Afford Anything - The Dark Experiment That Explains Your Money Problems, with Dr. Brad Klontz and Adrian Brambila

Episode Date: October 22, 2024

#551: Financial psychologist Dr. Brad Klontz and Youtuber Adrian Brambila join us to talk about money psychology, starting with a dark but revealing story about an experiment with dogs.  Scientists put dogs in electrified cages from which they couldn't escape. Eventually, the dogs stopped trying to escape and just lay down, even when later moved to cages where escape was possible. This 'learned helplessness' mirrors how people can get trapped in negative beliefs about money when they grow up with financial hardship. The conversation explores four main "money scripts" - deep beliefs about money that shape our behavior: 1. Money Avoidance: Thinking money is bad and rich people are evil 2. Money Worship: Believing more money will solve all problems 3. Money Status: Equating net worth with self-worth 4. Money Vigilance: Being careful and anxious about money (this one actually leads to the best financial outcomes) Adrian shares his journey from making $27,000 at a call center in Iowa to becoming successful through YouTube, explaining how he had to find mentors online since no one around him understood his goals. He talks about feeling like a "lone wolf" with uncommon aspirations in a small town. Dr. Brad reveals some surprising findings - like how meditation is linked to lower net worth (because being present-focused can work against future planning). His solution? "Automate before you meditate" - set up your savings and investments first. They discuss how your friend group shapes your money views. The FIRE (Financial Independence Retire Early) movement, for example, creates status around having high savings rates instead of fancy cars. But they note some FIRE followers end up "FIRED" - Financially Independent Retire Early Depressed - because they never learned to enjoy spending money. Dr. Brad shares a personal story about realizing in couples therapy that his fear of becoming poor was causing harmful stress, even though he was financially secure. This highlights a key theme: money scripts affect both rich and poor, and having more money doesn't automatically fix unhealthy money beliefs. All these insights come from Dr. Brad and Adrian's research and personal experiences, which they've collected in their book "Start Thinking Rich." The core message? Your money beliefs probably came from your childhood and culture, but you can change them once you understand them. Timestamps: Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. 0:00 Intro to 3-part series on thinking rich 3:01 Psychology experiment reveals how learned helplessness affects money habits 8:12 Adrian's journey from call center worker to YouTuber 14:16 How friend groups sabotage financial success 19:52 Brad's struggle sharing book-writing aspirations 29:30 Being the lone ambitious person in a small town 40:24 Introduction to the concept of money scripts 48:20 Money script #1: avoiding wealth and villainizing rich people 56:52 American consumerism vs other cultures 1:02:40 Money script #2: believing money solves everything 1:09:20 Money script #3: equating net worth with self-worth 1:16:40 Money script #4: vigilance leads to better money outcomes 1:20:40 Why meditation correlates with lower wealth 1:22:48 When parents can't enjoy their retirement money 1:29:44 Overcoming the fear of becoming poor again For more information, visit the show notes at https://affordanything.com/episode551 Learn more about your ad choices. Visit podcastchoices.com/adchoices

We have something really special today. This is the first episode in a three-part series with Dr. Brad Clance and Adrian Brambilla on how to start thinking rich. This series will fundamentally change your mindset around money. Welcome to the Afford Anything podcast. You can afford anything, but not everything. Every choice carries a trade-off. And that applies not just to your money, but to any limited resource you need to manage.

Like your time, your focus, your energy, your attention. This show focuses on five pillars, financial psychology, increasing your income, investing, real estate, and entrepreneurship. It's double-eye fire. I'm your host, Paula Pant. I trained in economic reporting at Columbia, and I help you focus on what matters. Welcome, Dr. Brad and Adrian. Thanks for having us. Thank you.

