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welcome to the best interest podcast
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where we believe Benjamin Franklin's
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advice that an investment in knowledge
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pays the best interest both in finances
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and in your life every episode teaches
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you personal finance and investing in
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simple terms now here's your host Jesse
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Kramer hello and welcome to episode 97
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of the best interest podcast my name is
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Jesse Kramer later in today's episode Dr
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Brad Clans is going to be joining us you
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might have heard of Brad he's a pretty
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big celebrity in the personal finance
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financial planning World cuz he is both
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a doctor of psychology and a cfp a real
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expert a kind of cross doain expert when
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it comes to financial psychology the way
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that human brains think about money and
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what that means for financial planning
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what that means for Applied behavioral
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finance and he's also very um
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intentionally entertaining a little
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provocative at times and he's certainly
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going to get you thinking today and
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we're going to talk about some
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interesting Financial Planning and
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Behavioral finan things but first as
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always we'll do a quick review of the
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week this one comes from Matthew PE who
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gave us a festar review on Apple
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podcasts and Matthew said wonderful I
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just found this great podcast I'm a
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lover of most investing in personal
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finance content I've listened to a lot
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of it and I have my own podcast I can
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spot a good one when I find it this is
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one of those podcasts well Matthew thank
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you very much for those kind words as
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always you can write into me Matthew
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Jesse bestin interest. blog shoot me an
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email and we'll get you hooked up with
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one of these super soft best interest
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t-shirts and while you're at it Matthew
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go ahead and shoot me a link of your
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podcast I'm interested to tune in and
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see what you're all about so listeners
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today before we get to Brad Clans Dr
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Brad Clans I want to read a couple
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articles from the best interest blog
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that have to do with this very common
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important intersection between our
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brains and our finances the first
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article the first topic is called great
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investors little secret because
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Outsiders all over the world if you're
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an outsider you might think you know how
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something works you know the type the
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armchair experts they're giving their
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opinions at the Thanksgiving table but
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what studies have found is that quite
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often the least experienced are the most
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confident in their knowledge right this
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is the Dunning Krueger effect if you're
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not familiar with it which often shows
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that confidence builds very very rapidly
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when expertise increases only a little
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bit and then eventually most of us we
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start to learn so much that we realize
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oh I know a lot less than I thought I
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did your confidence starts to come back
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to Earth as it probably should and then
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only later as you truly become an expert
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does your confidence start to increase
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again on a particular subject a lot of
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us in all manner of subjects are stuck
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at the point where we know a tiny little
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bit and yet somehow we're very confident
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that we must know a lot about that
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subject anyway the whole idea for this
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point today what I'm trying to make is
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that insiders when you're an Insider in
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something then you actually know how
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something works and that as the Muse
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says that makes all the difference so
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take basketball for example Outsiders
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think that college basketball Talent is
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a very good indicator of NBA success
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whereas insiders they know that that's
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kind of wrong you know the NBA is about
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size and strength and speed and if you
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can't shoot in the NBA to some extent at
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least when you're young enough that's
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not that big of a problem they'll teach
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you how to shoot but they can't teach
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someone how to be seven feet tall they
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can't really teach someone how to have a
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44in vertical leap there's a reason that
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the 5'1 inch tall shooting guard from
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Pepperdine who set College records for
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three-point shooting basically goes
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undrafted into the NBA it's not because
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he wasn't good enough to break College
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records I mean he was obviously very
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good at that but at 5 foot1 he's
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probably too short too weak or too slow
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to really make it in the NBA now
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insiders know that's true and you just
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have to look at the NBA look at the
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rosters to realize oh not everybody who
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is a division one basketball star
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translates over into the NBA a for
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example Giannis anmo apologies Giannis
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if I got your name wrong I think I kind
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of got it right uh he's arguably a top
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three a top five a top 10 player in the
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NBA right now he's put on 50 pounds of
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muscle since entering the NBA it's not
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to help out his jump shot it's it's so
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that he can outmuscle the strong
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competition they couldn't teach him to
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be whatever he is you know 6 foot 11
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with gangly long arms and he can jump
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out of the gym he had that naturally he
