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Speaker 1: Welcome to How to Money. I'm Joel, and today we're

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Speaker 1: talking built to Borrow the hidden forces behind debt with

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Speaker 1: John Dinsmore. So a lot of people find their way

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Speaker 1: to personal finance podcasts like this one after hitting a

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Speaker 1: few bumps in the road.

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Speaker 2: Often the culprit is debt.

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Speaker 1: Maybe you maxed out your credit cards causing financial and

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Speaker 1: relational problems, and you turn to a podcast like this

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Speaker 1: because you needed help. Well, that's why we do the show.

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Speaker 1: We love to help. But there's often a lot of

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Speaker 1: shame about those past mistakes as well. But maybe, just

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Speaker 1: maybe your debt problems they're not solely about a lack

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Speaker 1: of willpower or a personal vendetta against yourself.

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Speaker 2: Right.

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Speaker 1: My guest today takes a hard look at the financial

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Speaker 1: services industry and how they dangled debt products that lead

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Speaker 1: us astray. John Dinsmore is a marketing professor at Wright

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Speaker 1: State's College of Business. He's gonna help us spot the

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Speaker 1: marketing schemes and the nefarious traps out there so that

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Speaker 1: we can avoid them. Professor John Dinsmore, thank you for

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Speaker 1: joining me on the show today.

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Speaker 3: Thanks for having me Joel, of course.

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Speaker 1: Okay, first question is what do you like to Splurgeohn,

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Speaker 1: I love a good craft beer, but they can be expensive,

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Speaker 1: and so you know, we're trying to do this the

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Speaker 1: smart thing with our money, saving the best for the future.

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Speaker 1: But hey, you guys, spend some money and live life

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Speaker 1: in the here and now, what's that spurge look like

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Speaker 1: for you?

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Speaker 3: It's probably concert tickets. I never splurge for like the

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Speaker 3: really good seats, but I like to go. I mean,

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Speaker 3: it's my probably my favorite thing to do. And now

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Speaker 3: I have a son who's he just started playing music

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Speaker 3: and he's very into seeing live music. So now I can,

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Speaker 3: you know, excuse my splurging by saying it's for the boy,

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Speaker 3: but really it's you know, I try to go to

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Speaker 3: as many concerts as I can go to without you know,

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Speaker 3: missing a mortgage payment.

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Speaker 1: I was talking to someone the other night about in

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Speaker 1: certain towns or in certain spots, like those concerts start later,

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Speaker 1: then do you how do you stay awake for it?

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Speaker 3: Man?

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Speaker 1: That's the problem I find these days. If it's like

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Speaker 1: nine o'clock, doors open, the band starts at ten, I'm

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Speaker 1: asleep by then.

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Speaker 3: Right right, Well, I mean, so I'm fifty three. So

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Speaker 3: a lot of the bands that I grew up going

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Speaker 3: to and I still check back in on. You know,

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Speaker 3: I was the youngest person in the audience when I

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Speaker 3: was a kid, saying, and I feel like I'm still

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Speaker 3: the youngest person in the audience for a lot of

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Speaker 3: these shows at fifty three. So you know a lot

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Speaker 3: of times the shows maybe will end earlier. But you know,

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Speaker 3: I'm with you, especially like you know, doing it on

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Speaker 3: any work day is especially.

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Speaker 2: I'd be like Friday or Saturday. Yeight, yeah, for sure. Okay,

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Speaker 2: last show that you went to, what was it?

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Speaker 3: Actually the last show we went to. So my son

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Speaker 3: is a big Bob Dylan fan and he was on

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Speaker 3: the Outlaw tour with There's Really Yeah, Yeah, Dathaniel Ratliffe,

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Speaker 3: who had heard of but had never heard he was unbelievable.

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Speaker 2: Okay, but it was about.

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Speaker 3: One hundred and fifty degrees outside and we were literally

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Speaker 3: just hiding under a spot of shade because we had

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Speaker 3: lawn tickets. And then some guy who I'm pretty sure

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Speaker 3: didn't get he was probably given these tickets by a client,

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Speaker 3: just came up to us and it's like, it's too

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Speaker 3: hot for me. You know, here are my VIP passes.

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Speaker 3: Why don't you and the boys go in and so

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Speaker 3: was That was awesome once we got out of the heat,

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Speaker 3: but it was up until then it was kind of

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Speaker 3: touch and go.

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Speaker 1: Yeah, Oh my gosh. Those outdoor concerts can be like that.

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Speaker 1: The festivals, I just don't have the stomach for them anymore.

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Speaker 1: But I do love a good show. I don't get

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Speaker 1: out as much as i'd like, but i'd love to

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Speaker 1: hear that's your splurge. I'm okay, let's let's talk about

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Speaker 1: debt and marketing. And your book is kind of at

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Speaker 1: the intersection of these two things, both of which should

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Speaker 1: become kind of more precarious in our society. It seems

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Speaker 1: like in the last a dozen years or so, I'm curious.

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Speaker 1: I hear a lot of people say, well, marketing, advertising

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Speaker 1: doesn't impact me, Like I see the advertisements, they don't

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Speaker 1: have any effect. Is that just wishful thinking on their part?

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Speaker 1: Or are there really some people who are impervious to

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Speaker 1: advertising actually impacting how they think about things and their

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Speaker 1: purchasing decisions.

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Speaker 2: Right?

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Speaker 3: I think most people think marketing works on other people

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Speaker 3: but not on me.

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Speaker 1: Yeah, my brain, it's a lock box, man, No one's

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Speaker 1: getting in here.

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Speaker 3: Absolutely, But I mean the data does not back that

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Speaker 3: up at all. Right, you may think that you've completely

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Speaker 3: rationally and consciously arrived at the choice of judgment that

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Speaker 3: you've made, but there's just reams of research to show that.

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Speaker 3: You know, people, our preferences are not that set. And

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Speaker 3: a lot of times, because we can't be experts in

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Speaker 3: something we're making a decision about, a lot of times

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Speaker 3: we'll lock onto a thing, even if it's an irrelevant

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Speaker 3: thing and to make our decision. So yeah, marketing, you know, advertising,

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Speaker 3: it does work. That's why people companies pump billions dollars

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Speaker 3: into it.

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Speaker 1: Is that because it's more like subtle and long term.

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Speaker 1: Then we give it credit for like I don't see

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Speaker 1: the billboard for a coke and then I'm like, yeah,

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Speaker 1: well one right now. But is it like just how

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Speaker 1: we view the brand and how we view the acceptability

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Speaker 1: of drinking as off drink or something like that. Is

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Speaker 1: it all those subtle things that are impacting us over time.

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Speaker 3: There's a lot of things. So in advertising, you say

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Speaker 3: it's recency versus repetition. So the the best week for

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Speaker 3: selling TVs in the United States is the week before

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Speaker 3: the Super Bowl. So if you're Samsung you're probably planning

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Speaker 3: more ads for your TVs in that week than you

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Speaker 3: would at other times of the year. But if you

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Speaker 3: sell a bunch of TVs that week, it's probably not

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Speaker 3: just because the ads that you ran that week. I mean,

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Speaker 3: I think they helped, but they advertise year round, you know,

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Speaker 3: all year, every year, and because of all of the

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Speaker 3: frequent exposures to it, you start to develop a sense

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Speaker 3: of comfort and familiar already with Samsung. And then of

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Speaker 3: course you have all the other you know, if you

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Speaker 3: have friends who have Samsungs and you know, maybe they've

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Speaker 3: said good things about it. So it's all of these things.

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Speaker 3: So there's stuff in the moment, but you're also bringing

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Speaker 3: you know, baggage for lack of a better word, with

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Speaker 3: you. You know, your past experience is with you. That also

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Speaker 3: helps shape your outlook.

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Speaker 1: It's also fascinating to me that like when you see

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Speaker 1: the stadium naming rights deals and I guess it's just

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Speaker 1: because of like the perpetual mentions of the stadium name

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Speaker 1: when during those TV broadcasts and stuff like that. It's, yeah,

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Speaker 1: it's more of that familiarity coming. It's like, oh, crypto

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Speaker 1: dot com arena. I guess, like crypto dot com is legit,

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Speaker 1: Like I don't know, mana. There's all these like subtle

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Speaker 1: things happening inside of marketing in the ways that we're

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Speaker 1: marketed too, that we're honestly not even aware of. And

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Speaker 1: I'm curious, like, for you, why is consumer debt and

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Speaker 1: the marketing of debt products? Why is that like a

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Speaker 1: particular fascination or an area of study that you've been pursuing.

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Speaker 3: You know, I think you know, when I decided to

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Speaker 3: go back to school to become a professor and you

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Speaker 3: have to start researching things, what you find is when

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Speaker 3: people are researching psychology human behavior, a lot of times

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Speaker 3: they're trying to figure themselves out. Right. So it's I

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Speaker 3: think for me, it was okay, I've I've had so

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Speaker 3: many finance classes. I should understand. I should be in

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Speaker 3: the top whatever percent in terms of finance understanding and skill,

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Speaker 3: and yet I will still follow my face from time

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Speaker 3: to time. And the truth is because a lot of it,

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Speaker 3: it's not just knowing enough about finance. I mean, finance

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Speaker 3: is complicated. People generally try and avoid learning about it

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Speaker 3: if they can because it's uncomfortable. But even if you

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Speaker 3: know a lot, you know there's your knowledge base, but

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Speaker 3: then there's also you know, how are you feeling that day,

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Speaker 3: What is the context of the decision you're making, What

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Speaker 3: else is going on here? All of these things, and

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Speaker 3: then what is the lender telling you or how are

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Speaker 3: they presenting it? Right? That also is going to affect

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Speaker 3: your understanding or lack thereof, of what you're doing.

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Speaker 2: You're right.

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Speaker 1: I mean, it's amazing my psychological state can impact my

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Speaker 1: willingness to buy something or to go on a walk

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Speaker 1: or not. I mean, it's all these things. Yeah, you're right,

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Speaker 1: there's all these things to play, which makes this a

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Speaker 1: fascinating topic. And I'm curious too to hear your take

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Speaker 1: as someone who studied.

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Speaker 2: This for a while.

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Speaker 1: Like, marketing tactics around debt products have improved significantly over

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Speaker 1: the decades, and even to the point of.

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Speaker 3: Making improved in what sense, in the gotcha sense, it's

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Speaker 3: better for us the consumer. Okay, so they're improved. They

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Speaker 3: get they're great at a higher rate of conversion.

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Speaker 1: They're great at it, and they're great at making us

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Speaker 1: feel like like I was.

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Speaker 2: You're the exception to the rule.

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Speaker 1: If you think I'd like to avoid debt, I don't

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Speaker 1: necessarily think that, you know, more debt in my life

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Speaker 1: is a good thing. We've normalized it completely. So I'm

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Speaker 1: curious from your perspective, how good has debt marketing gotten

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Speaker 1: and how has that changed what people see as like

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Speaker 1: acceptable practice. And again, it's like that frog in the

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Speaker 1: in the in the water, and it just like we're

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Speaker 1: slowly turned up the temperature and then it just starts

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Speaker 1: to seem normal after a while.

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Speaker 3: I mean, I think, yeah, the tactics continue to get better.

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Speaker 3: I mean also the tools of marketers, not just for

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Speaker 3: debt but everywhere, right, continue to improve, with you know,

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Speaker 3: all of our digital footprints being left everywhere. You know,

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Speaker 3: So we subscribe to Google TV at home, and there's

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Speaker 3: lots of commercials that I'm like, well, this is obviously

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Speaker 3: served just for us, right, And I mean it got

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Speaker 3: so bad that the other week it kept showing me

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Speaker 3: commercials for a drug for alternative colitis, and I started

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Speaker 3: to worry, like, do I have ulcert of class? Right?

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Speaker 3: Because marketers know so much about us that everything is

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Speaker 3: you know, there's very little that's random about the ads

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Speaker 3: and the messages that you receive now.