Dr. Brad, there was once an experiment done on dogs that was a little bit unpleasant. You tell us about that. It's actually a horrific story if you are an animal lover, which I am. And ironically, the psychologist who conducted those experiments went on to create an entirely new field of psychology called positive psychology, probably trying to make up for the sins of the dog experiment. But first of all, the results of the experiment are so profound and so important, people get stuck in this dog mindset that some of these dogs who suffered from. and it'll last the rest of their life. And so essentially what they did is they put dogs in cages

and they would electrify the bottom of the cage. The dog would do what any animal would do or any person would do, danced around, tried to escape. Eventually, it realized that it couldn't escape. And so then it just laid down and whimpered and just took the shocks. So they had a traumatized group of dogs. And then they had a group of dogs who didn't go through that.

And they changed the experiment. So this time they had half the cage electrified with a little area they could just jump over this little fence. And there was a side that wasn't electrified inside that was. The dogs that had never been in that experiment, they danced around, eventually jumped over to the other side where it was safe to escape the shock. The dogs that were originally in that condition where they couldn't escape, they didn't even try to escape.

And so success, freedom, lack of pain was just inches away, but they didn't even try to attain it. And so in psychology, we ended up terming that learned helplessness. And it's something that is taught. And many of us grow up as kids in situations where escape is impossible. I mean, for a child, you can't escape. And poverty is one of those situations where it doesn't matter what you do as a child.

You can't do anything about it. You can get a paper out. I got a paper out as a kid. But you really can't transform your family's experience. You really can't break out of that trauma of poverty. And I think poverty is just a series of traumatic events for most people. What happens, though, that mindset of escape is impossible, why bother trying? It's an adaptable mindset when escape is impossible.

It becomes dysfunctional when escape is just a jump away, a hop away. And so that's the mindset that I think is the most dangerous and the most tragic that many people carry from childhood into adulthood. And it plays out in many areas of their life. And beyond mindset, there are neuroplasticity implications. The amygdala is actually impacted. if a person grows up in poverty. Yeah, absolutely. So it has a bunch of emotional dysregulation associated with it.

Health problems, more likely to have mental illness. I mean, there's a whole host of negative outcomes when you're living in poverty. If you've ever had that experience or been close to it, it's pretty easy to see why. I mean, there's direct threats to your safety. Obviously, you can't access things that are fun and exciting, but also you can escape situations that could be dangerous for your mental health and physical health. given that the nature of animals is to learn helplessness, how do those of us who have some degree of learned helplessness start to be the dogs that jump to the other side of the fence? How do we start

to overcome what is actually an intrinsic nature to learn a sense of helplessness? First of all, that's a great question. And if we had an easy solution, we could just apply it to everybody. I think the biggest and most important aspect is understanding that that's what's happening and having that awareness because what happens and for the dogs too, they're living in an environment where escape is literally impossible no matter what they do. And as a child, that type of learning becomes our reality because our brains are just trying to cope with what's real so that we can thrive and survive. And frankly, what was in the dog's best interest was to just lay down and take it versus burning all this energy off in a fruitless, ineffective way. The most

important part is waking up to the awareness that, oh, wait, wait a second, if I think about this differently, if I have a mindset shift, maybe I'm going to have different results. And so that's one of the reasons why I love to talk about that experiment. It's a terrible experiment. But if I'm suffering and if I feel like no matter what I do, nothing's getting better and I understand that experiment, then it's like, well, wait a second. Maybe there is something I can do. Maybe escape is now possible for me, even though it wasn't for so many years. And I think that's probably the biggest shift that people hopefully can make is that the outcomes they're getting in their life, they have some power to influence them. Because once you're aware of that, it's like a light bulb shifts,

flicks on for you. And then you can start looking for solutions. And in my work, too, I feel like the solutions for financial freedom, the what you need to do to get out of debt, what you need to do to start to build wealth are relatively simple. You know, there's some literacy stuff there. You got to learn some of the tricks. But the biggest shift, I think, is that, wait, I can do this. I can change my life. And that's really what I'm trying to do in the world is trying to inspire people to realize that they can. But oftentimes there is a conflict between people feeling empowered and people feeling comfortable because so often the coping mechanisms that we use in order to cope with current reality is to dismiss those who have succeeded as they're greedy, they're selfish,