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had to learn how to shoot he had to put
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on some muscle and now he's one of the
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best players on planet Earth we can
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apply the same Insider Outsider thought
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to golf non-golfers assume that golf is
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just about smashing the ball 300 yards I
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would say weekend amateurs who they know
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enough to be dangerous they've heard
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this phrase before that you drive for
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show but you putt for dough meaning that
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driving is just showy and doesn't really
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matter hitting the ball long doesn't
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really matter it's putting around the
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green that truly matters and and they're
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kind of right but insiders know that the
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best golfers in the world they really
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just do it all at this point in the
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game's history the best golfers in the
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world are the ones who yes they drive it
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consistently 320 or 330 or 340 yards and
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then they hit their seven iron to 18
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feet and then they sink the hard birdie
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putts they really can do it all and of
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course poor assumptions poor Outsider
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assumptions they also plague the
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investing world one of the biggest
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misconceptions is that Outsiders think
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that investing is about intelligence and
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or secret now know right Warren Buffett
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is just smarter than everyone else those
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guys working on Wall Street they just
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know more than anyone else oh you don't
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know math well you're screwed there's no
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way you can be a good investor if you
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don't know math but insiders know that
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investing is much more about temperment
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we're going to use that word a lot today
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temperment and for what it's worth this
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misunderstanding this Outsider Insider
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understanding of intelligence versus
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temperament it's very understandable
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after all the most popular investing
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book of all time is the intelligent
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investor it's not the well-tempered
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investor it's the intelligent investor
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but one of the great ironies of that
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book of the book The intelligent
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investor is that its most famous
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chapters and quotes are all about
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temperament for example Benjamin Graham
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writes in the intelligent investor quote
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investing isn't about beating others at
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their game it's about controlling
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yourself at your game end quote the list
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goes on the biggest investors of all
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time whether it's Ben Graham or Warren
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Buffett or Howard marks or anyone else
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they all talk about temperament being
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more important than intelligence here's
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a quote from Warren Buffett investing is
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not a game where the guy with the 160 IQ
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beats the guy with 130 IQ once you have
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ordinary intelligence what you need is
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the temperament to control the urges
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that get other people into trouble in
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investing here's a quote from Howard
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marks I also think people who are
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inherently unemotional will have it much
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easier a lack of an emotionality is a
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gift in investing that is but perhaps
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not in other areas like marriage it's
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not my point that emotional people can't
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be good investors but it will require a
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great deal of self-awareness and
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self-restraint end quote from Howard
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marks and now here's one more quote from
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Annie Duke famous poker player but a lot
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of Poker paradigms they translate over
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into investing Annie Duke knows it and
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she writes about it in her books Annie
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writes and says even research
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communities of highly intelligent and
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well-meaning individuals can fall prey
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to confirmation bias as IQ is positively
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correlated with a number of reasons
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people find to support their own side in
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an argument end quote now when I
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originally wrote this article I think it
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was probably sometime in 2023 and if you
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don't recall 2022 was a pretty bad year
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A uniquely bad year in investing markets
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both stocks and bonds really performed
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poorly in 2022 and the fact of the
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matter is that to be a good investor you
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didn't have to predict that 2022 was
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going to be a bad year you can get away
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with just not knowing that upfront
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that's okay because instead good
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investing has to be the ability to be
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emotionally stable and to zoom out away
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from that specific year 2022 and to see
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the bigger picture good investing is the
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discipline to build a responsible
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portfolio and avoid any traps that force
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you to sell to survive you know your
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portfolio is so risky that when markets
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drop your portfolio tanks and you feel
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panicked and you feel like the only way
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to get away from that Panic is to sell
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that's selling to survive it's selling
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to appease that part of your lizard
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brain that that kicks in the flight or
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fight when your portfolio goes down you
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want to avoid that and the way you avoid
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that is by setting up a properly
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structured and risk mitigated portfolio
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upfront sure intelligence definitely
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doesn't hurt your investing outcomes at
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least in most cases Annie Duke might
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push against that quote a little bit but
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paradoxically the most important
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knowledge an investor can possess is
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meta knowledge it's knowing that