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Speaker 1: Right, It's like that famous Target story where they sent

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Speaker 1: some marketing materials to that young lady's house because of

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Speaker 1: what she had been buying at Target, and they were like,

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Speaker 1: you're pregnant, You're gonna want some baby stuff. And they

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Speaker 1: knew before she knew that she was pregnant.

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Speaker 2: Insane.

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Speaker 3: You can't make it up, right, right, I mean, And

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Speaker 3: that was because I in my classes, I talk about

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Speaker 3: the Target example all the time, and that was thirteen

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Speaker 3: years ago, right, Yeah, So whatever they were doing is

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Speaker 3: now considered like archaic, right, So their tactics are probably

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Speaker 3: are not probably they are so much better now, so

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Speaker 3: they can even you know, especially when people are shopping digitally,

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Speaker 3: because I with my classes, we run lots of digital

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Speaker 3: campaigns all the time. I mean, you can optimize for

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Speaker 3: the right word, the right image, all of this. Everything

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Speaker 3: is completely quantified, yeah, and then optimized to get certain

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Speaker 3: types of buyers, certain types of messages and images. And

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Speaker 3: that's definitely going to apply to finance as well.

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Speaker 1: So we're gonna talk a lot about marketing, deceptive marketing,

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Speaker 1: sinister marketing, even but you say that when marketing is

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Speaker 1: done right, it creates a virtuous cycle. So what does

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Speaker 1: good marketing look like on the front end? Like how

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Speaker 1: and how can we maybe maybe pointing to what good

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Speaker 1: marketing looks like and help us to identify the difference

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Speaker 1: and maybe avoid some of the worst kinds.

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Speaker 3: Right, I mean I think you can. You know, in

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Speaker 3: my mind, when marketing is a force for good, it's

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Speaker 3: taking something that has real value to people clearly and

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Speaker 3: honestly communicates what that value is, and then the person

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Speaker 3: can make an informed decision and hopefully by it and

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Speaker 3: that person gets something that they really like and enhances

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Speaker 3: their life in some way. Right, And there aren't even

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Speaker 3: players in finance, and I wish I could their names

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Speaker 3: is escaping me. But there's a few companies that are

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Speaker 3: really specializing in trying to create good financial habits and

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Speaker 3: get people be more clear in their marketing so that

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Speaker 3: people can trust their source of financing. Then I think

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Speaker 3: it's very much a source for good. I mean, we

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Speaker 3: need loans, we need credit. I mean, you can't live

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Speaker 3: in a modern life without it. But the problem is

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Speaker 3: when people commit to things that they don't understand, maybe

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Speaker 3: because they lack understanding, or maybe they didn't put as

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Speaker 3: much effort into their searches maybe they should have. But

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Speaker 3: a lot of times it's also because things are communicated

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Speaker 3: in a you know, to be a nice ambiguous way, right.

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Speaker 1: Yeah, and some of those products can be complex, right,

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Speaker 1: They can be difficult to understand. So I guess is

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Speaker 1: a lack of personal finance education. Part of the problem, too,

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Speaker 1: is would that help. Are we basically like failing the

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Speaker 1: next generation of young folks feeding them to the marketing

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Speaker 1: sharks because we haven't really set them up to understand

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Speaker 1: even just the basic concepts of personal finance very.

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Speaker 3: Well, right? I mean, you know there's I think culturally

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Speaker 3: in the US, you know, we do feel like, well,

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Speaker 3: you know, buyer beware, like you are responsible for your

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Speaker 3: own decisions. And to a degree that's true. But on

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Speaker 3: the other hand, you know, you will have seventeen and

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Speaker 3: eighteen year old kids signing on for things like student

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Speaker 3: loans or their first credit card. Yeah, and a lot

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Speaker 3: of times it's not just being a kid. A lot

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Speaker 3: of times we don't learn about things we should learn

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Speaker 3: about until we've had some sort of mishap, Right, And

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Speaker 3: if you're talking about something like student loans or credit cards,

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Speaker 3: that can be a mishap that follows them around for years.

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Speaker 1: Right, And we sold them the idea of something that's

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Speaker 1: that's normal, right, Like student loans are good because you're

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Speaker 1: going to get the degree and you're going to get

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Speaker 1: a good job. And what you don't realize is, yeah, maybe,

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Speaker 1: within reason, right, a certain amount of student loans.

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Speaker 2: Could be a solid idea.

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Speaker 1: But when you're seventeen or eighteen years old, you're not

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Speaker 1: well equipped to understand if someone's willing to lend you

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Speaker 1: the money. You must think they know better, and then

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Speaker 1: it's a good idea for you to take out the

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Speaker 1: full amount.

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Speaker 3: No, I think that's an excellent point. I think most

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Speaker 3: of us think of lenders as kind of this omniscient

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Speaker 3: institutional power that you know, the rate you get is

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Speaker 3: just the rate, right, based on your credit score and

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Speaker 3: all these different things. But the truth is, you know,

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Speaker 3: we actually, as consumers, we do have power to shop around.

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Speaker 3: You know, research shows what determines our cost of debt

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Speaker 3: is not What is a bigger factor than even credit

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Speaker 3: scores is the amount of effort that we put into

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Speaker 3: shopping for and selecting these types of products. But again,

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Speaker 3: when we're talking about people who are just coming into

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Speaker 3: it at eighteen years of age, they don't know that

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Speaker 3: they haven't been taught it I am encouraged that. I

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Speaker 3: think twenty five of our states have made financial literacy

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Speaker 3: a requirement in high schools, including meet here in Ohio.

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Speaker 3: And you're definitely going to need that more than you're

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Speaker 3: probably going to need some of the other classes that

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Speaker 3: you take. I mean, you can't get away from personal finance.

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Speaker 1: You're speaking my language, John, I totally agree. It's like

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Speaker 1: a it's a shame that this thing that we use

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Speaker 1: every day moving forward. Physics was great my junior year

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Speaker 1: of high school, but I haven't used it again, and

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Speaker 1: I would. I would just Yeah, having at least a

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Speaker 1: modicum of personal finance education in high schools, and you're right,

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Speaker 1: half of states now require it is at least setting

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Speaker 1: us up to start to ask the right questions or no,

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Speaker 1: enough to make us a little bit dangerous on that

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Speaker 1: front to protect ourselves. Just in regards to debt in general,

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Speaker 1: do you think that we have failed to question the

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Speaker 1: basic premise of whether their debt makes sense? We've just

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Speaker 1: made in so many ways right. Debt has greased the

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Speaker 1: wheels of our economy, both personal on a micro and

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Speaker 1: a macro level. But then we've normalized it to such

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Speaker 1: an extreme, especially especially in the United States that so

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Speaker 1: many people suffer dramatically from debt overload and not having

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Speaker 1: saved enough for retirement because they're paying off all the

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Speaker 1: different debts that they've taken out. Is that marketing at

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Speaker 1: work to really get us to take on more delays

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Speaker 1: or just or is it like I don't know, lacks

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Speaker 1: political infrastructure.

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Speaker 3: I would say all of the above, right. I mean,

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Speaker 3: I don't begrudge a marketer of a finance company trying

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Speaker 3: to get more business for the company they work for, Right,

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Speaker 3: that's their job. They're going to lose their job if

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Speaker 3: they don't do that. But the devil is in you know,

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Speaker 3: are you being clear with people? Are you doing some

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Speaker 3: things that intentionally mislead folks? Right? I do think culturally

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Speaker 3: in the United States, we you know, we tend to

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Speaker 3: be hands as hands off as we can be. We

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Speaker 3: don't want to infringe on a company's ability to you know,

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Speaker 3: conduct business. But at the same time, if we have

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Speaker 3: a society that is too encumbered with debt long term,

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Speaker 3: it's going to be a long term drag on the

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Speaker 3: productivity of this country. And I think if you look

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Speaker 3: at research on you know, most people don't really understand

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Speaker 3: how interest rates work, and yet it doesn't matter. These

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Speaker 3: people have to go out there and take out loans

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Speaker 3: and negotiate interest rates anyways. Yeah, I mean it would

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Speaker 3: be all right put a bunch of six year olds

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Speaker 3: behind the wheel of a car and see what happens. Right, Usually,

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Speaker 3: we want to make sure people know what they're doing

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Speaker 3: before they engage with it. So I personally think there's

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Speaker 3: more room for some common sense rules to make sure

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Speaker 3: that people really understand what they're getting into.

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Speaker 1: Yeah, I think you're right, Like, people don't understand it

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Speaker 1: in the positive direction compounding returns, like if I start investing,

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Speaker 1: even just a little bit when I'm young, how much

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Speaker 1: that can grow into And they don't understand it from

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Speaker 1: the negative perspective of a twenty two percent interest rate

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Speaker 1: on a credit card and having that revolving ten thousand

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Speaker 1: dollars balance and how that impacts them either or something

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Speaker 1: as simple as shopping or with multiple lenders for a

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Speaker 1: home loan. Right, and now you know, the federal government

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Speaker 1: has released statistics and they show just how much the

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Speaker 1: average person saves just by shopping with three lenders versus one,

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Speaker 1: and it's significant and so like to the two tens

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Speaker 1: of thousands of dollars over the life of the loan.

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Speaker 1: Oh yeah, you were talking about some of the worst

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Speaker 1: debt products too.

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Speaker 3: There.

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Speaker 1: You call them in your book, you call them booby traps,

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Speaker 1: and gosh, man, some of them are seem so incredibly nefarious.

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Speaker 1: And in some states, for instance, they've like outlawed loans

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Speaker 1: above a certain interest rate right payday loans for instance,

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Speaker 1: which trap people perpetually in debt that they just can't

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Speaker 1: get away from because it's almost impossible because of the

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Speaker 1: way the terms are set up. So how do you

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Speaker 1: think about the credit card versus like the scale of badness?

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Speaker 1: I guess in some of these debt products in the

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Speaker 1: way that they get marketed, right.

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Speaker 3: I mean, there's so many credit cards and they have

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Speaker 3: so many different provisions and those it's hard to point

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Speaker 3: to because there's some good credit cards out there. But

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Speaker 3: you were talking about you had mentioned things like, you know,

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Speaker 3: payday loans and things like that, and those are products

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Speaker 3: that almost exclusively to target people in low income areas.

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Speaker 3: And this is both you know, low income urban centers

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Speaker 3: as well as more rural areas, and so they they

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Speaker 3: prey on people's lack of sophistication, but also lack of options. Right.

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Speaker 3: There's a study that came out like two years ago

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Speaker 3: that showed in impoverished neighborhoods, if there was a blood

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Speaker 3: donation center where you could sell your plasma, it reduced

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Speaker 3: usage of payday loans in that area by whatever percent,

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Speaker 3: it was a significant number. I forget the exact number, right,

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Speaker 3: So it suggests that you know, even if folks aren't

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Speaker 3: a master of you know, if they can't come up

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Speaker 3: with an amortization table or you know, their masters of finance,

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Speaker 3: they still understand that a lot of these places are

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Speaker 3: really pretty rough and overly expensive because they will sell

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Speaker 3: their plasma rather than have to go, you know, just

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Speaker 3: to save themselves, you know, another trip to one of

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Speaker 3: these predatory places. So, you know, there have been debates

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Speaker 3: that have come up about you know, obviously, we want

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Speaker 3: banks to be able to locate where they think makes

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Speaker 3: the most sense for their business, but maybe there are

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Speaker 3: opportunity where the free market can't provide. Maybe there's opportunities

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Speaker 3: for kind of a public private partnership where you know,

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Speaker 3: post offices, social security offices, DMVs, places that have locations everywhere,

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Speaker 3: including impoverished areas. Maybe these can be storefronts for market

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Speaker 3: rate banking services for a lot of folks. I think

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Speaker 3: it's really just getting them some options because a lot

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Speaker 3: of folks know, Hey, I'd rather not go to a

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Speaker 3: payday lender. But at the same time, you know, there's

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Speaker 3: not a Bank of America in my neighborhood, So what am.

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Speaker 2: I going to do? No.