they succeeded because of nefarious actions. We have these coping mechanisms that keep us comfortable and yet actually work against our own self-interest in the long term. Yeah, and they're really sticky. So they're the beliefs that we've, we call money scripts on our research, and they're the beliefs that we've gotten from that type of experience growing up. The dangerous part, and one of the most challenging parts, is then we surround ourselves with a bunch of people who believe the way we believe and think about it the way we think about it. And essentially, we're tribal in nature. Most of our time on earth has been in groups of 100 to 150 hunter gatherer tribes or tribe mates. And we all have similar beliefs and we have similar ways of doing things. And cultures is very,

very sticky. And so when you see another tribe, they're scary. They're dangerous. They could take things from you. What I have found is that if all you do is are sort of sticking around people who think the same way you do, you're actually going to be limited to whatever those people are getting to. It's sort of a self-limiting thing. And not only that, they will sabotage you if you try to leave the tribe. So first of all, you're wired to not leave the tribe because if you left the tribe for 99% of our time on earth, you died. And so there's a threat there. And then they will actually try to sabotage you leaving the tribe because they love you, not because they want to hurt you, but they don't want to lose you. And so as you start to make money, perhaps they will turn some disparaging

thoughts about wealthy people towards you. The subtle message here is that you're having more, you're becoming one of them. I never thought you'd become one of them. And all that is meant to try to keep you close. They don't want to lose you to another tribe, like another socioeconomic tribe, for example. Right. Tell me some examples of some of the messages that people would hear when fellow crabs in a bucket are trying to keep them down. Well, I feel like on your journey to success investing, whether you get a promotion. It's all these little subtle comments you get. So let's say if you get a promotion, you start making more money and your friends know about it. Maybe they're even your peers. They might start saying things like, wow, must be nice.

Must be nice that you can afford that. Must be nice. You got that promotion. It's almost like a backhanded compliment where Brad and I were friends first. And I feel like he's one of the few people when he tells me he increased his income or he launched a product. I don't say anything envious or jealous. I'm so truly. excited for him. I'm curious on how he did it because I want to learn. I think when you just think of your friends a lot, do you talk about with money to your friends and how do they act? How do they react? When you get a new car, are they suspicious? Do you feel like there's a slight undertone in how they interact with you? It's like the intention behind the words. There's so much to say about

faking it until you make it. And also in terms of your relationships with people, what they say is truly not what matters is the intention behind it. I know you probably have a ton of people and creators that when you talk about your success, there's some people who they're curious, they want to lift you up, and then others that it's just like in small, petty ways that will kind of start chipping at you, I think. In fact, you had once had an interaction between the two of you in which, Brad, you were saying to Adrian, hey, I don't mean to brag, but, and Adrian, how did you respond? I told Brad that you could never brag to me.

It will never come across as a brag. And I wish I had more people like Brad in my life that when they made a new income, when they saved their first million dollars, they would tell me because it reestablishes my blind optimism than I have sometimes. The more people I know that are achieving success, I feel like it's proof that what we're talking about, what we believe in, why we create books, why you make this podcast is because we're optimist that we actually can change our circumstance. So I am constantly looking for reinforcement that anyone can make this happen. And so Brad, it's funny, when you start sharing money with someone, it's almost like dating. It's like, did I share too much? Should I not say that with this person? I don't know how they're going to react.