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knowledge has diminishing returns or as
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Buffett put it that investing is not a
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game where the guy with 160 IQ beats the
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guy with 130 IQ Panic selling is not a
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decision of intelligence it's a decision
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of temperament same with chasing the hot
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stock or the hot fund or dumping your
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college loan money into Tesla stock
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those are not decisions of intelligence
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those are decisions of temperament
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investing is about decision-making
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that's a good thing right we're all
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experienced decision makers in our lives
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we all know certain decisions are based
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on synthesizing evidence okay that might
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be intelligence but many decisions are
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based on gut feel or Behavioral biases
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or simple hormonal drives was that donut
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the intelligent thing to eat or was that
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a temperamental decision intelligence
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versus temperament is the difference
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between knowing the nutrition facts of
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every food versus implementing good
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eating habits as Annie Duke also said
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thinking in bets starts with recognizing
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that there are exactly two things that
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determine how our lives turn out thing
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number one is the quality of our
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decisions and thing number two is luck
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what determines Annie Duke's quality of
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ourc decisions well it's mostly
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temperament with a sprinkling of
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intelligence insiders know it's true and
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now you do too and now one more article
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before Brad joins us today where I talk
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about seven different ways that our
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brain can sabotage our money and I want
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to start with a quote uh it's a simple
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phrase It's the most significant outcome
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from the psychologist Barry schwarz's
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research as described in the very
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well-known book The Paradox of choice
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and the quote is less is more too much
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is stressful
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now Barry Schwarz said that and he
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continued on and he wrote while
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increased Choice allows us to achieve
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objectively better results it also leads
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to Greater anxiety indecision paralysis
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and dissatisfaction that right there is
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the Paradox of choice less is more too
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much choice is stressful now when
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applied to personal decision-making
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though schwarz's research is commonly
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called analysis paralysis it's the
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inability to make a decision due to
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overthinking it our own thoughts create
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too many choices in our heads we second
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guess ourselves we stall we stress we
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flail and too often we fail that
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analysis paralysis it creates four major
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problems in day-to-day life first it
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lowers performance on mentally straining
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tasks simply put our brains have limited
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working memory they call it just like a
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computer and if you use that working
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memory on overanalyzing you'll have less
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of it to use on more important tasks
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analysis paralysis also kills creativity
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when your brain is caught up in analysis
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your creative synaps they're less active
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analysis paralysis also saps willpower
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that's they call it decision fatigue our
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brains have finite willpower each and
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every day and if you use all of it while
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paralyzed on one decision you'll have
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nothing left for later decisions and
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ultimately analysis paralysis makes you
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unhappy it's the famous conundrum it's
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called the satisficer versus the
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maximizer conundrum satisficers they
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solve a problem until they're satisfied
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maximizers though they solve a problem
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until the solution is perfect at least
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perfect in their own eyes analysis
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paralysis is maximizing Behavior but
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study after study shows that satisficers
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are just happier they are simply happier
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in their lives analysis paralysis in
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other words it's a bad thing and it
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certainly creeps its way into personal
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finances I hear a new story what feels
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like every week it's a significant and
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common source of financial stress so
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here are six more common ways that I see
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analysis paralysis and personal finances
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and what you can do to avoid it the
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first way it's too much thought over too
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small of a purchase should you buy the
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$5 GIF peanut butter or the $4 Wegman
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store brand every decision big or small
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hurts your willpower for the rest of the
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day so don't waste that willpower on $1
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worth of peanut butter the second way
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that I see analysis paralysis is what's
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called opportunity paranoia or the
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preoccupation with determining
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everything's opportunity cost this is
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especially true no offense if you're out
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there in the fire Community this is
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especially true in the fire Community
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where the zealots tend to view every
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single facet of life through the lens of
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money and time on one hand I get it I I
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understand thinking of the finite
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resources of our life money and time and
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and thinking of things that way yes our
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actions have consequences we should
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think of opportunity costs but sometimes
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it's too much and it really is this
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opportunity paranoia where someone says
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well I I could spend $50 on dinner but
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if I invested that money I might have