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Speaker 1: I think it's very true, and especially you're right it's

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Speaker 1: urban in world. Some of the smaller rural towns I

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Speaker 1: drive through. I'm shocked at how many title loan payday

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Speaker 1: loan kind of places there are. It feels like they're

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Speaker 1: as many McDonald's as there are title loans places or

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Speaker 1: something like that. And yeah, which again that's part of normalization.

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Speaker 1: It feels like that's the place you turn when you

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Speaker 1: need money. We've got more questions to get to with you, John,

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Speaker 1: including I want to talk about status and how we

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Speaker 1: think about status, status, whatever, how we think about that

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Speaker 1: in terms of our financial decisions, and how that impacts

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Speaker 1: some of those important decisions we make. We'll get to

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Speaker 1: more with Professor John Dinsmore right after this.

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Speaker 2: Our we're back.

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Speaker 1: We're still talking about the hidden forces behind debt. And marketing,

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Speaker 1: the marketing that happens behind debt and how it catches

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Speaker 1: us in the web we make decisions maybe we wouldn't

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Speaker 1: otherwise make. With Professor John Dinsmore, I was so interested

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Speaker 1: when you were writing about prediction bias. Those super interesting then,

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Speaker 1: because you in your book you cover a lot of

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Speaker 1: kind of some of those behavioral elements, some of the

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Speaker 1: ways that marketing impacts us or even just like that

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Speaker 1: we're wired to make decisions, and so yeah, how there's

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Speaker 1: that intersection of marketing tactics and our own human insufficiencies

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Speaker 1: and realities that like, gosh, it feels like a right

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Speaker 1: place for us to get taken advantage of.

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Speaker 3: Yeah, for sure. I mean, well, inherent in taking out

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Speaker 3: any debt or credit is you have to think about

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Speaker 3: what your future circumstances are going to be. And we

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Speaker 3: are as a species very optimistic, right We always we

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Speaker 3: tend to think when we think about the future, we're

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Speaker 3: not thinking about, oh, I'm going to get passed over

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Speaker 3: for this promotion and then you know, my car is

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00:22:45,400 --> 00:22:48,800
Speaker 3: gonna die, And it's it's when we think about the future,

435
00:22:48,960 --> 00:22:52,360
Speaker 3: it's we're getting the promotion, things are working out, we're

436
00:22:52,400 --> 00:22:56,880
Speaker 3: making more So, a lot of people are less cautious

437
00:22:56,920 --> 00:23:00,800
Speaker 3: about taking on debt because they're very optimistic about the future.

438
00:23:00,840 --> 00:23:05,000
Speaker 3: But you know, if you live long enough, you understand

439
00:23:05,080 --> 00:23:08,320
Speaker 3: that even if things go up, it's not a straight

440
00:23:08,440 --> 00:23:10,560
Speaker 3: ride up, right, there's going to be some stumbles and

441
00:23:10,600 --> 00:23:11,840
Speaker 3: some mishaps along the way.

442
00:23:11,920 --> 00:23:13,800
Speaker 1: It's like, how long I tell my wife it's going

443
00:23:13,880 --> 00:23:15,800
Speaker 1: to take me to fix something around the house, and

444
00:23:16,000 --> 00:23:17,760
Speaker 1: she knows to five.

445
00:23:17,720 --> 00:23:21,479
Speaker 3: X that yes, no, no, absolutely, Like I definitely resemble

446
00:23:21,520 --> 00:23:25,359
Speaker 3: that remark as well. So people tend to borrow on

447
00:23:25,440 --> 00:23:27,920
Speaker 3: how much they think they're going to be making rather

448
00:23:27,960 --> 00:23:31,359
Speaker 3: than how much they make, and that you know that

449
00:23:31,400 --> 00:23:32,159
Speaker 3: can be a mistake.

450
00:23:32,520 --> 00:23:34,920
Speaker 1: Is are there ways in which we're allowing the marketers

451
00:23:34,920 --> 00:23:37,560
Speaker 1: into our lives more than we should and maybe that's

452
00:23:37,600 --> 00:23:40,800
Speaker 1: also wearing us down. I'm just thinking about who we

453
00:23:40,840 --> 00:23:44,280
Speaker 1: follow on Instagram, the newsletters we sign up for, the

454
00:23:44,320 --> 00:23:47,640
Speaker 1: ways in which we're just like, come on in, and

455
00:23:48,280 --> 00:23:52,840
Speaker 1: I'm going to be wise enough and sane enough to

456
00:23:52,920 --> 00:23:55,159
Speaker 1: make the decision I want to make at the right moment.

457
00:23:55,600 --> 00:23:58,640
Speaker 1: But maybe marketers are wearing us down in a way

458
00:23:58,680 --> 00:24:00,320
Speaker 1: that's hard for us to see.

459
00:24:00,320 --> 00:24:01,520
Speaker 2: You on the front end yeah.

460
00:24:01,359 --> 00:24:04,000
Speaker 3: I mean I think right. I mean, the these devices

461
00:24:04,000 --> 00:24:06,720
Speaker 3: we have with us all the time, they're supposed to

462
00:24:06,760 --> 00:24:09,280
Speaker 3: make us more productive and more informed, but for the

463
00:24:09,280 --> 00:24:11,840
Speaker 3: most part, they make us more stressed and more overwhelmed.

464
00:24:12,320 --> 00:24:15,480
Speaker 3: And when we're stressed or overwhelmed, we're just not thinking

465
00:24:15,480 --> 00:24:19,600
Speaker 3: as clearly about things, so we're more susceptible. If you

466
00:24:19,680 --> 00:24:24,480
Speaker 3: are old enough to remember kind of the heyday of infomercials,

467
00:24:24,600 --> 00:24:27,879
Speaker 3: so you know, if you wanted to see like the

468
00:24:27,960 --> 00:24:31,840
Speaker 3: Ronco pocket Fishermen, well they you know, these odd ball devices.

469
00:24:32,400 --> 00:24:34,720
Speaker 3: You would see them on infomercials, usually in the middle

470
00:24:34,720 --> 00:24:37,000
Speaker 3: of the night, like two in the morning, when it's

471
00:24:37,040 --> 00:24:39,840
Speaker 3: pretty much only insomniacs or people who have you know,

472
00:24:40,200 --> 00:24:43,080
Speaker 3: been drinking a lot are up. And there's a reason

473
00:24:43,080 --> 00:24:46,800
Speaker 3: for that, right that they your inhibitions are down, your

474
00:24:47,000 --> 00:24:51,320
Speaker 3: reasoning is diminished, and so it's it's a bit easier

475
00:24:51,359 --> 00:24:54,639
Speaker 3: to get someone to, you know, to commit to something

476
00:24:55,920 --> 00:24:57,959
Speaker 3: under those conditions than they would if they had all

477
00:24:58,000 --> 00:24:59,400
Speaker 3: of their faculties about them.

478
00:24:59,560 --> 00:25:05,600
Speaker 1: Yeah, and we're almost signing up for faculty diminishment on

479
00:25:06,080 --> 00:25:09,800
Speaker 1: of our own volition by just allowing these marketers more

480
00:25:10,000 --> 00:25:13,040
Speaker 1: free wheeling access to us. I'm curious too to hear

481
00:25:13,080 --> 00:25:14,560
Speaker 1: your thoughts on the balance, and I feel like you've

482
00:25:14,560 --> 00:25:16,840
Speaker 1: done a good job on this so far. But when

483
00:25:17,280 --> 00:25:21,639
Speaker 1: you're buying a home, you take on a mortgage, typically

484
00:25:21,720 --> 00:25:25,280
Speaker 1: right eventually. I mean, there's a surprising amount of percentage

485
00:25:25,280 --> 00:25:27,200
Speaker 1: of people in the United States who own their home

486
00:25:27,640 --> 00:25:30,600
Speaker 1: with no mortgage, something like thirty percent of people, which

487
00:25:31,080 --> 00:25:31,840
Speaker 1: bubbles my mind.

488
00:25:31,840 --> 00:25:34,800
Speaker 3: It's a very different frame of reference from my own life.

489
00:25:34,840 --> 00:25:38,360
Speaker 1: But yes, yeah, yeah, but I for one am thankful

490
00:25:38,440 --> 00:25:40,440
Speaker 1: that when it came to buying a home that there

491
00:25:40,480 --> 00:25:42,720
Speaker 1: was a debt product available so that I could buy

492
00:25:42,720 --> 00:25:44,520
Speaker 1: a home before I saved up the cash, because I've

493
00:25:44,560 --> 00:25:46,359
Speaker 1: had to save up the cash.

494
00:25:46,560 --> 00:25:47,920
Speaker 2: Yeah, I don't know if I don't a home yet.

495
00:25:47,920 --> 00:25:49,199
Speaker 1: You know, it's like one of those things where the

496
00:25:49,240 --> 00:25:52,240
Speaker 1: decision will get delayed forever, the can will get kicked

497
00:25:52,240 --> 00:25:54,840
Speaker 1: down the road. So how do you think about that

498
00:25:54,880 --> 00:25:57,040
Speaker 1: intersection where like, some of these debt products really do

499
00:25:57,560 --> 00:26:02,119
Speaker 1: allow us within solid parameters to live a better life.

500
00:26:02,440 --> 00:26:04,720
Speaker 3: Oh absolutely, I mean it's and some of them are

501
00:26:04,880 --> 00:26:08,639
Speaker 3: very kind of nobly created. If you think about things

502
00:26:08,720 --> 00:26:13,679
Speaker 3: like special Veterans Administration loans for people to for veterans

503
00:26:13,720 --> 00:26:16,040
Speaker 3: to buy a house. I mean, this is a it's

504
00:26:16,040 --> 00:26:19,800
Speaker 3: a class of people who we value highly, but maybe

505
00:26:19,840 --> 00:26:24,000
Speaker 3: they haven't been compensated you know a lot, right, So

506
00:26:24,760 --> 00:26:28,879
Speaker 3: creating programs to make sure that people who have you know,

507
00:26:29,160 --> 00:26:31,159
Speaker 3: done this thing that we value highly will still have

508
00:26:31,240 --> 00:26:34,960
Speaker 3: access to you know, the American dream, buying a home,

509
00:26:35,080 --> 00:26:37,200
Speaker 3: going to college, all of these things. These are all

510
00:26:37,240 --> 00:26:41,560
Speaker 3: things that are still worthwhile ventures. Now you can get

511
00:26:41,560 --> 00:26:46,080
Speaker 3: into trouble with if it's not the financial products. Then

512
00:26:46,240 --> 00:26:49,960
Speaker 3: you know, there's some colleges out there that aren't accredited

513
00:26:50,200 --> 00:26:53,080
Speaker 3: and are really just after your student loan money and

514
00:26:53,119 --> 00:26:57,840
Speaker 3: things like that. So you need credit and debt to

515
00:26:58,520 --> 00:27:01,800
Speaker 3: Most of us do to accomplish so very key things

516
00:27:01,840 --> 00:27:05,120
Speaker 3: in our life. But the trick is to not fall

517
00:27:05,119 --> 00:27:07,800
Speaker 3: into a product that we don't understand and then it

518
00:27:07,880 --> 00:27:09,760
Speaker 3: might ultimately eat us.

519
00:27:10,400 --> 00:27:13,480
Speaker 1: One of the other like psychological realities that you talk

520
00:27:13,520 --> 00:27:16,560
Speaker 1: about in your book is loss a version and how

521
00:27:16,680 --> 00:27:20,440
Speaker 1: you talk about how marketers kind of prey on that

522
00:27:20,760 --> 00:27:23,240
Speaker 1: basic human instinct. Can you can you share a little

523
00:27:23,240 --> 00:27:23,719
Speaker 1: bit about that.

524
00:27:24,040 --> 00:27:28,520
Speaker 3: The example that pops to mind, so, you know, my

525
00:27:28,880 --> 00:27:32,679
Speaker 3: wife's car a couple of years ago rather spectacularly just died.