And then eventually you get to the point like, I trust Brad. Then I kept reminding Brad's like, dude, it's never a brag to me. I want to know when you landed a new speaking gig and it's the most you've ever paid for. I want to know when you land a new brand's partnership. I want to know that you grew your business by two X this here. Like, I want that information. So it's never a brag. And I feel like Brad now, we don't have to have like a little disclaimer every time we talk about our

we just say it's like, dude, look at this. It's a screenshot of your dashboard that day of how much your business did. And my reaction, as always, that's amazing. I can't, that's so cool. When you first started your business, because you made 27,000 in your first job out of college, was that right? Yeah, a prudential retirement and a call center, customer service. Yeah. Who were you hanging out with at the time?

What was your peer group like? At the time I was in Dubuque, Iowa. I feel like my circle of people that were trying to, get out of that call center. It was online. In Dubuque, Iowa, it's not like L.A. It's not like New York. It's not people that are trying to hustle. It's like small town, small town, middle class average. So like for me at the time, even though I was working the call center, I was just starting my first business, which wouldn't make money for the first couple years, which was teaching people had dance the robot. Side quest before that, I used to dance with T-Pain.

and so I was no longer a professional dancer and I was back in school and then working at this job. I was too scared to move to LA. The internet was where I would go and research. Who are these people that are, what's a YouTuber? This is like 2010. So YouTubers was not as common as it is today. So if you don't grow up in a place that is abundance with millionaires or you don't know them, which is most people, it doesn't mean like you give up, like you go and find them.

So back then it was early YouTubers and WordPress blog. and I would just try to soak in all the information of like, how can I make a full-time living from creating YouTube? So that's where I went to try to find out if this was possible. And the first book I ever read that changed my life was the four-hour work week by Tim Ferriss. And it's quoted a lot as it should be because it first gave me the idea. You actually don't need to work up a corporate ladder and there's actually another way. These examples, they seem so pocketed.

They're more common now, but there's all kinds of ways you can actually make a living from the internet. it. The people that you interacted with on a day-to-day basis, were they thinking in that same way? Because it seems as though you were living in two worlds at the time. There were the people that you knew face-to-face, and then the people that you were discovering online. So you sort of had two separate peer groups, the online people, a niche of people who are committed to making money, and then the face-to-face people, not. Yeah, we all have different peer groups. Although I share like Brad, I would consider my inner circle where I talk about money. I don't talk about money with all my friends. So I had my peers that were also in the call center. Not all of them had

the aspirations to challenge the status quo. Some of them, their aspirations were I'm going to work at Prudential for 15 years and one day be a manager and work your way up. I didn't share those beliefs. And in Dubuque, Iowa, it was just, I had very uncommon aspirations. And I think it was just because of in Iowa, there's just less. If I was in a bigger city, I feel like I probably could have met people in person, but often when I told people, I want to be a YouTuber, the reaction was usually, wait, YouTuber, like, isn't that where people upload cat videos? Again, it wasn't as common back then. I remember I was trying to land a job in marketing and no one could connect me to someone. I lacked the resources of the people. Eventually, I hustled my way into a door and

and my resume said, I worked at a call center for a year. I was trying for a marketing job. So obviously it was relevant experience. And then I put my YouTube audience, I think I had like 10,000 subscribers. And the marketing director who was hiring said, like, YouTube, like, what does that have to do with marketing? I just felt like I had no resources in person. So I had to go online. And I had this blind optimism from just learning the little examples I could online. And from that book I mentioned, this is worthy of pursuit, even though I'm not surrounded by people who understand what I do or could even help me or even shared the same goal of like, oh, that's cool. I want to do that too. I didn't have this. Sometimes I talked

about my earlier journey that I felt like a lone wolf. I had these uncommon goals. And so on the internet was where I tried to look for information and internet peers, I guess. Dr. Brad, going back to you then, I want to unpack that psychology of the lone wolf, because we are, as humans, tribal animals. We are influenced by the people around us. How can any person sustain that blind optimism that you talk about, that leap of faith in those moments when you feel like a lone wolf and in those moments when nobody around you understands what you're doing, at best they're neutral about it or more likely

they're actively negative about it? it is so hard. And I think of escape velocity, which is sort of the concept of how fast you have to get a rocket going to actually escape the gravity of Earth. Because the gravity is really, really intense for you not to do that. Adrian has a great example there where people are confused or somewhat dismissive. There's even more extreme examples where people will actually like make fun of you or laugh or talk about how it's kind of a ridiculous goal. or I know that when I wrote my first book, I started to talk to people about writing a book. And I very quickly learned to not to share this with people. Right. Because I would get things like, so discouraging.