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$600 in 50 years I mean yeah you could
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every decision today every sing single
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one every decision today has a painful
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opportunity cost in the future but
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skipping today's dinner and every single
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nice expense forever might make you the
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unhappiest person in the nursing home
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and the richest person in the graveyard
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okay this money you can't take it with
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you the third way that I see analysis
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paralysis affecting our our personal
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finances is the the need the desire to
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know everything before we jump in if you
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insist on knowing everything about
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budgeting investing taxes financial
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planning before you start your person
00:13:59
Finance Journey you'll stagnate on the
00:14:01
starting line forever zero progress
00:14:03
there's nothing wrong with a little
00:14:04
self-study certainly encourage a little
00:14:06
selfstudy a lot of you are listening
00:14:07
here for that cell study but you'll have
00:14:09
to admit eventually that you can't get
00:14:12
wet unless you jump in the pool so set a
00:14:14
deadline to take some action and then
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follow through number four on this list
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of analysis paralysis issues is picking
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stocks timing the market and other
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Pursuits of perfection inside of
00:14:24
investing it's so enticing for investors
00:14:27
like all people to seek out scarios
00:14:29
where they think to themselves o I'm
00:14:31
smarter than you or I'm smarter than the
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consensus I'm smarter than everyone else
00:14:34
out there I'm smarter than the market
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but time and again data shows that most
00:14:39
professionals aren't really smarter than
00:14:41
the market and what chance does an
00:14:43
amateur have so instead diversify your
00:14:45
portfolio Buy and Hold dollar cost
00:14:47
average and keep a long-term mindset
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number five on this list today comes
00:14:52
from the irar study the irar study quite
00:14:54
simply said that the more investment
00:14:56
choices inside of a 401k program the
00:14:59
less likely employees are to participate
00:15:01
in it more choices equals more analysis
00:15:04
and more paralysis it is the Paradox of
00:15:07
choice yikes so the lesson there is well
00:15:10
do your best to avoid scenarios with too
00:15:11
many choices and if you have any sort of
00:15:14
say on what goes on inside of a 401k
00:15:16
plan you should Lobby for fewer fund
00:15:18
choices make it simple just do 10
00:15:21
different Target date funds and leave it
00:15:22
at that the less is more inside of a
00:15:25
401k program it also probably keeps fees
00:15:28
down for what it's worth number six on
00:15:30
this list is that automation is key the
00:15:32
decision to automate right that one
00:15:34
decision upfront to automate it removes
00:15:37
aund decisions in the future whether
00:15:39
it's banking or investing or budgeting
00:15:41
or bill pay automate as much of it as
00:15:44
you can a stitch in time saves nine
00:15:46
there's another one of our favorite
00:15:47
quotes from Mr Benjamin Franklin himself
00:15:50
Founding Father of the best interest
00:15:52
blog and podcast and number seven on
00:15:54
this list making perfect the enemy of
00:15:56
good enough now my budgeting for example
00:15:59
it's rarely perfect I'll reconcile my
00:16:01
accounts and this is back in the day
00:16:02
when I was pretty hardcore about
00:16:04
budgeting I would still get to the end
00:16:06
of the month and I'd reconcile my
00:16:08
accounts and I'd realize that you know
00:16:10
$16.35 is quote unquote missing and the
00:16:13
balances don't line up now I could spend
00:16:16
30 minutes going back through every
00:16:17
single line item crosschecking with my
00:16:19
bank accounts and my PayPal and trying
00:16:21
to figure out where that missing
00:16:23
$16.35 is or I could chalk it up to
00:16:27
somewhere along the lines that month I
00:16:28
made a mistake F just add in a fake
00:16:31
$16.35 expense and go on my way knowing
00:16:35
that I got most of my multi thousand
00:16:38
monthly spending perfectly documented
00:16:40
it's okay right my time and my brain
00:16:42
power are worth more than chasing down
00:16:45
in that case a $16 line item mistake you
00:16:48
don't have to make perfect the enemy of
00:16:50
good enough now perhaps my favorite
00:16:52
quote from the book The Paradox of
00:16:54
choice is when asked about what they
00:16:56
regret most in the last 6 months most
00:16:58
people people tend to identify actions
00:17:00
that didn't meet expectations but when
00:17:02
asked about what they regret most when
00:17:04
they look back on their lives as a whole
00:17:06
people tend to identify failures to act
00:17:09
personal finance and investing you
00:17:10
listeners they can be cruel to you if
00:17:12
you fail to act so don't let analysis
00:17:15
paralysis get in your way here's a quick
00:17:17
ad and then we'll get back to the show
00:17:19
every week I send a quick free email to
00:17:22
thousands of readers that shares three
00:17:24
Simple Things One my new articles and
00:17:26
podcasts two the best Financial content
00:17:29
of the week from all over the Internet
00:17:32
and three a financial chart that
00:17:34
explains some important Concept in the
00:17:36
news that week it's a great primer to
00:17:38
boost your financial knowhow H but Jesse
00:17:41
I don't want another email well this
00:17:44
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00:17:46
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at bestter interest. blog again that's a
00:18:03
free no strings attached subscription at
00:18:05
bestter interest. blog and with that we
00:18:08
are going to welcome on Dr Bradley T
00:18:10
Clans onto the podcast he's a doctor of
00:18:12
psychology and a certified financial
00:18:14
planner cfp an expert in financial
00:18:17
psychology Financial Planning and
00:18:18
applied behavioral Finance Brad is an
00:18:21
associate professor of practice atraton
00:18:23
University Haider College of Business
00:18:25
he's the co-founder of the financial
00:18:26
psychology Institute and he's the
00:18:28
managing principle of Y ymw advisers and
00:18:31
really the list goes on from there Brad
00:18:33
is the real deal an expert in both
00:18:35
psychology and financial planning and
00:18:37
his list of accolades shows that so
00:18:39
without further Adie let's welcome on Dr
00:18:41
Brad Clans here onto the best interest
00:18:48
podcast Brad thank you for joining us
00:18:50
today on the best interest podcast and
00:18:52
let's start with a a good foundational
00:18:54
question I think for you what exactly is
00:18:57
a money script well a money script is a
00:19:00
belief that we have about money now we
00:19:02
use the word script because many of
00:19:05
these beliefs that we have about money
00:19:07
probably most of them actually were
00:19:09
written by somebody else so it's almost
00:19:11
like you're an actor in a play and
00:19:13
you're up on stage you're living your
00:19:14
life around money and you have these
00:19:16
lines popping out of your mouth because
00:19:18
of these beliefs clanking around in your
00:19:21
subconscious about how money works and
00:19:24
what what rich people are and what poor
00:19:26
people are and what money should be used
00:19:28
for and should it be saved should it be
00:19:30
spent and what's so fascinating as a
00:19:32
psychologist is we've been able to link
00:19:34
these beliefs quite often to parents and
00:19:37
grandparents and even great-grandparents
00:19:39
we tend to Cluster around people who
00:19:40
have similar beliefs so you'll find
00:19:43
lower income people versus middle class
00:19:45
versus ultra wealthy they all have very
00:19:47
different beliefs around money different
00:19:49
Traditions different understandings it's
00:19:50
almost like understanding it like it's
00:19:52
it's almost like going to another
00:19:53
culture or another country different
00:19:55
language different um habits religions
00:19:58
have clusters of beliefs so now the big
00:20:01
issue though is most of us are totally
00:20:02
unaware that we have them so if you're
00:20:04
hearing this right now I want you to
00:20:05
start thinking about it like what are
00:20:07
your beliefs around money because the
00:20:09
problem that we have is that many of
00:20:11
those beliefs are only partially true
00:20:13
and so sometimes we can limit our
00:20:15
success or sometimes we get into
00:20:16
financial trouble because we don't know
00:20:18
the entire truth around money we hear
00:20:21
things about say like work ethic we
00:20:23
we'll hear story sometimes where
00:20:24
someone's like well my my grandfather
00:20:26
worked his tail off and so my father
00:20:27
worked his tail off and I work my tail
00:20:29
off so there are some things like that
00:20:30
that certainly seem like they're ped
00:20:32
generationally the first part of my
00:20:34
question for you Brad is I mean are
00:20:35
these money scripts similar to that in
00:20:37
some way in your research is there a
00:20:39
similar mechanism behind the scenes and
00:20:40
then to make it a bit of a two-parter
00:20:42
question are we really talking about
00:20:44
like an environmental and behavior is
00:20:46
this like learned behaviorally or like
00:20:48
it might be a weird question but this
00:20:49
isn't genetic is it I actually think
00:20:52
some of it is genetic like we have
00:20:54
traumas that get passed down to us that
00:20:57
we didn't experience directly ourselves
00:20:59
and I'll give you an example really
00:21:01
quickly I was a big do-it-yourselfer
00:21:03
when it came to investing because part
00:21:05
of the culture of low income that's a
00:21:08
really tough one by the way for people
00:21:10
to break out of is like oh I got to do
00:21:11
it all myself my aunt did everyone's
00:21:13
taxes you know my dad grew up on a farm
00:21:16
the tractor broke you fixed the tractor
00:21:18
that's what you do and God forbid
00:21:19