526
00:27:32,920 --> 00:27:34,960
Speaker 3: Like we went out to lunch and we looked out

527
00:27:35,000 --> 00:27:36,880
Speaker 3: the window we were about to leave, and we could

528
00:27:36,880 --> 00:27:40,199
Speaker 3: see just this huge pool of oil laying under the car.

529
00:27:40,760 --> 00:27:43,399
Speaker 3: And you know, then we it was officially pronounced dead

530
00:27:44,119 --> 00:27:46,920
Speaker 3: at the shop an hour later. So we had to

531
00:27:46,920 --> 00:27:49,520
Speaker 3: go get a car. And so we we bought a

532
00:27:49,560 --> 00:27:54,160
Speaker 3: car knew that had a you know, a strong reputation

533
00:27:54,440 --> 00:27:59,639
Speaker 3: for reliability. And you know, the whole sales pitch was

534
00:27:59,680 --> 00:28:02,200
Speaker 3: this thing, you're going to drive this thing, you know, forever,

535
00:28:02,520 --> 00:28:05,440
Speaker 3: and it's super safe, it's super reliable. And then as

536
00:28:05,440 --> 00:28:08,919
Speaker 3: soon as you commit, then they start telling you. But

537
00:28:09,520 --> 00:28:13,160
Speaker 3: you know, even reliable cars fail, right, so you're gonna

538
00:28:13,160 --> 00:28:15,200
Speaker 3: want to get this extended warranty, or you're gonna want

539
00:28:15,200 --> 00:28:17,840
Speaker 3: to pay a thousand bucks for the coding of all

540
00:28:17,880 --> 00:28:18,480
Speaker 3: these things.

541
00:28:18,880 --> 00:28:21,280
Speaker 2: Nothing's going to happen, but it could, right, I.

542
00:28:21,320 --> 00:28:23,600
Speaker 3: Mean, And so that's part of that is loss of version.

543
00:28:23,680 --> 00:28:23,800
Speaker 1: Right.

544
00:28:23,840 --> 00:28:27,720
Speaker 3: We're afraid of losing more than we love winning. So

545
00:28:28,200 --> 00:28:30,360
Speaker 3: when we're in a position to say we don't want

546
00:28:30,359 --> 00:28:33,200
Speaker 3: to make a bad decision, sometimes we end up taking

547
00:28:33,240 --> 00:28:38,320
Speaker 3: on things that you know objectively aren't in our best interest. Right,

548
00:28:38,440 --> 00:28:42,040
Speaker 3: So paying the extend, you know, buying the extended warranty

549
00:28:42,080 --> 00:28:45,640
Speaker 3: on the car, or paying for these other things because

550
00:28:46,320 --> 00:28:48,000
Speaker 3: you don't want to buy this car and then have

551
00:28:48,680 --> 00:28:52,800
Speaker 3: a low probability thing happened to you down the line, right,

552
00:28:53,840 --> 00:28:56,400
Speaker 3: So yeah, I think there is. I mean, you could

553
00:28:56,400 --> 00:28:58,800
Speaker 3: see a lot of credit and insurance is based on

554
00:28:58,880 --> 00:29:02,080
Speaker 3: that kind of fear appeal, right that you know, you

555
00:29:02,080 --> 00:29:04,120
Speaker 3: don't want to look like you made a bad decision here,

556
00:29:04,160 --> 00:29:06,200
Speaker 3: so let's, you know, give us a bunch of money

557
00:29:06,200 --> 00:29:07,520
Speaker 3: and we'll make sure that doesn't happen.

558
00:29:07,800 --> 00:29:10,160
Speaker 1: And some of those products make sense, right, like term

559
00:29:10,200 --> 00:29:12,960
Speaker 1: life insurance, Like the truth is, if you're dyeing your

560
00:29:12,960 --> 00:29:16,480
Speaker 1: income stops like that could significantly impact your family.

561
00:29:16,560 --> 00:29:18,480
Speaker 2: But then when you're buying a.

562
00:29:18,360 --> 00:29:20,760
Speaker 1: Two hundred and fifty dollars laptop and they're like, do

563
00:29:20,800 --> 00:29:23,720
Speaker 1: you want this fifty dollars extended warranty because that laptock

564
00:29:23,880 --> 00:29:26,320
Speaker 1: could croak in the next two years and you want

565
00:29:26,320 --> 00:29:28,840
Speaker 1: to be safe, Like that's not a great product. And

566
00:29:28,920 --> 00:29:31,960
Speaker 1: so I think for for individuals trying to figure out, well,

567
00:29:32,080 --> 00:29:34,200
Speaker 1: I think some of these products are helpful and they

568
00:29:34,200 --> 00:29:35,960
Speaker 1: really do protect my family, They really do give me

569
00:29:36,000 --> 00:29:38,520
Speaker 1: peace of mind. Then there's others that are just you know,

570
00:29:38,600 --> 00:29:41,360
Speaker 1: a complete you know, it could come out to benefit me,

571
00:29:41,400 --> 00:29:44,040
Speaker 1: but if you look at the numbers, it's unlikely to

572
00:29:44,080 --> 00:29:45,320
Speaker 1: be the kind of insurance that helps.

573
00:29:45,360 --> 00:29:49,080
Speaker 3: Yeah. I mean, these things are structured to guarantee a return,

574
00:29:49,160 --> 00:29:51,280
Speaker 3: and the return is we're not going to have to

575
00:29:51,280 --> 00:29:54,280
Speaker 3: pay out that many claims on this for sure.

576
00:29:54,520 --> 00:29:56,840
Speaker 1: Talk about mental accounting, because that's one of those things

577
00:29:56,840 --> 00:29:59,960
Speaker 1: too where I think we you say in the book

578
00:30:00,480 --> 00:30:05,480
Speaker 1: your internal bookkeeper is heavily concussed, and which is just

579
00:30:05,480 --> 00:30:07,480
Speaker 1: a funny line, but it just makes me think. I

580
00:30:07,480 --> 00:30:10,160
Speaker 1: think we think we're smarter than we are sometimes and

581
00:30:10,200 --> 00:30:12,760
Speaker 1: that we can do some quick mental accounting and we're like, yeah,

582
00:30:12,760 --> 00:30:16,840
Speaker 1: I know which way to go. But that maybe that's

583
00:30:16,880 --> 00:30:17,800
Speaker 1: not true.

584
00:30:17,640 --> 00:30:20,320
Speaker 3: Right, I Mean, the truth is, as smart as any

585
00:30:20,320 --> 00:30:22,920
Speaker 3: of us may be, we are still probably more emotional

586
00:30:22,960 --> 00:30:26,400
Speaker 3: than we are rational and our feelings. We take our

587
00:30:26,400 --> 00:30:29,480
Speaker 3: feelings as information in a lot of cases. So how

588
00:30:29,480 --> 00:30:33,560
Speaker 3: does this apply to mental accounting and money? Well, different

589
00:30:33,600 --> 00:30:37,280
Speaker 3: contexts or how we pay for things feels differently, right,

590
00:30:37,360 --> 00:30:39,640
Speaker 3: So if you're paying cash for a bunch of things,

591
00:30:40,000 --> 00:30:44,040
Speaker 3: there is some amount of internal conflict or pain We'll say,

592
00:30:44,080 --> 00:30:47,240
Speaker 3: when you pay for something right, you're pulling the cash out,

593
00:30:47,240 --> 00:30:49,440
Speaker 3: you're acutely aware of how much you've put out, how

594
00:30:49,520 --> 00:30:51,400
Speaker 3: much you have left. Maybe you have to go to

595
00:30:51,440 --> 00:30:54,520
Speaker 3: the ATM again because you run out of cash. So

596
00:30:54,560 --> 00:30:58,440
Speaker 3: psychologically that's a more difficult thing to do than swiping

597
00:30:58,440 --> 00:31:01,200
Speaker 3: a credit card. Right, studies of swiping a credit card

598
00:31:02,160 --> 00:31:06,200
Speaker 3: very little calculation that goes on. It does not hurt

599
00:31:06,320 --> 00:31:09,640
Speaker 3: or create much conflict. And there's a recent study that

600
00:31:10,080 --> 00:31:13,480
Speaker 3: just came out showing that paying by phone right, just

601
00:31:13,520 --> 00:31:16,959
Speaker 3: the tap to pay, actually feels good. People get like

602
00:31:17,040 --> 00:31:20,480
Speaker 3: a little feeling of pleasure from it, I guess the

603
00:31:20,520 --> 00:31:23,120
Speaker 3: same way front like you would getting you know, winning

604
00:31:23,160 --> 00:31:25,080
Speaker 3: a bonus on a video game or something like that.

605
00:31:25,520 --> 00:31:30,920
Speaker 3: So you know, that probably spells trouble for some folks

606
00:31:30,960 --> 00:31:35,200
Speaker 3: if you're actually deriving feelings of pleasure just by this

607
00:31:35,200 --> 00:31:36,479
Speaker 3: particular method of payment.

608
00:31:36,840 --> 00:31:41,000
Speaker 1: Yeah, that's scary. So so does that change how like

609
00:31:41,080 --> 00:31:43,880
Speaker 1: what how you pay? First off, for how you talk

610
00:31:44,000 --> 00:31:46,880
Speaker 1: to your students about paying for things. Because if there's

611
00:31:46,920 --> 00:31:48,640
Speaker 1: a simple pleasure to the tap to pay, and I

612
00:31:48,640 --> 00:31:50,440
Speaker 1: gotta say, it is nice.

613
00:31:50,280 --> 00:31:52,760
Speaker 3: And it's like crazy convenient, right, not having to remember

614
00:31:52,800 --> 00:31:53,560
Speaker 3: your wallet.

615
00:31:53,320 --> 00:31:54,479
Speaker 2: And yeah, yeah it is.

616
00:31:54,880 --> 00:31:56,600
Speaker 1: And sometimes yeah, if I'm like, if I'm going for

617
00:31:56,640 --> 00:31:58,000
Speaker 1: a run and don't have my wallet, like and I

618
00:31:58,040 --> 00:32:00,280
Speaker 1: need I can I can pop in somewhere and use

619
00:32:00,280 --> 00:32:03,480
Speaker 1: my phone that's in my pocket, which is which is convenient,

620
00:32:03,520 --> 00:32:07,240
Speaker 1: But are convenience also costing us? And it seems like

621
00:32:07,280 --> 00:32:11,560
Speaker 1: maybe that added convenience is like a marketer or a

622
00:32:11,640 --> 00:32:12,840
Speaker 1: lenders dream.

623
00:32:13,040 --> 00:32:15,320
Speaker 3: Right, I mean they're watching these things, right, so they

624
00:32:16,120 --> 00:32:19,440
Speaker 3: if you're a marketer, you're gonna look at, okay, is

625
00:32:19,640 --> 00:32:23,520
Speaker 3: how people pay for things? Like are they making different

626
00:32:23,560 --> 00:32:27,640
Speaker 3: decisions based on this? Right? And so they're definitely gonna

627
00:32:27,640 --> 00:32:29,960
Speaker 3: ask that question, and they're definitely gonna see, oh wow,

628
00:32:30,000 --> 00:32:34,040
Speaker 3: through these methods, you know, you look at how when

629
00:32:34,120 --> 00:32:38,840
Speaker 3: people have downloaded a retailing app for the retailer, they

630
00:32:38,880 --> 00:32:41,920
Speaker 3: spend more than if they're in store or just buying

631
00:32:42,000 --> 00:32:48,160
Speaker 3: through traditional web browser. So for people who offer credit,

632
00:32:48,960 --> 00:32:51,760
Speaker 3: they're gonna look at the branding of cards, right, the

633
00:32:51,800 --> 00:32:54,400
Speaker 3: method of cards is that a digital card or you know,

634
00:32:54,440 --> 00:32:57,120
Speaker 3: in all of these things, and so they're gonna they're

635
00:32:57,120 --> 00:32:59,000
Speaker 3: gonna have some sense of what gets some of the

636
00:32:59,000 --> 00:32:59,600
Speaker 3: best return.