Oh, it's really hard to write a book. I heard too from somebody, oh, everyone wants to write a book. Everyone wants to write a book. A publisher told me that once. And I was like, oh, man, it's discouraging stuff, right? Right. And so I remember that I was in a bookstore once, and I was perusing the psychology section, and I picked up this book.

I looked in the back and this author had graduated from the same school I had gone to. So Wright State University. Right state. In Dayton, Ohio. That's right. School professional psychology. So here I'm looking at somebody, I'm like, oh, I have the same degree. This guy does. And he wrote a book. And immediately I thought, well, maybe I could, I think I could write a book. I mean, it was really wild to see that because I saw somebody who somewhat looked like me, came from where I came from, who did it. And I reached out to him with that connection. I said, hey, graduate from the same school.

just borrow 30 minutes of your time. And I spent a lot of time before that 30 minutes preparing. I had a list of questions. And in that 30 minute conversation, my entire mind exploded. And my entire view of what's possible for me changed because I was able to get with somebody his assumption, like the tribe I was in, the assumption was it's impossible to write a book. It's really hard. Everyone wants to do it. I mean, just all this discouraging thing. When I talked to him, he was operating from a different planet. His planet was like, of course, Of course you can write a book. This is his attitude.

He wrote a book. It was assumed from the beginning that success was absolutely possible. And that was the mindset shift for me. And by the way, I love these mindset shifts and I'm addicted to them. For me, it's about challenging yourself to find somebody who's thinking about it differently. But I do want to point out that it's really, really tough to escape the tribe. Because you love the tribe. They're your closest family and your closest friends.

But I know for me, anytime I want to level up in any aspect, of what I'm doing in my life, I have to expose myself and try to get around somebody who's thinking about things very differently. And my best friends in life are the ones who, frankly, do two things. Number one, they think about things differently. So I'm very curious. Like, I have lots of conversations with Adrian about lifestyle design. These are things he's just much more advanced than I am in terms of my thinking. Number one and number two, friends who will give me the harsh truth. Like, say it out loud. Yeah, you know, I think the way you're looking at that, it's kind of limiting.

I want that. I want that in my life. And most people don't, frankly, there's resistance to it because it's threatening, you know, to be told you're doing something wrong, a confrontation. Can you give an example of a friend who gave you a harsh truth recently? Oh my gosh. It's constantly. It's every day. Well, Adrian, for example, so we've been hanging out this weekend a lot in New York, probably like two yesterday.

But essentially, I have some do-it-yourselfitis, right? I do. I do. I come from a working class, lowering. income family and it's like you do it yourself. You know, and my dad grew up on a farm and the tractor breaks, you fix it yourself. And so I'm not even aware of all my limitations on this. I think at least twice yesterday, he's like, look, dude, you got to outsource that.

He said, what makes you think? It's almost like, are you so arrogant that you think that no one else can do what you're doing? And it's just sort of like, he said it about like that. And I was like, holy shit. Yes, I think so. He challenged this mindset. I was stuck in this idea that I have to be the one to do it because no one else is going to be able to do it as effectively. And quite frankly, that particular activity was taken up like 10 hours of my week.

And I have assistance. I could easily outsource it. But it's a blind spot that we have. When we all have these as we're expanding into certain areas, for me anyway, I would never, ever think about outsourcing things if I just talked to the people that I grew up with and the people around me. Because we're in the same tribe. We're in the do-it-yourself tribe. Right. And so to talk to somebody who's advanced in outsourcing is an incredible asset to me, just as an example.