trusting these lawyers or these
00:21:23
financial advisor people like we didn't
00:21:24
know any of those people and so it's
00:21:27
like it was like for us so I I call it
00:21:30
do-it-yourself itis because i' I suffer
00:21:32
with it and I always sort of make the
00:21:34
analogy like I I know you have pliers in
00:21:36
your garage you know but if your tooth
00:21:38
starts hurting maybe you should
00:21:39
Outsource your dentist you know it's
00:21:41
like think the same thing is true when
00:21:42
it comes to people who are trying to
00:21:44
climb the socioeconomic ladder and it's
00:21:46
like Outsource your taxes you know
00:21:49
unless you're unless you're reading the
00:21:50
top seven tax journals which I wouldn't
00:21:53
necessarily recommend and you're up to
00:21:54
date on all the all what that's
00:21:56
happening every year it's like look just
00:21:58
out Source the taxes like spend more
00:22:00
time doing the stuff you know how to do
00:22:01
to make money don't get stuck with that
00:22:04
sort of mindset to your first part of
00:22:05
the question with regard to work you
00:22:07
know we're getting Behavior we we're
00:22:09
seeing behaviors modeled for us but
00:22:12
there's a belief behind it so the belief
00:22:14
there is like perhaps that you need to
00:22:15
work harder I remember sitting in a room
00:22:17
with my dad and I felt like I was a
00:22:19
workaholic I was working 70 hours a week
00:22:21
and then my wife was there my future
00:22:23
wife she's my girlfriend at the time and
00:22:24
my dad started talking about how he
00:22:26
works 100 hours a week and he feels
00:22:28
feels lazy compared to my grandpa and
00:22:30
I'm I'm sitting there and then she's
00:22:31
like elbowing me I'm like damn like he's
00:22:33
working 100 hours a week and feels lazy
00:22:35
no wonder and then it turns out this is
00:22:37
the crazy part it turns out that my
00:22:39
grandpa's dad was a lazy good for
00:22:42
nothing and so basically my grandpa
00:22:44
spent his entire life trying to please
00:22:46
his mother by being the hard hard worker
00:22:48
and then my dad's doing it then I'm
00:22:49
doing it I'm I'm feeling so guilty that
00:22:51
I can't leave work to take care of
00:22:54
myself to work out or anything and it's
00:22:56
like wait a second this is because my
00:22:58
great grandpa was lazy are you kidding
00:23:01
me like this is like clouding my entire
00:23:03
experience of life that's an example of
00:23:05
a script interesting now in that case it
00:23:08
sounds like your great grandpa as you
00:23:11
said was a lazy good for nothing and so
00:23:13
your grandpa really decided to flip that
00:23:15
script 100% on its like 180 a full
00:23:18
change on its head maybe he even went to
00:23:20
the Other Extreme is that a common
00:23:22
pattern that we see too where it's
00:23:24
either I could see in some cases where
00:23:25
someone says well for Generations you
00:23:28
know I'm cursed to be a lazy good for
00:23:30
nothing too and you follow the same
00:23:32
script I could also see cases where it
00:23:33
just flipped almost to an extreme on its
00:23:36
head is is that something common you see
00:23:38
I me do people ever find an in between
00:23:40
balance point the goal usually is some
00:23:43
sort of in between balance point what we
00:23:45
have found in Psychology is sort of
00:23:46
being flexible in your thinking and you
00:23:49
know approaching some level of balance
00:23:51
this tends to be healthier for you you
00:23:53
live longer you tend to be happier we
00:23:55
talk about like work work life balance
00:23:57
again being on that Edge but so I I
00:24:00
think that's important but what we do
00:24:02
see and it's similar like alcoholism is
00:24:04
probably a similar way to look at it too
00:24:07
in terms of when somebody has like a
00:24:09
really sort of intense emotional
00:24:11
relationship with something you know so
00:24:13
it could be like I'm not going to be a
00:24:15
lazy good for nothing that's really
00:24:17
intense it's like dude just you know get
00:24:19
a job and do some work what are you
00:24:20
talking about there's a lot of energy
00:24:21
there usually what we see is that energy
00:24:24
gets passed down so for kids of
00:24:26
Alcoholics quite often they'll either
00:24:29
start to develop a problem with alcohol
00:24:30
themselves or you might see I I call it
00:24:33
a massive pendulum swing and some and
00:24:35
usually it's dysfunctional it's like
00:24:37
you're you have an extreme relationship
00:24:38
with alcohol now it's like I'll never
00:24:40
touch this up and anyone who does I have
00:24:42
all these judgments towards them and
00:24:43
it's like well I mean it's it's actually
00:24:45
possible to have a drink once a week and
00:24:47
not be in trouble and the same thing is
00:24:50
is true with money and so you'll quite
00:24:51
often see patterns in families where
00:24:53
somebody's like really really afraid to
00:24:55
invest and then the next Generation
00:24:57
comes along he's like I don't want to be
00:24:59
broke like you people and then all of a
00:25:00
sudden they're quote investing by buying
00:25:02
the latest like monkey nft or something
00:25:05
you know and you're like whoa dude
00:25:06
that's not investing that's speculation
00:25:09
the irony too is that they'll lose all
00:25:10
their money doing that and then they
00:25:12
switch right back to oh my grandpa's
00:25:13
right yep can't trust investing the
00:25:16
script comes true there's some high
00:25:17
drama for you what about I'm thinking
00:25:19
about age right now I've got a a
00:25:21
four-month-old daughter at home and it
00:25:24
is a little scary to sometimes think
00:25:26
about what is she looking at you know is
00:25:28
she observing my wife and I right now
00:25:31
and learning stuff from us whether it's
00:25:33
language or behavior or how to treat one
00:25:35
another like those kind of things and
00:25:36
and you wonder what's rubbing off on her
00:25:38
and what's not from the money script
00:25:40
point of view for any parents who are
00:25:42
listening right now do you have any
00:25:44
understanding of kind of the the ages at
00:25:46
which this stuff really starts to impact
00:25:48
our children and what we can do to make
00:25:50
sure that we don't necessarily curse our
00:25:52
kids with our bad money scripts my
00:25:54
general thought on that is that it's
00:25:56
influencing them way before you think it
00:25:59
is so just be paranoid about that a
00:26:00
little bit you know it's like when is it
00:26:02
well it's probably before you thought it
00:26:04
was so I think it's real early and part
00:26:06
of it is sort of energetically too like
00:26:08
what is your energy around money are you
00:26:09
like super anxious about it do you get
00:26:12
do you snap with your partner and spouse
00:26:13
about it is a source of tension and
00:26:15
anxiety like kids pick up on that big
00:26:17
time they're wired to pick up on that
00:26:19
you know I mean that's part of our
00:26:20
survival as as a species it's like being
00:26:22
really acutely aware of these big people
00:26:24
around us and what they're mad about and
00:26:26
what they're anxious about so I think we
00:26:28
pass down the emotion around money and I
00:26:31
think what people need to do is be more
00:26:33
strategic and conscious about passing
00:26:36
along the messages and so what people
00:26:38
tend to do when they're stressed about
00:26:40
money is they don't want to talk about
00:26:41
it they want to avoid it and so what is
00:26:43
the message you're giving to your kid
00:26:45
it's like oh money's too scary to talk
00:26:46
about or it's not important enough to
00:26:48
talk about and so the big mistake I
00:26:50
think parents make is by not talking
00:26:52
about it because really what you want to
00:26:53
do is pass along your values another big
00:26:56
mistake I see is people just give kids
00:26:58
an allowance and then they get all mad
00:27:00
or upset or disappointed that the kid
00:27:02
just blows all the money it's like look
00:27:04
they don't even have a prefrontal cortex
00:27:06
yet of course they're going to blow the
00:27:07
money you have to put strings attached
00:27:09
to it you have to teach them that part
00:27:11
of this money that comes into your life
00:27:13
you should be saving it and investing it
00:27:15
part of it you should be spending it and
00:27:16
enjoying life I mean think about what
00:27:18
your values are if charitable donations
00:27:20
are your value are you modeling that are
00:27:22
you talking about that are you showing
00:27:23
them that so using those types of
00:27:26
opportunities to really pass down the
00:27:27
mindset you want your kids to have her
00:27:28
own money I got one more script question
00:27:31
because I'm very curious about this but
00:27:33
then I I do want to dive into some of
00:27:34
these harsh truths the 21 harsh truths
00:27:37
that that you talk about in in your new
00:27:38
book start thinking rich but before we
00:27:41
get to the harsh truths okay one more
00:27:43
money script question which is for
00:27:44
anyone listening right now who says to
00:27:46
themselves like ah I I I could
00:27:47
understand what Brad's talking about
00:27:49
maybe I've seen it in someone else in my
00:27:51
life but it doesn't affect me can you
00:27:53
just run through some of the more common
00:27:55
money scripts that really do a lot of
00:27:58
people and then maybe just dive in and
00:28:00
describe those scripts with a little bit
00:28:01
of detail sure we have studied over
00:28:04
100,000 people around their beliefs
00:28:06
around money and we've identified four
00:28:08
common patterns you can call them sort
00:28:10
of like personalities around money and
00:28:12
what we typically find is people are
00:28:14
typically have elevations on the scale
00:28:16
you know so they score higher in in more
00:28:18
than one area quite often three of them
00:28:20
are bad for you and one of them is good
00:28:22
for you okay and so I'll go through them
00:28:23
really quickly the first one is called
00:28:25
money avoidance and this is where you
00:28:27
have a negative associ iation with money
00:28:28
and rich people like rich people are
00:28:30
greedy money corrupts you're a better
00:28:32
person if you don't have money probably
00:28:34
not a big surprise that's not great for
00:28:35
your income your net worth and a whole
00:28:38
host of self-destructive Financial
00:28:40
behaviors ensue from that it's pretty
00:28:42
common in people who grow up poor like I
00:28:44
grew up poor I grew up low-income I
00:28:45
didn't know any rich people I I I was
00:28:47
around a bunch of good hardworking
00:28:49
people we didn't have money so it's like
00:28:51
what are those people doing well they're
00:28:52
clearly cheating destructive Behavior
00:28:54
pattern you need to change the second
00:28:56
one that we found is what we call Money
00:28:57
Focus or money worship and this is where
00:29:00
this is sort of the average American
00:29:01
where we think that more stuff is going
00:29:04