637
00:33:00,280 --> 00:33:02,240
Speaker 1: Buy now, pay later is the perfect example of this

638
00:33:02,320 --> 00:33:04,800
Speaker 1: right where it's like a new way to pay and

639
00:33:04,920 --> 00:33:07,040
Speaker 1: you would think as a business model it doesn't really

640
00:33:07,080 --> 00:33:09,880
Speaker 1: make that much sense. And as an individual, the only

641
00:33:09,880 --> 00:33:12,320
Speaker 1: way it makes sense is because it allows me to

642
00:33:12,320 --> 00:33:14,640
Speaker 1: get the thing I want in the most painless way

643
00:33:15,000 --> 00:33:19,160
Speaker 1: without actually having to pay upfront. And the studies do

644
00:33:19,200 --> 00:33:21,600
Speaker 1: seem to point to the fact that when people buy

645
00:33:21,640 --> 00:33:24,640
Speaker 1: things using buy now, pay later at checkout, their carts

646
00:33:24,640 --> 00:33:28,920
Speaker 1: are bigger, which is why the big retailers are like, sure,

647
00:33:29,000 --> 00:33:31,560
Speaker 1: come on, we'll take by now pay later on our site.

648
00:33:31,720 --> 00:33:34,400
Speaker 1: And it's just because they make more sales.

649
00:33:34,480 --> 00:33:38,240
Speaker 3: Yeah, they're just optimizing, right for revenue for sure. Yeah.

650
00:33:38,400 --> 00:33:40,640
Speaker 3: I mean something else that plays in a mental account

651
00:33:40,640 --> 00:33:46,080
Speaker 3: of accounting and what you were talking about. If you

652
00:33:46,160 --> 00:33:48,920
Speaker 3: look at things like tax refunds. Okay, so the week

653
00:33:48,920 --> 00:33:50,880
Speaker 3: before the Super Bowl is where you sell the most TVs,

654
00:33:51,600 --> 00:33:54,280
Speaker 3: But one of the big times is and you're gonna

655
00:33:54,280 --> 00:33:57,440
Speaker 3: see lots of ads in April and May for TVs

656
00:33:57,520 --> 00:34:01,000
Speaker 3: is because of tax refunds. Right now, we all look

657
00:34:01,040 --> 00:34:03,760
Speaker 3: at our pay stub and we probably complained bitterly about

658
00:34:03,760 --> 00:34:06,400
Speaker 3: the taxes being taken out. I need that money to

659
00:34:06,400 --> 00:34:09,520
Speaker 3: pay bills now. But you know what, you may file

660
00:34:09,560 --> 00:34:11,680
Speaker 3: your taxes and then get that money back to use

661
00:34:11,680 --> 00:34:13,359
Speaker 3: it to pay bills. A lot of people don't, right,

662
00:34:13,360 --> 00:34:16,440
Speaker 3: because it feels like found money. It's like you've had

663
00:34:16,440 --> 00:34:18,680
Speaker 3: this windfall, and so they go out and buy TVs

664
00:34:18,719 --> 00:34:21,720
Speaker 3: and other things because the money feels different, right.

665
00:34:21,600 --> 00:34:23,480
Speaker 1: It's the way the money comes to you. It feels different,

666
00:34:23,560 --> 00:34:27,840
Speaker 1: feels different too. I'm curious about status and status whatever,

667
00:34:27,960 --> 00:34:31,040
Speaker 1: like when people you talk about kind of credit cards

668
00:34:31,040 --> 00:34:33,839
Speaker 1: and how certain branding of certain cards can make people

669
00:34:33,840 --> 00:34:35,439
Speaker 1: feel a certain way. I mean, there's a reason credit

670
00:34:35,480 --> 00:34:38,080
Speaker 1: our companies have even made some of the credit cards

671
00:34:38,120 --> 00:34:41,719
Speaker 1: like black and heavier, right, because then you feel like

672
00:34:41,760 --> 00:34:42,240
Speaker 1: a baller.

673
00:34:42,280 --> 00:34:42,919
Speaker 2: I guess it doesn't.

674
00:34:43,040 --> 00:34:44,680
Speaker 1: It doesn't feel the same way when you're tapping it

675
00:34:44,680 --> 00:34:46,919
Speaker 1: because it's in your Apple wallet versus when you pull

676
00:34:46,920 --> 00:34:48,960
Speaker 1: it out of pull it out of your actual wallet.

677
00:34:49,320 --> 00:34:53,160
Speaker 1: But how how do they these retailers, these marketers use

678
00:34:53,200 --> 00:34:55,520
Speaker 1: status games to kind of get at us and get

679
00:34:55,600 --> 00:34:59,640
Speaker 1: us into making financial decisions that might sound smart on

680
00:34:59,640 --> 00:35:02,640
Speaker 1: the front, but really are against our own best interests.

681
00:35:03,120 --> 00:35:03,319
Speaker 2: Right.

682
00:35:03,440 --> 00:35:07,080
Speaker 3: I mean when you mentioned status, you know, I think

683
00:35:07,080 --> 00:35:09,759
Speaker 3: of the American Express Gold card, which was a card.

684
00:35:09,840 --> 00:35:12,440
Speaker 3: That was when it came out in the fifties. I

685
00:35:12,480 --> 00:35:15,319
Speaker 3: want to say it was legitimately targeted towards people with,

686
00:35:15,560 --> 00:35:19,200
Speaker 3: you know, very high level incomes. But because of that,

687
00:35:19,280 --> 00:35:22,399
Speaker 3: it quickly became a status symbol and everyone wanted one.

688
00:35:24,040 --> 00:35:27,600
Speaker 3: And then after a while, other credit card offerers would

689
00:35:27,600 --> 00:35:32,680
Speaker 3: start it, would issue cards with these status branding platinum, diamond, whatever,

690
00:35:33,840 --> 00:35:37,600
Speaker 3: and they What studies have shown is people of lower

691
00:35:37,600 --> 00:35:41,080
Speaker 3: incomes when they have these status branded cards, they use

692
00:35:41,160 --> 00:35:43,759
Speaker 3: them more, and they use them more specifically in like

693
00:35:45,480 --> 00:35:48,160
Speaker 3: publicly visible ways. People can see them using the card,

694
00:35:48,160 --> 00:35:50,520
Speaker 3: then they want to use it more. Right now, as

695
00:35:50,520 --> 00:35:53,239
Speaker 3: a marketer, you're probably just thinking, well, I'm just here

696
00:35:53,280 --> 00:35:57,080
Speaker 3: to get the most business possible. But this is something

697
00:35:57,160 --> 00:36:01,279
Speaker 3: that is you know, once you've seen the behavior, you

698
00:36:01,400 --> 00:36:07,000
Speaker 3: know that this particular branding is getting lower income consumers

699
00:36:07,080 --> 00:36:08,080
Speaker 3: into hot water.

700
00:36:08,239 --> 00:36:08,640
Speaker 2: Yeah.

701
00:36:08,840 --> 00:36:13,319
Speaker 1: Well, luxury goods have kind of a similar element too, Right.

702
00:36:13,400 --> 00:36:18,319
Speaker 1: It's where the branding or even if it's not and

703
00:36:18,360 --> 00:36:21,960
Speaker 1: sometimes they are superior products, but sometimes they're not. And

704
00:36:22,000 --> 00:36:25,799
Speaker 1: it's literally just signaling and we're spending money that we

705
00:36:26,000 --> 00:36:30,640
Speaker 1: don't necessarily have to signal to people that we are,

706
00:36:31,040 --> 00:36:33,000
Speaker 1: whether it's the car you drive, or the shirts you

707
00:36:33,040 --> 00:36:36,759
Speaker 1: wear or the handbag you carry, like that we are

708
00:36:36,880 --> 00:36:40,280
Speaker 1: somebody or are trying to be to be somebody, maybe

709
00:36:40,480 --> 00:36:42,200
Speaker 1: is a better way to put it, right.

710
00:36:42,160 --> 00:36:44,279
Speaker 3: Yeah, I mean, and it goes back to I mean

711
00:36:44,320 --> 00:36:47,799
Speaker 3: when we're in caves, right, I mean, if you think

712
00:36:47,840 --> 00:36:52,400
Speaker 3: of cave people, you don't think of being socially conscious.

713
00:36:52,440 --> 00:36:55,080
Speaker 3: But the truth is these were people who had to

714
00:36:55,360 --> 00:37:00,000
Speaker 3: band together to not get eaten by dinosaurs, to find food,

715
00:37:00,000 --> 00:37:02,640
Speaker 3: and all of these things. So the group dynamics quickly

716
00:37:02,680 --> 00:37:07,440
Speaker 3: would confer status onto people, but back then probably mostly

717
00:37:07,480 --> 00:37:12,200
Speaker 3: based on physical stature, strength. Yeah, and to that person

718
00:37:12,960 --> 00:37:15,440
Speaker 3: resources would flow, right, So maybe you don't have to

719
00:37:15,440 --> 00:37:17,319
Speaker 3: go out and pick or kill your own food like

720
00:37:17,320 --> 00:37:20,960
Speaker 3: people are bringing it to you. Well, in today's age,

721
00:37:21,360 --> 00:37:24,759
Speaker 3: you know, money is behind all of these signals of

722
00:37:24,760 --> 00:37:29,080
Speaker 3: status that we want to that we want to demonstrate

723
00:37:29,120 --> 00:37:33,520
Speaker 3: to people. So we take on similar behaviors to achieve

724
00:37:33,560 --> 00:37:36,880
Speaker 3: status with others, whether it's you know, the things we

725
00:37:36,960 --> 00:37:41,120
Speaker 3: own or just doing things that are conspicuous signs of

726
00:37:41,200 --> 00:37:42,080
Speaker 3: status or wealth.

727
00:37:42,360 --> 00:37:44,879
Speaker 1: We've all heard you get what you pay for, and

728
00:37:45,120 --> 00:37:48,600
Speaker 1: sometimes that's true. Right, I have fallen victim to the

729
00:37:48,640 --> 00:37:50,799
Speaker 1: deal mentality, it's like, oh, yeah, I think it's the

730
00:37:50,840 --> 00:37:54,880
Speaker 1: best price possible, and you know, the quality quality be damned.

731
00:37:54,920 --> 00:37:58,160
Speaker 1: I just don't care that much because this is I'm

732
00:37:58,200 --> 00:38:01,920
Speaker 1: all about paying the least amount. But how do we

733
00:38:02,280 --> 00:38:06,600
Speaker 1: maybe determine as when we're being marketed to, Hey, this

734
00:38:06,640 --> 00:38:09,279
Speaker 1: thing is superior, this is the thing you want. There

735
00:38:09,360 --> 00:38:11,799
Speaker 1: is some truth to that on occasion the quality might

736
00:38:11,840 --> 00:38:12,920
Speaker 1: be superior.

737
00:38:13,000 --> 00:38:13,879
Speaker 2: How do we know.

738
00:38:14,280 --> 00:38:15,799
Speaker 1: And do our own due diligence. I just think of

739
00:38:15,840 --> 00:38:18,320
Speaker 1: something like consumer reports when buying a car, right, that

740
00:38:18,719 --> 00:38:21,480
Speaker 1: would help you say, well, the branding says this, but

741
00:38:21,600 --> 00:38:24,400
Speaker 1: the data says this. But how in the moment do

742
00:38:24,440 --> 00:38:28,640
Speaker 1: we make better decisions about the purchases we make when

743
00:38:28,640 --> 00:38:31,239
Speaker 1: we're being told a story that might might or might

744
00:38:31,280 --> 00:38:31,800
Speaker 1: not be true.