So what I'm hearing then is that in order to reach that escape velocity, the given that we are tribal people, we need to find at least one other person who can reframe our thoughts. That's right, because that person belongs to a tribe too, right? So that person probably is surrounded by people who believe that way or think about things that way. And what's so amazing is like you're not even aware that tribe exists. You know, like when I was growing up, I didn't know any wealthy people. I didn't even know any business people. So my stepdad sat down and talked to me.

He's like, hey, look, you should become a teacher or go work in a federal prison. Like these are the only stable jobs, work for the government. That was his vision for me because he really loved me. That's it. And by the way, those are great professions. But there's other things to do too. Like these were the only two options that he thought would work. Well, he saw that during the Great Depression, it was government workers who weren't laid off, whereas people in the private sector were laid off.

Yeah, and that's my father. So I'm getting this from my stepfather, my father, my mother, my stepmom. Like, this is the reality because they cluster together and found each other very attractive. It's like, oh, we think of things the same way. And again, nothing wrong with those professions at all. But it's like, there are other ways to do it. And what they had were stories. And I heard this all the time.

And it was sort of like, oh, did you hear about Mr. Jones? you know, it's like, yeah, they went off to start a business. And look, they're crawling back three years later. And you know what? They got to come in at a lower level. They gave up their tenure. All the stories I heard were about failure, entrepreneurial failure. And so as a kid, it's like, it's really scary.

It's like, why would I do that? So it's like a foreign tribe. And the only people you know who tried to gain access to a different way of doing things failed and came crawling back. So it's fascinating how subconscious all of that is because we also are then drawn to people. And this is when we're, when we really haven't had an open mind. Because openness to experience is really associated with success. Like, you need to be open to the idea. And we talk about it in different psychological terms. Locus to control, for example, is another

very, very powerful psychological concept that's associated with success. And this is like the belief that your outcomes in life are primarily due to you, your actions, your inactions, your ignorance, your brilliance, whatever. And the studies we've done, the ultra wealthy had significantly higher levels of that internal locus control. And you want to surround yourself with people like that if you want more success in life, but especially if you want to climb the socioeconomic ladder, advance in work. So you have to expose yourself to people who think differently if you want change. If you're happy in every area of your life, there's actually no reason to do this. It's only if you're feeling like there's something inside of you that's saying, I want something different.

That's when I think it's really important for you to really sort of accept the idea that you're getting what you're getting right now because of the way you're thinking about things. And just if there's one belief that I would want people to embrace, it's that. You're getting what you're getting right now because of the way that you're thinking about things. Yes. You're in a bubble. We're all in a bubble, by the way. So I think the goal is to expand the bubble, like make it bigger and bigger. But you are in a bubble and you have limited thoughts and beliefs about what's real and how to make things happen.

And if you're not happy in some aspect of your life, you're going to need to start thinking differently. Opening your mind to learning about different ways of operating and thinking and believing about things. Okay. But so what is the distinction then? You talked about needing people who are willing to tell you harsh truths. So I think of the example of someone saying, hey, look at Mr. Jones who tried to start a business, and he gave up his tenure, and he gave up so much within his profession, and then he came crawling back. That could be interpreted as a harsh truth that you need to hear for your own benefit, or it could be interpreted as discouragement that's keeping you down, right? same message could be viewed through either lens. How do you delineate between the two?

It's so true. The way we experience things is through our lens of how we see the world. We all can experience the same thing happening, but take away completely different things. We can take away a negative association with the entrepreneur that failed in this example. This entrepreneurship starting a business is the worst thing. If I try, I'm going to be just like Mr. Jones. The other could say, I wonder why he failed. I wonder what happened. Did he take on too much leverage and debt? Did he take a really high volatile industry?