to make us happier you know it's going
00:29:05
to solve our problems and then we get
00:29:07
into this overspending pattern of
00:29:09
consumerism and materialism you know
00:29:12
made worse by social media you know
00:29:14
showing you everything that you're
00:29:15
missing out on the third category is
00:29:17
what we call Money status and and this
00:29:19
is the keeping up with the Joneses
00:29:21
effect essentially and I I get really
00:29:24
loud and upset about this one because
00:29:27
social media just pushes this on all
00:29:29
young people it's like yeah people
00:29:30
leaning up against a Ferrari and
00:29:32
Lamborghini or flexing luxury watches
00:29:34
and all this well the bottom line is
00:29:35
that's not what rich people do so these
00:29:37
are these outward displays of wealth and
00:29:39
and typically people are doing it couple
00:29:42
Flags should go off they probably have
00:29:43
low income low net worth High credit
00:29:45
card debt maybe they have high income
00:29:46
but low net worth and they probably grew
00:29:48
up in a lower socioeconomic family
00:29:50
system and they're trying to show the
00:29:51
world they now have value and Status
00:29:53
terrible for your Financial Health the
00:29:55
fourth one is what most wealthy people
00:29:58
have in terms of their beliefs it's
00:30:00
called money vigilance so there's a
00:30:01
sense of you know it's important to save
00:30:04
if people ask me how much money I made I
00:30:06
I tell them I make less than I do so
00:30:07
they're they're more secretive around
00:30:09
what they have they're not flashy
00:30:10
typically but there's some anxiety too
00:30:12
it's like it's important to say for any
00:30:14
day or I'd be a nervous wreck if I
00:30:15
didn't have money saved for an emergency
00:30:17
so there's there's an element of concern
00:30:19
about the future I mean as I say it it's
00:30:22
like duh you know psychologists are
00:30:23
renowned for like discovering things
00:30:25
that everyone already knows but if
00:30:27
you're like if you're not focused and
00:30:29
worried about the future you're not
00:30:30
going to do what it takes right now to
00:30:32
to save for that Financial Freedom as
00:30:34
you described them I feel like I can
00:30:36
relate to all four of those money
00:30:37
scripts in various ways and those was
00:30:38
the elevations is that what you called
00:30:40
it yeah like a higher score in that
00:30:41
scale right I grew up in a a relatively
00:30:44
economically depressed area in rural
00:30:46
Upstate New York and it was funny I mean
00:30:48
salt of the earth people and just
00:30:50
wonderful people but I'm not sure I knew
00:30:53
anyone who say you know inflation
00:30:55
adjusted did I know anyone who was
00:30:57
earning $200 $50,000 a year or more as a
00:30:59
family I I don't know it sure didn't
00:31:02
seem like it maybe there were a couple
00:31:03
who were money Vigilant and they just
00:31:05
kind of kept it close to the chest but
00:31:07
there was certainly some thought I mean
00:31:08
I remember thinking growing up or just
00:31:10
knowing people growing up where this is
00:31:12
idea of look around you you got honest
00:31:14
hardworking people and no one's that
00:31:16
much better for it so how could anyone
00:31:18
out there have a billion dollars like
00:31:20
there must be a fundamental problem here
00:31:23
there's certainly some if you want to
00:31:24
call it like a tax rate conversation to
00:31:26
have what that's different but the whole
00:31:27
a that without knowing anything just
00:31:30
Rich equals bad I mean that that can't
00:31:33
be a helpful conclusion to draw of the
00:31:36
world it it just paints a false picture
00:31:37
that probably locks you into a some
00:31:39
negative long-term outcomes Yeah It's
00:31:42
tricky because there all these money
00:31:43
scripts have elements of truth right
00:31:45
it's like are there some rich bad people
00:31:47
oh yeah really bad you know and the
00:31:50
problem is like it's only part of the
00:31:52
story there's some really good ones you
00:31:53
know rich people like cured po polio you
00:31:56
I mean there there's some recent things
00:31:58
happening and and so it's the idea with
00:32:00
money scripts is to identify what you
00:32:02
have first of all like are you getting
00:32:04
what you want out of life you know then
00:32:05
don't change your beliefs everything's
00:32:06
perfect if you're not then maybe
00:32:08
examining those because typically you
00:32:10
have to sort of rescript it and make it
00:32:12
more accurate in more situations that's
00:32:15
the bottom line like will more stuff
00:32:18
make you happier no but would having
00:32:20
additional money enhance your life yes
00:32:23
probably if you use it right if you
00:32:25
spend it right so the idea is to not get
00:32:27
rigidly attached to thinking you got you
00:32:29
have it all figured out and a lot of
00:32:30
research has been done on this too like
00:32:32
the most successful people the
00:32:33
wealthiest people tend to be more
00:32:34
open-minded right more like is there a
00:32:37
better way for me to think about this is
00:32:38
there another way for me to look at this
00:32:39
and it's sort of on that that mindset
00:32:41
allows you to grow in every area of your
00:32:43
life here's a quick ad and then we'll
00:32:46
get back to the show a few of you
00:32:48
occasionally inquire about two different
00:32:50
topics that are actually related the
00:32:52
first type of question seeks out details
00:32:54
about my professional life and the
00:32:56
wealth management firm that I work for
00:32:57
or here in Rochester New York the second
00:33:00
type of question involves the best
00:33:01
interest which operates with no
00:33:03
advertising no pushy sales no pay walls
00:33:06
and the question is how can the best
00:33:07
interest stay afloat well to answer both
00:33:10
of those questions I want to point you
00:33:12
to episode 78 of the best interest
00:33:15
podcast I intentionally recorded episode
00:33:18
78 to shine light on those topics and
00:33:20
inform you how you can actually help the
00:33:22
best interest if you're so inclined so
00:33:25
if you've ever been curious about the
00:33:27
business of the best interest please go
00:33:29
listen or download episode 78 and let me
00:33:32
know what you think let's change gears
00:33:34
tell us a little bit about this new book
00:33:36
now you've now written many books you
00:33:38
probably tell us exactly how many books
00:33:39
but you're putting out a new book soon
00:33:41
start thinking rich and I'd love to
00:33:43
learn a little bit more about how this
00:33:44
project kind of got rolling and then we
00:33:47
can dive into some of the harsh truths
00:33:48
that you talk about in the
00:33:50
book yeah so I I've written books
00:33:53
textbooks I've got a bunch of I think
00:33:55
about 100 universities training
00:33:57
financial advisor right now are are
00:33:58
talking about money scripts and and the
00:34:00
research around understanding people's
00:34:01
psychology around money so I I do
00:34:03
educate people there I work with ultra
00:34:06
wealthy people too as an adviser I do
00:34:08
all that but I I'll be honest too like
00:34:10
my passion though really kind of goes
00:34:12
down to where I came from and I strive
00:34:15
to be the mentor for people I wish I had
00:34:19
when I was growing up lower income
00:34:21
broken home having no idea what's going
00:34:23
on made all the mistakes you can
00:34:25
possibly make I started to make a lot of
00:34:27
social media cont content so believe it
00:34:28
or not I got like 800,000 followers on
00:34:30
Tik Tok you know don't go there terrible
00:34:32
place but I see people making just like
00:34:34
terrible content around the thing that
00:34:36
really got me on there was around day
00:34:37
trading like I I was like dang day
00:34:39
trading's back holy crap you know and
00:34:41
just trying to sell this idea this
00:34:42
get-rich quick stuff to young people so
00:34:44
I got mad so I started making videos on
00:34:46
there and so this book really is came
00:34:49
from that passion of now I know all
00:34:52
these secrets of the wealthy that I had
00:34:54
to learn along the way and i' I've
00:34:55
actually conducted studies on ultra
00:34:57
wealthy people in their mindset and all
00:34:58
that and my passion is really to try to
00:35:00
teach this to as many people as possible
00:35:02
so that was the mission behind this book
00:35:04
got it part of the the context of the
00:35:06
book is that maybe people who didn't
00:35:09
come from a privileged background to
00:35:11
know all this stuff they come in with
00:35:12
some assumptions that are they're
00:35:14
frankly just wrong and someone needs to
00:35:16
correct those assumptions or or give
00:35:17
them some of the harsh truths so let's
00:35:19
dive in I mean what are some of the the
00:35:21
harsh truths that you talk about in the
00:35:22
book that stand out the most oh and
00:35:24
they're harsh too and and I got to tell
00:35:26
you this like I'm a clinical
00:35:28
psychologist so hey you know you want to
00:35:30
have a good cry with me that's great I
00:35:32
will offer you comfort I will offer you
00:35:34
support and then when you're done crying
00:35:36
I'm going to go I'm probably going to
00:35:37
get up and shut the door make sure no
00:35:38
one's listening outside and then I'm
00:35:40
going to be like okay what are you going
00:35:42
to do differently next time you know I'm
00:35:44
probably going to give you that tough
00:35:45
love because I I love you and I care
00:35:47
about you it's kind of what I how I talk
00:35:49
to my kids you know my kids are like oh
00:35:51
I suck at baseball I'm like yeah you
00:35:53
suck dude you've been playing for a
00:35:55
month like what do you expect if you
00:35:56
want to not suck this is what you have
00:35:58
to do and so it there comes a time and a
00:36:00
place to like just give it to people
00:36:02
straight if you really care about them
00:36:03
and so that's really what I'm trying to
00:36:05
do um with my co-author Adrian that's
00:36:07
what we're trying to do in this book is
00:36:08
just give it to people straight and so
00:36:10
we say terrible things about poor people
00:36:11
in this book you know now I I grew up
00:36:13
poor right so it's only because I love
00:36:15
you but we I do want to say this we
00:36:17
differentiate between poor and broke so
00:36:20
broke means you have no money poor is a
00:36:24
mindset and a poor mindset will keep you
00:36:26
broke forever and so we kind of hit that
00:36:29
poor mindset really hard so we have a
00:36:31
chapter that says if you want to get
00:36:33
rich you got to get rid of your poor
00:36:34
friends and that's kind of a harsh truth
00:36:37
but everybody kind of knows it you know
00:36:39
you've heard people talk about how
00:36:40
you're the average of your five closest
00:36:42
friends I mean people know this we're
00:36:44
wired to be social animals we are wired
00:36:46
to feel connected to a group of people