745
00:38:32,400 --> 00:38:35,400
Speaker 3: Right, It's tough. I mean, we typically have to find

746
00:38:35,440 --> 00:38:38,279
Speaker 3: something that we can trust, whether it's consumer reports or

747
00:38:38,320 --> 00:38:41,840
Speaker 3: a good friend's advice or things like that. When it

748
00:38:41,880 --> 00:38:47,920
Speaker 3: comes to debt, there's you know, there's the advertised upfront

749
00:38:48,480 --> 00:38:52,120
Speaker 3: price or interest rate, but usually in the fine print

750
00:38:52,120 --> 00:38:55,439
Speaker 3: there's a lot of other things like escalation causes or

751
00:38:56,120 --> 00:39:00,720
Speaker 3: a clause excuse me, or you know, find dance charges

752
00:39:00,719 --> 00:39:03,880
Speaker 3: that come on, if you don't behave in certain ways.

753
00:39:04,680 --> 00:39:09,400
Speaker 3: So what's really difficult is and because math and finance

754
00:39:09,440 --> 00:39:12,480
Speaker 3: makes people anxious, so it's hard for them to embrace

755
00:39:13,360 --> 00:39:16,160
Speaker 3: diving into the details. Is yeah, you have to read

756
00:39:16,200 --> 00:39:20,880
Speaker 3: the fine print. If you have a friend who works

757
00:39:20,920 --> 00:39:25,680
Speaker 3: in finance, obviously that would be great too, because financial

758
00:39:25,719 --> 00:39:29,800
Speaker 3: literacy is important. But you know, if you're not doing

759
00:39:29,840 --> 00:39:35,120
Speaker 3: it all the time, is dealing with credit and finance,

760
00:39:35,800 --> 00:39:39,279
Speaker 3: that knowledge does fade over time, So you need to

761
00:39:39,320 --> 00:39:41,680
Speaker 3: reacquaint yourself with these things. And you also need to

762
00:39:41,800 --> 00:39:44,440
Speaker 3: if you have a friend who is an expert who's

763
00:39:44,560 --> 00:39:46,840
Speaker 3: living and breathing that stuff, get help.

764
00:39:46,920 --> 00:39:48,439
Speaker 1: Maybe crowds or I don't know. How do you feel

765
00:39:48,440 --> 00:39:50,320
Speaker 1: about Reddit as a place? I feel like Reddit is

766
00:39:50,360 --> 00:39:52,520
Speaker 1: a decent place to turn, although I did see recently

767
00:39:52,560 --> 00:39:56,920
Speaker 1: that there's the companies paying for people to post on Reddit,

768
00:39:57,520 --> 00:40:02,080
Speaker 1: because that's the last bastion of kind of company free

769
00:40:02,880 --> 00:40:05,960
Speaker 1: advice that people have where it's literally just humans talking

770
00:40:06,000 --> 00:40:09,560
Speaker 1: about the product or the service or whatever and there's

771
00:40:09,600 --> 00:40:12,280
Speaker 1: no company intrusion or advertising. But it seems like companies

772
00:40:12,320 --> 00:40:15,120
Speaker 1: are trying to infiltrate that, almost like what happened with

773
00:40:15,280 --> 00:40:18,399
Speaker 1: Amazon reviews back in the day, or interviews on Yelp

774
00:40:18,520 --> 00:40:22,080
Speaker 1: reviews get people being paying people for certain positive reviews

775
00:40:22,120 --> 00:40:23,080
Speaker 1: to make yourself look better.

776
00:40:23,640 --> 00:40:27,360
Speaker 3: Yeah, no, I mean they absolutely are right, and same

777
00:40:27,400 --> 00:40:29,120
Speaker 3: with I don't know if you go on korra. Core

778
00:40:29,280 --> 00:40:31,800
Speaker 3: is bigger outside the US than inside, which is supposed

779
00:40:31,800 --> 00:40:35,600
Speaker 3: to be the expert only kind of version of Reddit.

780
00:40:36,320 --> 00:40:38,160
Speaker 3: But you know, there's still plenty of things that are

781
00:40:38,160 --> 00:40:40,920
Speaker 3: being posted on there that are clearly promotional or clearly

782
00:40:40,920 --> 00:40:41,640
Speaker 3: have an agenda.

783
00:40:41,920 --> 00:40:42,120
Speaker 2: Yeah.

784
00:40:42,120 --> 00:40:44,440
Speaker 3: I mean, if someone's too overtly commercial, I think you

785
00:40:44,480 --> 00:40:49,319
Speaker 3: can tell that you know it's a biased message. But

786
00:40:51,000 --> 00:40:55,520
Speaker 3: the trouble with Reddit is not that there aren't knowledgeable

787
00:40:55,600 --> 00:40:59,239
Speaker 3: and well intentioned people on there. I think it's there

788
00:40:59,239 --> 00:41:02,960
Speaker 3: are so many people of varying levels of expertise or

789
00:41:03,000 --> 00:41:05,839
Speaker 3: intent that it's hard to tell who you know, who

790
00:41:05,840 --> 00:41:07,920
Speaker 3: are the knowledgeable, well intentioned people, and who are the

791
00:41:07,920 --> 00:41:09,960
Speaker 3: people who are just trying to get me to, you know,

792
00:41:10,000 --> 00:41:10,600
Speaker 3: buy something.

793
00:41:10,880 --> 00:41:13,239
Speaker 1: I think that's a great point. I've got a few

794
00:41:13,239 --> 00:41:15,160
Speaker 1: more questions to get to with you with you, John,

795
00:41:15,160 --> 00:41:17,960
Speaker 1: including kind of AI's impact on all this. It seems

796
00:41:17,960 --> 00:41:20,239
Speaker 1: to be mudding the waters even more. Well, we'll get

797
00:41:20,280 --> 00:41:22,960
Speaker 1: to a few more questions with Professor John Dinsmore. Right

798
00:41:23,000 --> 00:41:33,000
Speaker 1: after this, I we're back still talking with Professor John

799
00:41:33,080 --> 00:41:37,160
Speaker 1: Dinsmore about debt and marketing, the nefarious forces that get

800
00:41:37,239 --> 00:41:39,480
Speaker 1: us to sign up for products that might not be

801
00:41:39,960 --> 00:41:43,399
Speaker 1: the best for us. I want to talk about AI

802
00:41:43,440 --> 00:41:46,080
Speaker 1: in just a second, John, But the when we're talking

803
00:41:46,120 --> 00:41:49,080
Speaker 1: about the Internet, the Internet, it certainly seemed like, oh,

804
00:41:49,080 --> 00:41:53,600
Speaker 1: this is going to demystify pricing, This is going to

805
00:41:53,600 --> 00:41:55,719
Speaker 1: take some power out of the marketer's hands. I can

806
00:41:55,719 --> 00:42:00,399
Speaker 1: comparison shop in an instant, but that has a quite

807
00:42:00,440 --> 00:42:03,120
Speaker 1: been the case, Like how have companies been able to

808
00:42:03,840 --> 00:42:06,279
Speaker 1: actually see almost make it more difficult for us to

809
00:42:06,360 --> 00:42:08,400
Speaker 1: make good decisions in the Internet age?

810
00:42:08,800 --> 00:42:11,120
Speaker 3: Right? I mean when it comes to AI, I mean

811
00:42:11,360 --> 00:42:13,919
Speaker 3: what I'm saying today may may not apply tomorrow because

812
00:42:13,920 --> 00:42:16,799
Speaker 3: it is moving so fast. But I mean, as someone

813
00:42:16,840 --> 00:42:22,000
Speaker 3: who's a heavy user of these platforms. Yes, AI is

814
00:42:22,080 --> 00:42:24,719
Speaker 3: different than what we know is traditional computing. But it

815
00:42:24,880 --> 00:42:27,480
Speaker 3: seems to as a form of intelligence, struggle with the

816
00:42:27,480 --> 00:42:30,319
Speaker 3: same thing that we struggle with as humans, which is

817
00:42:30,719 --> 00:42:34,239
Speaker 3: what sources should we believe? You know, what is valid information?

818
00:42:34,640 --> 00:42:37,960
Speaker 3: You know? So all that I've seen really on AI.

819
00:42:38,800 --> 00:42:41,160
Speaker 3: It is, and you can see in like analytics on

820
00:42:41,200 --> 00:42:44,920
Speaker 3: websites that you know, chatchypt and similar services are replacing

821
00:42:44,960 --> 00:42:48,640
Speaker 3: Google when you're looking at referral sources for traffic. Right

822
00:42:48,719 --> 00:42:54,839
Speaker 3: so search traffic is slowly evolving into AI traffic. So

823
00:42:55,000 --> 00:42:58,720
Speaker 3: AI is going to be really powerful for that reason.

824
00:42:58,800 --> 00:43:04,040
Speaker 3: But at the same time it struggles with as far

825
00:43:04,080 --> 00:43:09,880
Speaker 3: as I've seen, separating good information from misinformation. And then

826
00:43:10,040 --> 00:43:14,400
Speaker 3: it's also for phishing, scammers and other forms of cybercrime.

827
00:43:14,640 --> 00:43:17,880
Speaker 3: It's been this major blessing for people who want to

828
00:43:17,880 --> 00:43:21,520
Speaker 3: misrepresent themselves as being from your bank or being a

829
00:43:21,600 --> 00:43:24,760
Speaker 3: lender and things like that. So I mean, right now,

830
00:43:24,840 --> 00:43:27,640
Speaker 3: I haven't seen it as a big force for good,

831
00:43:29,080 --> 00:43:32,640
Speaker 3: but you know, hopefully as the platforms get better and

832
00:43:32,680 --> 00:43:36,160
Speaker 3: we get more sophisticated about using those platforms, hopefully it

833
00:43:36,160 --> 00:43:37,440
Speaker 3: will become that.

834
00:43:38,120 --> 00:43:41,040
Speaker 1: I'm not against dynamic pricing for the most part, although

835
00:43:41,080 --> 00:43:44,319
Speaker 1: it's gotten more sophisticated. But it is interesting that you know,

836
00:43:44,360 --> 00:43:47,360
Speaker 1: you might try to buy an airplane ticket in the

837
00:43:47,400 --> 00:43:50,120
Speaker 1: morning and then you go you're like, ah, I'll do

838
00:43:50,160 --> 00:43:51,880
Speaker 1: it later, and then you go back the afternoon and

839
00:43:51,920 --> 00:43:53,759
Speaker 1: you're like, it's one hundred and fifty dollars more for

840
00:43:53,800 --> 00:43:56,040
Speaker 1: the same flight, Like, how did that change so quickly

841
00:43:56,080 --> 00:43:59,000
Speaker 1: and by that much? But that's that's dynamic pricing, and

842
00:43:59,160 --> 00:44:01,719
Speaker 1: guess what the price might be cheaper again the next day.

843
00:44:01,960 --> 00:44:04,080
Speaker 1: So you have to be a thoughtful consumer. But it

844
00:44:04,200 --> 00:44:07,440
Speaker 1: seems like with artificial intelligence, those decisions are going to

845
00:44:07,440 --> 00:44:12,080
Speaker 1: become even more fraught and maybe more individually targeted. So

846
00:44:12,120 --> 00:44:15,920
Speaker 1: how do you think people can or should protect themselves

847
00:44:16,160 --> 00:44:21,040
Speaker 1: when it comes to marketing of products where pricing is

848
00:44:21,080 --> 00:44:22,799
Speaker 1: even more ambiguous than it is now.

849
00:44:23,360 --> 00:44:25,640
Speaker 3: I think you have to And it's tough, right because

850
00:44:25,640 --> 00:44:30,440
Speaker 3: I know people have accused, like Amazon serving different prices

851
00:44:30,480 --> 00:44:32,600
Speaker 3: to people and other online retailers because they have a

852
00:44:32,640 --> 00:44:35,799
Speaker 3: search history, and they'll say, okay, well Joel, you know

853
00:44:35,880 --> 00:44:38,520
Speaker 3: he's this big deal podcaster, so we think he'll pay

854
00:44:38,640 --> 00:44:42,120
Speaker 3: twenty percent more, right, So how do you protect against that?

855
00:44:42,640 --> 00:44:45,400
Speaker 3: I mean, I think again it goes into the amount

856
00:44:45,400 --> 00:44:47,960
Speaker 3: of effort you're willing to do and all the different

857
00:44:47,960 --> 00:44:50,920
Speaker 3: sources you're willing to check, you know, on these things.

