It's a tool
Speaker 1: that can be used well or it can be used poorly.
Speaker 1: And we can either put too much stock in the
Speaker 1: value of a dollar or not enough. But it's hard,
Speaker 1: if not impossible, to change our habits and our approach
Speaker 1: to money when we're not sure where the source belief
Speaker 1: material is coming from, what's subconsciously guiding us where that originates.
Speaker 1: And so I think it's important to do to do
Speaker 1: some of that deep work, not just to go, like
Speaker 1: you said, to some sort of technological halting mechanism to
Speaker 1: prevent us from taking the worst action possible.
Speaker 2: And apps to help you to become your lizard brain.
Speaker 1: Right. Yeah, it's not that some of those apps can't
Speaker 1: be helpful, but I think it's there's deeper work required
Speaker 1: really when it comes to fighting and overcoming our idiot brains.
Speaker 2: Absolutely, man, Yeah, I couldn't have said it better myself.
Speaker 2: Let's get back to the beer that you and I enjoyed.
Speaker 2: This was an end of plagues and IPA by Burial.
Speaker 2: What I'll say, I'll describe the label art. It's a
Speaker 2: the artist that they have that makes all their labels.
Speaker 2: I forget his name. I'll actually make sure to link
Speaker 2: to his Instagram accounts after we've bashed in to Graham
Speaker 2: and how you should believe it in your phone, But
Speaker 2: all of his artwork is super metal.
Speaker 1: This is just the best way to describe it.
Speaker 2: But it's got a rat sitting there who's just like
Speaker 2: eating the earth that a rat or possum possume, I
Speaker 2: don't know either. Plagues are like rats, you know, like
Speaker 2: the bubony, filthy animal. Yeah, it's got the tail, but
Speaker 2: it's just Yeah, there's like filth all.
Speaker 1: Around the earth. Yeah, the conventions gel up really well
Speaker 1: with the pictures, with the artwork, and they're both just
Speaker 1: a little over the top. Yeah.
Speaker 2: Yeah, expect many more ridiculous names of the different burial
Speaker 2: beers that will have in the coming weeks. Yeah, but yeah,
Speaker 2: what were your thoughts though on this beer? I say,
Speaker 2: this was juicy and sharp, and it was almost like
Speaker 2: I pa concentrate, like, yeah, that's how I think of this,
Speaker 2: and but that's how I think of most of the
Speaker 2: burial beers and burial IPAs in particular, because they just
Speaker 2: make some of the thickest, juiciest, beastly, most beastly iPAH. Yeah,
Speaker 2: I would say, so this is a single like a
Speaker 2: regular and in my mind the boty it was relatively
Speaker 2: light and body considering it's burial, and so it felt
Speaker 2: like a like a foundational IPA because there's some other
Speaker 2: ones that we're gonna have that are more.
Speaker 1: Over the top, like maybe this is a nine and
Speaker 1: then the other one's taking up to twelve.
Speaker 2: This is like their equivalent of a session idea. But
Speaker 2: it was really good, solid, and again when you poured it,
Speaker 2: it's kind of got that pale, milky golden color where
Speaker 2: you can't see through it at all. It's sort of
Speaker 2: like the new cars today where like your paint jobs,
Speaker 2: they've got zero metallic speck or fleck or whatever that's
Speaker 2: in them, you know, because like the old school and
Speaker 2: it's super traditional paint jobs. You see them and it's
Speaker 2: kind of it's got a sparkle to it. Yeah, but
Speaker 2: like the new ones, they don't have any sparkle. It's
Speaker 2: just like a flat color. It's shiny, but there's just
Speaker 2: no additional metallic in it.
Speaker 1: That's what this is.
Speaker 2: Yeah, Like it's just solid one note color, but the
Speaker 2: flavor was anything but one note.
Speaker 1: I'm glad you and I got to enjoy this one
Speaker 1: todays definitely all right, that's gonna do it for this one.
Speaker 1: You can as always find show notes for this and
Speaker 1: links to everything we mentioned, as well as a bunch
Speaker 1: of other money resources up on our site at how
Speaker 1: tomoney dot com. Don't forget the how to Money credit
Speaker 1: card tool. You can find that in the upper right
Speaker 1: hand corner of the homepage at howtomoney dot com. It's
Speaker 1: super easy to find the best credit card for you.
Speaker 1: But Matt that's going to do it for this episode
Speaker 1: until next time. Best Friends out and best Friends Out