00:36:48
and emulate their behaviors and if
00:36:50
you're around a bunch of people are
00:36:51
drinking all the time it's really hard
00:36:52
to not drink and the same thing is true
00:36:54
with money so you can have people who
00:36:56
are have a poor mindset they're making
00:36:58
six figures a year and they spend every
00:37:00
dime they have they don't invest
00:37:01
anything they're always looking for the
00:37:02
next thing that's a poor mindset and if
00:37:04
you're hanging around those people
00:37:05
you're going to be broke forever and so
00:37:08
the idea is to try to find people who if
00:37:10
Financial Freedom is your goal try to
00:37:12
put yourself around people who that is
00:37:14
also their goal and so I have friends
00:37:16
who brag about the biggest thing they
00:37:18
brag about is the percentage of their
00:37:19
income they're saving and investing
00:37:21
they're not bragging about their cars as
00:37:22
a matter of fact people will be like oh
00:37:24
what what kind of car was that how much
00:37:25
that cost you I mean there's like
00:37:26
judgment around it not like oh cool look
00:37:28
what you did because we we kind of get
00:37:30
the game you know and everyone's
00:37:31
everyone's a multi-millionaire and it's
00:37:32
sort of like oh okay well did you get
00:37:34
that watch with passive income or did
00:37:36
you trade some time for that o because
00:37:38
that we don't respect that at all so
00:37:40
it's really understanding I think how
00:37:42
how rich people think about it like what
00:37:43
is that rich mindset so this entire book
00:37:45
goes over it goes over money scripts it
00:37:47
goes over all the research I've done on
00:37:49
the psychology of wealth we try to put
00:37:51
it in these titles that are sort of like
00:37:53
a slap across the face like some tough
00:37:55
love and then a war chapter that's warm
00:37:58
hugs you know we want to love you
00:37:59
through this we're not here to try to
00:38:00
shame anyone but that title gets people
00:38:03
going yeah I'm sure it does but you
00:38:05
differentiated there you said there's a
00:38:07
difference in your definitions there's a
00:38:08
difference between poor and broke poor
00:38:10
is mainly a mindset that leads to
00:38:13
negative outcomes in some way shape or
00:38:14
form and you said you didn't say that
00:38:16
you have to get rid of all your broke
00:38:17
friends you said you have to get rid of
00:38:19
all your poor friends there's some truth
00:38:21
to that that whole idea that if you
00:38:23
surround yourself with people who are
00:38:24
striving to be better which I would
00:38:26
assume is not the trait of a poor
00:38:28
mindset in your definition Brad if
00:38:30
they're striving to be better through
00:38:32
some inertia through social Force
00:38:34
Through social osmosis you are going to
00:38:36
start to strive to be better yourself I
00:38:38
I think of one of my best college
00:38:39
friends he and I bonded over a few
00:38:41
different things one of which being we
00:38:42
were from similar backgrounds like grew
00:38:44
up in Blue Collar areas and were're we
00:38:46
were kind of one one of the smarter kids
00:38:48
from a small school and We snuck our way
00:38:50
into the University of Rochester
00:38:51
together and he came to me one time and
00:38:54
he said if I didn't get out of that town
00:38:56
and come to a place that you of are I'm
00:38:57
a little worried about where I would be
00:38:59
because the people who stayed in that
00:39:01
town are kind of in this what you would
00:39:04
Define as a poor mindset oh we're never
00:39:06
going to get out of here and this is
00:39:07
never going to get better and there's
00:39:08
nothing I can do and it's out of my
00:39:10
control and a phrase that I like in the
00:39:12
situation is what an internal locus of
00:39:14
control do I have the ability to control
00:39:17
my own ship and control my own destiny
00:39:18
and get to somewhere better and I think
00:39:20
when you surround yourself with people
00:39:21
who who think that way who who strive to
00:39:24
make their lives better in that way it
00:39:26
can't help but rub off on you in some
00:39:28
way shape or form I mean is there any
00:39:30
clinical data that that that backs that
00:39:32
thought up oh yeah absolutely I mean our
00:39:34
entire Evolution as a species was being
00:39:38
very very concerned about it was a group
00:39:40
of about 100 to 150 people that's how we
00:39:42
spent most of our time on Earth to be
00:39:44
very concerned about what other people
00:39:45
are doing and saying and we don't want
00:39:47
to be too far away from them and this is
00:39:49
one of the reasons why you know I think
00:39:50
of the concept of escape velocity so
00:39:53
like to leave a HomeTown like that where
00:39:55
you feel like they have somewhat
00:39:56
limiting beliefs or opportunities or
00:39:58
whatever it is is really really tough it
00:40:00
takes so much energy for a rocket to
00:40:02
escape the gravity of Earth and for you
00:40:04
to kind of move away from your tribe if
00:40:07
you're trying to climb the socioeconomic
00:40:09
ladder for example it's so tough that
00:40:12
most people sabotage themselves and it's
00:40:14
sort of a a fascinating concept it's
00:40:16
like you hear all these stories about
00:40:18
lottery winners and they oh they got
00:40:19
tens of millions of dollars hundreds and
00:40:20
guess what it was all gone in seven
00:40:22
years and a big part of that energy is
00:40:25
like all of the sudden their family and
00:40:26
friends look at them differently and
00:40:29
that's where you really have to be
00:40:30
careful about who you surround yourself
00:40:31
with and I love what you said too it's
00:40:33
like I can spot somebody who's broke who
00:40:36
I'm like oh my gosh that kid's going to
00:40:37
be a multi-millionaire like I could just
00:40:39
tell in a five- minute conversation
00:40:41
because of their mindset and because of
00:40:42
what habits they're already instituting
00:40:44
even though they have like a paper route
00:40:46
and so it's like it's not about oh you
00:40:48
got to be around rich people it's about
00:40:50
surrounding yourself with people who are
00:40:52
on the same track and hold the same
00:40:54
values and want to get to where they're
00:40:55
going CU essentially that's what you're
00:40:56
going to need
00:40:57
it's really hard to leave your tribe
00:40:59
there's all sorts of pressure to keep
00:41:00
you back and you're going to need a new
00:41:02
tribe you're going to have to find one
00:41:04
I'm I'm almost finished with a biography
00:41:06
of Warren Buffett and it is so funny the
00:41:09
stories about him as like an eight and
00:41:11
10 and 12 and 14y old boy it was so
00:41:14
obvious that he loved he loved investing
00:41:17
he loved stocks he loved
00:41:18
entrepreneurship he loved working hard
00:41:20
like all these traits that sure enough
00:41:22
just let those traits compound for not
00:41:24
even that long I think he was a
00:41:25
multi-millionaire by like 35
00:41:28
even in that day even in like the 50s
00:41:29
and 60s which is crazy in and of itself
00:41:32
but it's the idea that he couldn't help
00:41:34
but become successful with those types
00:41:36
of traits and I think there's some
00:41:38
similarity here where with me am I like
00:41:40
do am I like War Buffet you see waren
00:41:42
buffet in me it's amazing there I mean
00:41:46
you you are in uh you're in Omaha right
00:41:48
you've got something in common with
00:41:49
Warren Buffett well once you hit us Brad
00:41:51
hit us with another one of the harsh
00:41:52
truths I've got a chapter that is pretty
00:41:55
it it's sort of sarc itic but we run the
00:41:59
numbers I get a lot of people who tell
00:42:01
me you know I can't afford to invest
00:42:02
speaking of locust of control like when
00:42:04
I hear that I'm just sort of like oh
00:42:06
like I worry about you if you feel like
00:42:08
what do you mean you can't afford to
00:42:10
invest like who said where is that
00:42:11
written like who wrote that down for you
00:42:13
that this is a law you must follow and
00:42:16
because I'm all about we have a lot of
00:42:17
chapters on Locust control you know that
00:42:19
hit that idea of like the wealthiest
00:42:21
people and the most successful people
00:42:24
take responsibility for everything in
00:42:26
their life it's wild even things they
00:42:28
probably shouldn't be taking
00:42:30
responsibility for but they're like hey
00:42:31
I'm the master of my fade I'm I need to
00:42:33
learn this something goes bad they're
00:42:34
like what did I what red flags did I
00:42:36
miss yeah sure that guy stole all my
00:42:37
money my business partner yeah and I'm
00:42:39
upset but I'm not going to complain
00:42:41
about it I'm like what what did I what
00:42:43
sort of things did I miss we have a
00:42:45
chapter called complaining is for losers
00:42:47
and it's like again I'm a psychologist
00:42:49
right like I want to hear all about your
00:42:50
pain and suffering and I I want to have
00:42:52
a good cry you know I'll patch you on
00:42:53
the back and then it's like okay so now
00:42:55
what you what are we going to do what
00:42:56
are we going to do here what action are
00:42:57
we going to take how are we going to fix
00:42:59
this like I don't want to hear you
00:42:59
complain about your wife are you kidding
00:43:01
me that's boring to me like what can you
00:43:04
do to make the relationship better it's
00:43:07
incredibly powerful like if you can make
00:43:09
that shift first of all my wife loves it
00:43:11
when I blame myself for everything it's
00:43:12
right along with her beliefs about
00:43:15
what's happening in the relationship but
00:43:16
I'm always looking for elements of okay
00:43:18
well she's upset you know I'm here in
00:43:20
Austin right now doing a bunch of book
00:43:22
stuff and it's like I'm going to come
00:43:23
home we got two young kids she's
00:43:25
probably going to be kind of Grouchy you
00:43:26
know and so I can take offense like look
00:43:28
at me I'm over here making money and
00:43:30
doing this for us and look at you why
00:43:31
are you treating me this way I deserve
00:43:32
so much better or I could just be like
00:43:34
look it's rough so what can I do so how
00:43:37
can I show up in there and be different
00:43:39
it's so amazing it's so simple but that
00:43:41
Locust control will um if you take it
00:43:43
internally it'll make you richer and
00:43:46
it'll make you happier but we have a
00:43:47
chapter where we say oh you can't afford
00:43:49
invest okay so get a roommate get sober
00:43:52
ride the bus and shave your head like
00:43:55
I'm bald here you go I save a lot of
00:43:56
money in haircuts but what we did is we
00:43:58
looked at the average amount that an
00:43:59
American spends for all all of those
00:44:01
things and then we said well if you
00:44:03
invested that that average market
00:44:05
returns in 25 years do you know what the
00:44:07
total is if you got a roommate rode the
00:44:09
bus shaved your head and stopped