858
00:44:51,239 --> 00:44:54,600
Speaker 3: You know, airlines insist that they aren't jamming you when

859
00:44:54,640 --> 00:44:56,279
Speaker 3: you search for an airfare and you come back and

860
00:44:56,320 --> 00:44:58,600
Speaker 3: it's gone up a little bit, which not only makes

861
00:44:58,600 --> 00:45:00,439
Speaker 3: them more money, but it's going to increase your sense

862
00:45:00,440 --> 00:45:01,800
Speaker 3: of urgency to buy that ticket.

863
00:45:01,840 --> 00:45:03,000
Speaker 2: Oh man, prices are going up.

864
00:45:03,000 --> 00:45:05,400
Speaker 3: Better get it now, right, right? But I mean, so

865
00:45:05,600 --> 00:45:08,080
Speaker 3: it is again it comes in you check multiple sources

866
00:45:08,120 --> 00:45:12,359
Speaker 3: for everything, you know. I remember the CEO of Wendy's

867
00:45:12,920 --> 00:45:15,520
Speaker 3: randomly in an earnings call, said well, we're going to

868
00:45:15,600 --> 00:45:20,680
Speaker 3: play with dynamic pricing, and people lost their minds, right,

869
00:45:21,840 --> 00:45:25,319
Speaker 3: And I think mostly because you know, it's food, right,

870
00:45:25,360 --> 00:45:27,600
Speaker 3: and this is not you know, this isn't going to

871
00:45:27,680 --> 00:45:30,880
Speaker 3: some you know, Michelin start whatever. It's These are working

872
00:45:30,920 --> 00:45:33,120
Speaker 3: people who go to Wendy's for food and now they're

873
00:45:33,120 --> 00:45:35,520
Speaker 3: going to have to pay, however much more because they

874
00:45:35,600 --> 00:45:39,359
Speaker 3: want to eat lunch at lunch time. So I think

875
00:45:39,400 --> 00:45:41,520
Speaker 3: that's part of it too, which is being able to

876
00:45:41,640 --> 00:45:43,600
Speaker 3: just you know, go across the street to someone who's

877
00:45:43,640 --> 00:45:45,560
Speaker 3: not doing that, doing that.

878
00:45:45,560 --> 00:45:48,000
Speaker 2: That's a good point. Be willing, be willing to walk.

879
00:45:48,280 --> 00:45:51,279
Speaker 1: And I think that's part of what's changing some of

880
00:45:51,320 --> 00:45:53,600
Speaker 1: the policies that these companies have is they're getting the

881
00:45:53,600 --> 00:45:59,040
Speaker 1: pushback and they're realizing that it's it's unpopular with the masses, right,

882
00:45:59,120 --> 00:45:59,840
Speaker 1: I don't.

883
00:45:59,640 --> 00:46:01,719
Speaker 3: Know if you. One of the most famous examples of

884
00:46:01,800 --> 00:46:07,560
Speaker 3: dynamic pricing, Coca Cola experimented with vending machines that would

885
00:46:07,640 --> 00:46:11,040
Speaker 3: charge more for sodas the hotter it was outside, and

886
00:46:11,120 --> 00:46:13,840
Speaker 3: people were furious. I mean they quickly pulled the plug

887
00:46:13,840 --> 00:46:17,960
Speaker 3: on it because people got so angry. Yeah so, yeah, yeah,

888
00:46:18,000 --> 00:46:21,160
Speaker 3: so it's you know, your business is valuable, don't be

889
00:46:21,160 --> 00:46:23,520
Speaker 3: afraid to take it elsewhere if someone is misbehaving.

890
00:46:24,040 --> 00:46:26,919
Speaker 1: Do you think individuals should be responsible for their own

891
00:46:26,960 --> 00:46:31,040
Speaker 1: behavioral shortcomings, like, hey, you signed on the dotted line,

892
00:46:31,480 --> 00:46:34,960
Speaker 1: you pay the price. You should have done more due diligence,

893
00:46:35,480 --> 00:46:38,200
Speaker 1: or do you think that the government should step in

894
00:46:38,239 --> 00:46:41,600
Speaker 1: to eliminate some of the more vile marketing approaches. I'm

895
00:46:41,920 --> 00:46:45,280
Speaker 1: even thinking of recent attempts to rein in chunk fees.

896
00:46:46,040 --> 00:46:48,920
Speaker 1: There's different people who think different things, and in some ways,

897
00:46:48,920 --> 00:46:51,920
Speaker 1: like one person's junk fee is another person's opportunity to

898
00:46:52,000 --> 00:46:54,799
Speaker 1: save the way part of it. You know, sometimes the

899
00:46:54,800 --> 00:46:58,120
Speaker 1: airlines annoy me by how they charge for everything, But

900
00:46:58,480 --> 00:47:02,560
Speaker 1: I also can fly frontier with a backpack and get

901
00:47:02,640 --> 00:47:05,319
Speaker 1: the place I want to go way cheaper than I

902
00:47:05,360 --> 00:47:08,400
Speaker 1: could if everything was all included. Uh so, yeah, what

903
00:47:08,520 --> 00:47:11,640
Speaker 1: what's your what's your take on individual choice versus government

904
00:47:11,680 --> 00:47:12,640
Speaker 1: involvement on this stuff?

905
00:47:14,280 --> 00:47:16,480
Speaker 3: You know, there's there's a balance in there, and of

906
00:47:16,520 --> 00:47:19,640
Speaker 3: course probably most people think there is a balance, but

907
00:47:19,680 --> 00:47:22,280
Speaker 3: we're all probably going to disagree on you know, where

908
00:47:22,719 --> 00:47:26,200
Speaker 3: where that line is. So like alluding to things like

909
00:47:26,280 --> 00:47:33,160
Speaker 3: baggage fees, I mean actually there was what on tickets,

910
00:47:33,200 --> 00:47:36,760
Speaker 3: There was an executive order that took effect recently where

911
00:47:37,040 --> 00:47:42,240
Speaker 3: now you're seeing all in prices for tickets for concert tickets. Yeah,

912
00:47:42,560 --> 00:47:48,000
Speaker 3: which I really like as a consumer because once you

913
00:47:48,000 --> 00:47:50,640
Speaker 3: commit to buying something and then you start having these

914
00:47:50,680 --> 00:47:53,800
Speaker 3: fees come in, small enough fees to where they're making

915
00:47:54,719 --> 00:47:56,680
Speaker 3: good money off of you, but not so big that

916
00:47:56,760 --> 00:48:01,000
Speaker 3: you walk away. You know, I would I personally think

917
00:48:01,080 --> 00:48:04,280
Speaker 3: it's more ethical to have all of the fees up front,

918
00:48:05,480 --> 00:48:08,800
Speaker 3: because studies have shown that, you know, the further people

919
00:48:08,840 --> 00:48:12,040
Speaker 3: go through the process, the less likely they're willing to

920
00:48:12,080 --> 00:48:14,759
Speaker 3: walk away, you know, regardless of how many fees come in.

921
00:48:14,800 --> 00:48:17,640
Speaker 3: There was a study about you know, baggage fees and airlines,

922
00:48:18,160 --> 00:48:20,680
Speaker 3: and they gave consumers a chance to say, hey, look

923
00:48:22,239 --> 00:48:24,680
Speaker 3: this other option here that you passed up actually is

924
00:48:24,719 --> 00:48:27,520
Speaker 3: going to have a lower total cost, and people refuse

925
00:48:27,560 --> 00:48:30,319
Speaker 3: to consider it just because I think they were kind

926
00:48:30,320 --> 00:48:34,160
Speaker 3: of resigned to getting jammed by the airlines. But I

927
00:48:34,160 --> 00:48:36,200
Speaker 3: think also they were just they were committed. Yeah, they

928
00:48:36,200 --> 00:48:38,360
Speaker 3: didn't want to dedicate any more energy to it.

929
00:48:38,440 --> 00:48:39,040
Speaker 2: No, that makes sense.

930
00:48:39,120 --> 00:48:41,839
Speaker 1: Yeah, there's a line somewhere, and at some point, you know,

931
00:48:41,960 --> 00:48:46,879
Speaker 1: selling snake oil becomes not okay, like so and people

932
00:48:46,880 --> 00:48:49,560
Speaker 1: get held accountable for that, or the burnie mateofs of

933
00:48:49,600 --> 00:48:55,040
Speaker 1: this world selling investment products that aren't real, like, there's

934
00:48:55,080 --> 00:48:57,080
Speaker 1: a problem there, and we hold those people accountable.

935
00:48:57,080 --> 00:48:57,560
Speaker 2: So you're right.

936
00:48:57,800 --> 00:49:01,400
Speaker 1: I'm curious too, as someone who's dug into these sorts

937
00:49:01,440 --> 00:49:05,919
Speaker 1: of debt marketing practices. How how has that changed your

938
00:49:05,920 --> 00:49:07,880
Speaker 1: approach to debt in your life? And how do you

939
00:49:07,920 --> 00:49:11,680
Speaker 1: think differently when you're considering taking out a mortgage or

940
00:49:11,680 --> 00:49:15,839
Speaker 1: considering a credit card in your life and how you

941
00:49:15,960 --> 00:49:16,879
Speaker 1: use that credit card.

942
00:49:17,080 --> 00:49:18,560
Speaker 2: How has all the.

943
00:49:18,440 --> 00:49:21,680
Speaker 1: Research you've done and everything that's in that incredible brain

944
00:49:21,719 --> 00:49:24,840
Speaker 1: of your sean, how's that? How's that impacted your actions?

945
00:49:24,960 --> 00:49:26,960
Speaker 3: Oh? Wow, it's a shine of my apples here. So

946
00:49:27,120 --> 00:49:32,240
Speaker 3: the uh, I think what I do differently it's probably

947
00:49:32,239 --> 00:49:35,200
Speaker 3: two things. Well one, you know, the first house that

948
00:49:35,239 --> 00:49:37,880
Speaker 3: my wife and I bought together. You know, we were

949
00:49:37,880 --> 00:49:42,840
Speaker 3: referred to a mortgage broker through my boss, and the

950
00:49:42,880 --> 00:49:45,560
Speaker 3: guy uh had us all set up. We were all

951
00:49:45,600 --> 00:49:47,480
Speaker 3: ready to close on the house, and about a week

952
00:49:47,520 --> 00:49:50,680
Speaker 3: before closing, he calls up and says, well, there's a problem.

953
00:49:50,920 --> 00:49:52,759
Speaker 3: You know, you can't get a regular loan. We have

954
00:49:52,800 --> 00:49:54,319
Speaker 3: to do what you call like a no doc loan

955
00:49:54,360 --> 00:49:56,800
Speaker 3: if you're familiar with those, with a much higher interest

956
00:49:56,840 --> 00:49:59,719
Speaker 3: rate and all these things. Well, you know, we needed

957
00:49:59,719 --> 00:50:01,560
Speaker 3: a place to live and felt like, you know, at

958
00:50:01,560 --> 00:50:05,759
Speaker 3: this point, we couldn't walk from it, so we took

959
00:50:05,800 --> 00:50:08,200
Speaker 3: on the bad mortgage and refinanced a couple of years later,

960
00:50:08,800 --> 00:50:13,080
Speaker 3: actually ended up getting a check from the state because

961
00:50:13,080 --> 00:50:15,240
Speaker 3: some of the fees they were charging were actually against

962
00:50:15,239 --> 00:50:18,920
Speaker 3: the law. Wow. But you know, some years later we

963
00:50:18,920 --> 00:50:25,640
Speaker 3: were refinancing our house here in Ohio and you know,

964
00:50:25,920 --> 00:50:28,520
Speaker 3: went to lending Tree or a site like it, and

965
00:50:28,600 --> 00:50:30,640
Speaker 3: a lot of those folks it's really about getting to

966
00:50:30,680 --> 00:50:33,120
Speaker 3: someone first, get him to commit first, and then you

967
00:50:33,120 --> 00:50:35,279
Speaker 3: know you're going to get the business. So this guy

968
00:50:35,320 --> 00:50:37,399
Speaker 3: got to us, we said, you know what sounds good

969
00:50:37,400 --> 00:50:39,839
Speaker 3: we're going to do it, and then he would say, oh,

970
00:50:39,920 --> 00:50:43,640
Speaker 3: there's there's this thing about your background, so there's going

971
00:50:43,719 --> 00:50:45,480
Speaker 3: to be an extra charge. It's just going to be

972
00:50:45,520 --> 00:50:47,759
Speaker 3: like fifteen hundred bucks. Don't worry, we'll roll it into

973
00:50:47,800 --> 00:50:50,640
Speaker 3: the loan, right, you know, regardless of the fact that

974
00:50:51,400 --> 00:50:53,680
Speaker 3: you're paying the fifteen hundred bucks at one point or another.

975
00:50:53,719 --> 00:50:55,399
Speaker 3: So if you're not paying it up front here, you're

976
00:50:55,800 --> 00:50:57,759
Speaker 3: well probably paying interest on it in the loan, and

977
00:50:57,800 --> 00:51:00,200
Speaker 3: then you're also probably paying it, you know when you

978
00:51:00,280 --> 00:51:02,320
Speaker 3: sell your house, taking it out of the proceeds.

979
00:51:02,360 --> 00:51:04,600
Speaker 1: But then initial quote that sounded great one and so great.

980
00:51:04,800 --> 00:51:06,520
Speaker 1: Rather he baked in some other fees.

981
00:51:06,719 --> 00:51:09,799
Speaker 3: And this time we you know, we walked very easily, right,

982
00:51:11,280 --> 00:51:14,880
Speaker 3: because it's easy to think sometimes you don't have options,

983
00:51:16,000 --> 00:51:17,719
Speaker 3: or that you know, we're too far along now or

984
00:51:17,719 --> 00:51:20,960
Speaker 3: that sort of thing. But usually if you start to walk,

985
00:51:21,360 --> 00:51:24,719
Speaker 3: either that person will come into line with what you're

986
00:51:24,760 --> 00:51:27,440
Speaker 3: looking for or I mean, in our case, you know,

987
00:51:27,480 --> 00:51:31,239
Speaker 3: we found an even better deal. So you know, that's

988
00:51:31,280 --> 00:51:33,680
Speaker 3: the biggest thing. I think shopping around and being willing

989
00:51:33,719 --> 00:51:34,560
Speaker 3: to walk if you have to.

990
00:51:35,000 --> 00:51:38,560
Speaker 1: Okay, love it pressor John Dinsmore, thank you so much

991
00:51:38,600 --> 00:51:40,759
Speaker 1: for joining me work in how do money listeners find

992
00:51:40,760 --> 00:51:43,040
Speaker 1: out more about you and about your new book.

993
00:51:44,160 --> 00:51:46,680
Speaker 3: So the book is the marketing of debt, How they

994
00:51:46,680 --> 00:51:48,759
Speaker 3: get you. So you can find it on any kind

995
00:51:48,760 --> 00:51:55,279
Speaker 3: of online outlet, or you can go to my website

996
00:51:55,400 --> 00:52:00,439
Speaker 3: Dinsmore Research and you'll find links there as well as

997
00:52:00,560 --> 00:52:03,120
Speaker 3: I guess if you need anyone needs on market research consultant,

998
00:52:03,160 --> 00:52:06,160
Speaker 3: you know you can find information there too. But thanks

999
00:52:06,239 --> 00:52:06,799
Speaker 3: very much, Jo.

1000
00:52:07,280 --> 00:52:11,319
Speaker 1: Of course, yeah, thanks for joining me. Appreciate it. Oh man,

1001
00:52:11,360 --> 00:52:14,480
Speaker 1: all right, that was a great combo with Professor John

1002
00:52:14,640 --> 00:52:17,480
Speaker 1: Dinsmore and just in Lightning. Just in Lightning, I think

1003
00:52:17,560 --> 00:52:20,960
Speaker 1: so so many of us tend to think that we

1004
00:52:21,160 --> 00:52:27,960
Speaker 1: are we're not as susceptible as others to the traps

1005
00:52:28,160 --> 00:52:32,919
Speaker 1: of marketing and specifically marketing in the form of debt

1006
00:52:32,960 --> 00:52:36,439
Speaker 1: products that are tossed our way. And we're just in

1007
00:52:36,480 --> 00:52:39,720
Speaker 1: a modern environment where it feels like we're being pelted.

1008
00:52:39,760 --> 00:52:43,200
Speaker 1: We're being assaulted from all sides, and at some point

1009
00:52:43,320 --> 00:52:47,440
Speaker 1: we relent whether it is just a purchase, whether it's

1010
00:52:47,440 --> 00:52:49,799
Speaker 1: a retailer coming after us, or whether it's you know,

1011
00:52:49,840 --> 00:52:53,720
Speaker 1: more nefarious types of debt what Professor John called booby traps,

1012
00:52:53,719 --> 00:52:57,080
Speaker 1: even for that were aimed at low income consumers. There

1013
00:52:57,120 --> 00:53:00,560
Speaker 1: are small booby traps that are bigger booby traps out

1014
00:53:00,560 --> 00:53:04,359
Speaker 1: there for us, and if we are not careful, we

1015
00:53:04,400 --> 00:53:10,160
Speaker 1: can fall prey. And so there is you know, I

1016
00:53:10,200 --> 00:53:13,040
Speaker 1: don't want to weigh in necessarily on the political what

1017
00:53:13,160 --> 00:53:15,680
Speaker 1: I think makes sense from political perspective, although maybe we

1018
00:53:15,680 --> 00:53:20,359
Speaker 1: talked about that on Friday flights on occasion, but there's

1019
00:53:20,400 --> 00:53:24,400
Speaker 1: little ability we have in the political sphere. What we

1020
00:53:24,480 --> 00:53:29,440
Speaker 1: have the ability is over our own personal actions and

1021
00:53:29,840 --> 00:53:31,800
Speaker 1: how much time we shop around and what sort of

1022
00:53:31,840 --> 00:53:35,319
Speaker 1: buffer periods we include in our lives so that we're

1023
00:53:35,320 --> 00:53:37,759
Speaker 1: not knee jerk making decisions that are not in our

1024
00:53:37,760 --> 00:53:40,400
Speaker 1: best interest. And this makes me think, I think. My

1025
00:53:40,440 --> 00:53:44,520
Speaker 1: big takeaway from this conversation was when John was talking

1026
00:53:44,600 --> 00:53:48,040
Speaker 1: about being overly optimistic and how that leads us to

1027
00:53:48,120 --> 00:53:51,759
Speaker 1: being less cautious. And the first thing that popped into

1028
00:53:51,800 --> 00:53:54,680
Speaker 1: my mind is one of my favorite quotes from Morgan Housel,

1029
00:53:54,719 --> 00:53:57,760
Speaker 1: which is to save like a pessimist and to invest

1030
00:53:57,800 --> 00:54:01,360
Speaker 1: like an optimist. The reason we save like pessimists is

1031
00:54:01,400 --> 00:54:04,600
Speaker 1: because you don't know what's coming down the bike, and

1032
00:54:05,520 --> 00:54:08,080
Speaker 1: you know, hopefully life is better tomorrow for you than

1033
00:54:08,120 --> 00:54:10,920
Speaker 1: it is today, but none of us are guaranteed that.

1034
00:54:11,440 --> 00:54:14,560
Speaker 1: And I think the same is true here if we

1035
00:54:14,600 --> 00:54:18,600
Speaker 1: are looking at our future through rose colored glasses. Just

1036
00:54:19,200 --> 00:54:23,000
Speaker 1: even talking to my parents about how they made some

1037
00:54:23,239 --> 00:54:25,080
Speaker 1: decisions when it came to buying a house or buying

1038
00:54:25,120 --> 00:54:27,120
Speaker 1: a car, and some of the advice they were given, well,

1039
00:54:27,120 --> 00:54:29,960
Speaker 1: it's like, well, you're going to get that promotion eventually,

1040
00:54:30,400 --> 00:54:32,680
Speaker 1: so yeah, you can afford to stretch your budget just

1041
00:54:32,719 --> 00:54:36,160
Speaker 1: a little bit. And it's those those little things that

1042
00:54:36,320 --> 00:54:39,520
Speaker 1: we do that maybe or yeah, that fifteen hundred dollars

1043
00:54:39,520 --> 00:54:42,200
Speaker 1: extra fee that John referenced, Sure attack that end.

1044
00:54:42,160 --> 00:54:43,160
Speaker 2: Of the loan. It'll be okay.

1045
00:54:43,400 --> 00:54:46,240
Speaker 1: And it seems like small potatoes because over the life alone,

1046
00:54:46,280 --> 00:54:48,600
Speaker 1: it's you know, four dollars a month on your payment.

1047
00:54:49,080 --> 00:54:53,040
Speaker 1: But it's when we when we're not paying strict attention

1048
00:54:53,120 --> 00:54:55,839
Speaker 1: to those things and we allow for people to pull

1049
00:54:55,880 --> 00:54:59,479
Speaker 1: the wool over our eyes or we are just yeah,

1050
00:54:59,560 --> 00:55:02,440
Speaker 1: two po positive, you know, in our thoughts about what

1051
00:55:02,480 --> 00:55:04,799
Speaker 1: the future holds for us, it can cause us to

1052
00:55:05,400 --> 00:55:09,280
Speaker 1: take on financial products, to take on debt that becomes

1053
00:55:09,320 --> 00:55:12,319
Speaker 1: like a millstone around our next especially especially if things

1054
00:55:12,360 --> 00:55:14,319
Speaker 1: in our life do worsen. Boy, it's nice if you

1055
00:55:14,320 --> 00:55:17,640
Speaker 1: do get the promotion and then the mortgage feels like

1056
00:55:18,160 --> 00:55:21,040
Speaker 1: pretty reasonable, but what if you don't, and actually what

1057
00:55:21,080 --> 00:55:24,480
Speaker 1: if you get laid off? And so going through I

1058
00:55:24,520 --> 00:55:28,759
Speaker 1: think not letting those feelings act as data, which is

1059
00:55:28,800 --> 00:55:31,239
Speaker 1: I think another thing he said, like that we have

1060
00:55:31,320 --> 00:55:33,520
Speaker 1: feelings and there's no way around it, but don't let

1061
00:55:33,600 --> 00:55:35,840
Speaker 1: it act as this data to help us make a decision.

1062
00:55:35,880 --> 00:55:37,920
Speaker 1: And in fact, we want to kind of step away

1063
00:55:37,960 --> 00:55:41,640
Speaker 1: from those in the moment feelings at least to a

1064
00:55:41,640 --> 00:55:46,480
Speaker 1: certain extent, so that we can make wise decisions. So yeah,

1065
00:55:46,480 --> 00:55:50,279
Speaker 1: I hope this episode was helpful, and please do pick

1066
00:55:50,360 --> 00:55:53,040
Speaker 1: up John's book as a professor, tell him before we

1067
00:55:53,040 --> 00:55:56,200
Speaker 1: started that his book to me feels it felt very approachable,

1068
00:55:56,280 --> 00:55:58,640
Speaker 1: even though it was written by an academic. So and

1069
00:55:58,680 --> 00:56:00,439
Speaker 1: there's a lot of if you're a behavior your old

1070
00:56:00,440 --> 00:56:03,680
Speaker 1: finance enthusiast, there's a lot of really interesting stuff in

1071
00:56:03,719 --> 00:56:07,320
Speaker 1: there as well. So thanks as always for listening to

1072
00:56:07,360 --> 00:56:09,760
Speaker 1: the show. Hope to see you back here on Friday

1073
00:56:09,800 --> 00:56:13,839
Speaker 1: for a fresh Friday Flight episode. Until next time, Best

1074
00:56:13,880 --> 00:56:14,359
Speaker 1: Friend Out