00:44:10
drinking it's like $2.9 million in 25
00:44:13
years that's the average American and so
00:44:16
we get stuck on this idea that oh
00:44:18
success is impossible and those types of
00:44:20
things and we're trying to really smack
00:44:22
that in the face CU it's not true and
00:44:24
you might say like I don't want to do
00:44:25
all those things and it's like I'll be
00:44:26
like I don't want to do it either so why
00:44:27
don't you just save and invest you know
00:44:30
or find other ways to increase your
00:44:31
income and so we have we have chapters
00:44:33
in there my co-author Adrien banila is
00:44:35
he's best known on social media for
00:44:37
making uh $1.7 million while in a year
00:44:39
in one year while living in a van and
00:44:41
he's sort of hacked the income side like
00:44:43
how to increase your income with side
00:44:45
hustles and and I'll just tell you
00:44:47
really quickly my 11-year-old instituted
00:44:49
one of these side hustles from Adrian
00:44:51
and this month he's set to make five
00:44:52
grand as an 11 you know full-time
00:44:55
student doing homework every day playing
00:44:57
baseball he's got a full life but on the
00:44:59
weekends he's busting his side hustle
00:45:00
for a few hours making five grand this
00:45:02
month so it it's about how can I how can
00:45:04
we Empower people to better their lives
00:45:07
that's that's essentially the essence of
00:45:08
the book yeah it it is interesting it's
00:45:10
I've done some uh written some articles
00:45:12
and spoken about it here on the
00:45:13
microphone before the average person
00:45:16
well maybe not the average person a
00:45:18
surprising number of people I'd say
00:45:20
Overlook the simple fact that in order
00:45:22
to build wealth right in order to do
00:45:24
what we're talking about today it really
00:45:26
starts with a simple Foundation of
00:45:28
either increasing income or decreasing
00:45:30
expenses and when you look at your
00:45:32
expenses there might be some things in
00:45:34
there whether it's the beer runs whether
00:45:36
it's getting a roommate whatever it
00:45:37
might be depending on your point in life
00:45:40
but odds are you can trim some fat if
00:45:41
you really want it to or need it to and
00:45:43
oftentimes I don't know maybe it goes
00:45:45
back to money scripts the reasons the
00:45:46
excuses that people give themselves for
00:45:48
not taking that action but I wanted to
00:45:50
focus on the locus of control idea one
00:45:53
more time Brad I mean if someone's
00:45:55
listening right now and they're hearing
00:45:56
us talk they might not be able to look
00:45:59
at themselves and and really know like
00:46:00
wait do I take on an attitude of an
00:46:02
internal locus of control am I too
00:46:05
external do I blame things on the
00:46:06
outside too much is there anything that
00:46:09
anyone can do to whether it's self
00:46:11
diagnose or self treat or move
00:46:13
themselves in a better direction towards
00:46:15
adopting a more internal locus of
00:46:17
control one of our controversial
00:46:19
chapters the entire book is controver
00:46:21
but is a chapter said only poor people
00:46:23
think the system is rigged the whole
00:46:25
concept of it's rigged against me it's
00:46:28
like it's almost like okay fine but it's
00:46:30
not fine like life isn't fair certainly
00:46:33
accidents of birth give some people
00:46:35
privileges other people don't have
00:46:36
that's all absolutely 100% true but I
00:46:39
think it's a better frame to look at it
00:46:40
like a game and so do you have an
00:46:43
internal locus control do you have an
00:46:44
external locus control are you looking
00:46:46
at it like it's a game so if I show up
00:46:50
to a football game with my tennis racket
00:46:53
and my tidy Whitey shorts I'm about to
00:46:55
get demolished okay and I might be out
00:46:58
there on the field going well this isn't
00:46:59
fair I can I can't even hit this
00:47:01
football with my strings and why is
00:47:02
everybody knocking me over and the
00:47:04
bottom line is I showed up with the
00:47:06
wrong uniform I showed up with the wrong
00:47:08
preparation I did not train I do not
00:47:10
know the rules of the game I don't know
00:47:11
the culture of the game and how can I
00:47:13
possibly be successful and so whatever
00:47:16
the game is first of all it's important
00:47:18
to recognize you're playing a game if
00:47:19
you're an employee and you're not very
00:47:21
happy you're playing the employee game
00:47:22
and so that might be fine but maybe you
00:47:24
need to learn how to climb the ladder if
00:47:26
that's what you want to do or maybe you
00:47:27
decide like I don't want to play that
00:47:29
game and so I think a huge part of it is
00:47:31
just recognizing and being able to
00:47:32
observe yourself you're in the midst of
00:47:34
a game whatever game it is you're
00:47:36
playing in terms of your profession and
00:47:39
if you're not getting what you want it's
00:47:40
up to you to change it you can't sit
00:47:42
around we actually have a chapter to
00:47:44
it's election year like your political
00:47:46
party doesn't give a a blank about you
00:47:48
they don't and the bottom line is if you
00:47:51
expect the government if you expect
00:47:53
other people to magically come in and
00:47:55
make you financially free if you expect
00:47:57
your company and your boss to like care
00:47:59
about your financial they don't want you
00:48:00
to be financially free do you know what
00:48:02
the replacement cost is to train someone
00:48:04
to have you do to do the job you do that
00:48:07
external blame it's so seductive because
00:48:09
there's so many people to blame and a
00:48:11
lot of people who are like deserve blame
00:48:14
I mean we're not we're not even talking
00:48:16
about the fact that that doesn't exist
00:48:17
it's just not a helpful way of looking
00:48:19
at it I like that a lot and and I like
00:48:22
the fact that you said listen we all
00:48:24
recognize that life can be unfair and we
00:48:27
look at the world and we can say sure
00:48:29
there are certain systems in this world
00:48:31
that probably aren't fairly set up or at
00:48:33
least aren't fairly set up for me in
00:48:34
particular but if it's out of your
00:48:36
control I mean this is like a this is
00:48:38
almost a stoic mindset right like if
00:48:40
something's out of your control and
00:48:42
you're spending your own brain energy
00:48:44
worried about it frustrated by it Angry
00:48:47
by it it's just a waste of your time and
00:48:49
energy and resources you're much better
00:48:51
off just saying listen this is the hand
00:48:52
I've been dealt and you use the football
00:48:54
and Tennis analogy I like card games so
00:48:57
I usually use the card game analogy
00:48:59
which is sometimes you know life is a
00:49:01
game of poker and you're forced to play
00:49:03
the hand that you're dealt and you were
00:49:05
dealt kind of a bad hand well what do
00:49:07
you do I don't know maybe you get good
00:49:09
at bluffing maybe it's a game of poker
00:49:11
where you can discard some of your cards
00:49:12
and try to get new ones and and cross
00:49:14
your fingers and hope for the best but
00:49:15
either way you've got to find a way to
00:49:17
play the the hand that you're dealt and
00:49:18
play it to the best of your ability it
00:49:20
doesn't really do you that much good to
00:49:22
to cry over spilled milk or cry over a
00:49:24
bad hand now I'm mixing my analogies
00:49:26
here but but that that's a very
00:49:27
interesting one and while while harsh
00:49:30
ultimately it sounds like your book
00:49:32
Rings true or at least Rings true to me
00:49:34
in terms of providing helpful insight
00:49:36
Brad so if someone listening to this
00:49:38
right now maybe they want to read more
00:49:40
of your research maybe they want to hear
00:49:42
you speak more maybe they want to check
00:49:44
out the book where can we point a
00:49:46
listener to right now to to check out
00:49:47
more of your work Brad yeah so I'm on
00:49:50
every social media channel making an
00:49:52
absolute fool of myself to try to help
00:49:55
people improve their Financial Health so
00:49:57
I don't sing and dance but I do make
00:49:59
videos that are sort of designed to like
00:50:01
grab young people's attention so I used
00:50:03
to make videos saying like oh here are
00:50:05
the keys to wealth and and trying to
00:50:07
review all the research now my videos
00:50:08
start with you'll be poor forever unless
00:50:11
you do these three things you know I'm
00:50:13
like I'm competing with all this like
00:50:15
crappy information out there by people
00:50:16
who are really good at getting attention
00:50:18
and so I basically had to compromise on
00:50:20
myself like what you'll be poor forever
00:50:22
like come on how do you know that well
00:50:24
it's I'm trying to grab your attention
00:50:26
and then then in the midst of the
00:50:27
content I'm giving you the stuff that we
00:50:29
found in our research studies so anyway
00:50:31
there's I've had some people listen me a
00:50:33
podcast oh my God and then I saw your
00:50:35
social media oh my God like which one's
00:50:37
the real you and and they're both me you
00:50:39
know I'm trying to talk to the the
00:50:40
people who need to hear it in the
00:50:41
language they need to hear it so Dr Brad
00:50:43
Clon on social media and with regard to
00:50:45
the book start thinking Rich um.com
00:50:48
awesome we will throw all those links in
00:50:50
the show notes former guest of the best
00:50:51
interest podcast Nick muli one time I
00:50:53
was chatting with him and he said you
00:50:55
know he's like yeah I've started started
00:50:56
using clickbait titles clickbait on all
00:50:59
my articles but as long as I back it up
00:51:01
with really good content I don't think
00:51:03
there's anything wrong with clickbait
00:51:04
and for those of you listening you'll
00:51:05
see sometimes my titles get a little bit
00:51:07
you know there's some exclamation points
00:51:09
in there but hopefully I back it up and
00:51:11
Brad I know you back it up with some
00:51:13
great content so Dr Brad Clans thank you
00:51:15
for stopping by the best interest
00:51:17
podcast thanks for having
00:51:19
me thanks for tuning in to this episode
00:51:22
of the best interest podcast if you have
00:51:24
a question for Jesse to answer on a
00:51:26
future episode send him an email at
00:51:28
Jesse bestin interest. blog again that's
00:51:32
Jesse bestter interest. blog did you
00:51:35
enjoy the show subscribe rate and review
00:51:37
the podcast wherever you listen this
00:51:40
helps others find the show and invest in
00:51:42
knowledge themselves and we really
00:51:44
appreciate it we'll catch you on the
00:51:46
next episode of the best interest
00:51:48
[Music]
00:51:51
podcast the best interest podcast is a
00:51:53
personal podcast met for education and
00:51:55
entertainment it should not be taken as
00:51:58
Financial advice and is not prescriptive
00:52:00
of your financial situation