And the timing was bad because if I'm going to do that, I want to make sure I don't end up like Mr. Jones. So what are all the things I can learn about that experience? So it's like same thing happening, but we see the lens through our each background and experience. So that's, I think, what comes with the mindset and awareness of like, what lens are you looking at the world right now? And if we just break it out too,

do you have a pessimistic view of the world? Do you have an optimistic view? Because then that puts you in two wildly different positions. to look at the world to say when experiences are happening, do you see how they can be abundant and fruitful? Do you believe in that? Or anything that's happening in the world is, are we doomed? Is this system rigged? There's nothing we can do. And it really stems from there from locus of control of after you view the world as if you're optimist and you do feel like you have the ability of internal local control. To me, these are things that we're trying to help inspire more people

to have because we believe them. We all have them in this room. And if you are optimistic and have internal local control, that means you can change, you can change. And if you don't even think that way, then all the tools and tactics on how to save and what to invest in are pretty much pointless because of how you view the world. So it first starts with the way you think and your perception. How did you develop a strong internal locus of control? When did you first become aware of that? I have to give credit to my parents on that. My dad immigrated here when he was 13, and my mom also from Mexico, my mom's Mexican, and I watched them work and learned of their pain and struggle, specifically my dad who grew up in poverty. And even though I was born here, I feel like I have

this immigrant mindset that I gained from them, which was we left the bad place. The Brambillas are now in the USA, and this is a place where we can actually put food on the table and build, have a home and build a life through work. And I feel like I got to see this. And I feel like it was definitely a privilege to see this because I know most households don't have this rosy tinted lens on that we can change. So my parents, they worked so hard. I watched them save. I remember I look back at like family photos. My dad always wearing a Toyota dealer shirt because that's where he worked on the weekends. Why are you always wearing that shirt? It's like no, we actually didn't buy clothes for like more than a few years to save money. So I just wore my work

shirt like on outings and stuff like that. And it was like little details I started picking up as I started to ask questions, get older, like, well, my parents, they just worked hard and saved. And they believed that because we were now not in third world Mexico, like, we have an opportunity to, like, create a better life for ourselves. So I grew up with that belief. I still have that belief. And I'm trying to help other people also believe, like, if it's not just the U.S., I think we have more opportunity than because of technology and because of the internet, It's not just if you live in the U.S. Like, if you have access to the Internet,

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So, Adriene, you've talked about your experience as the child of immigrants, which is something that I can relate to as well. We discussed earlier people who grew up in poverty have the deck stacked against them in many ways. How does that all play a role in shaping the basis of the mindset that you adopt and the internal locus of control that you have as you start to build wealth? Yeah. So what's fascinating about immigrants is that at some level, they've taken massive action to come to a better place. So it almost implies to me that they have gotten, past a level of learned helplessness, whatever they were experiencing.

Because there are certain people who did what it took to get here, which for many people is not an easy route. That's sort of a mindset that I think gets passed on. There are a sense of optimism and hope and action taking. Like, I can better my life. And so I'm going to do it. I'm going to take these drastic actions to move to an entirely different country. I don't speak the language or I don't know the culture.

And I'm going to roll the dice because I feel like life will be better there. And so I have some of the wealthiest, most successful. people I know are immigrants, like first generation immigrants. And I just find them so fascinating. I'd like to do an entire, like, study and do a deep dive because the mindset is so incredible. Like the wealthiest person that I know personally, who's a billionaire, came over to the U.S. in like second grade, didn't speak the language. Father had been deceased, so single mom, all sorts of barriers. I didn't have to face it all. The mindset was so incredibly different. So his first job was working in a fast food restaurant. And I sort of think back to this 14-year-old brain, like, what is this kid thinking compared to everyone else who's

working in the fast food restaurant? Everyone else in the fast food restaurant, I used to work in high school, so with kids, is probably thinking, like, oh, I'm going to save for a truck, I'm going to do this, you know, great goals. This kid was like, I'm going to own this restaurant. And then what he did is he became a mechanic, which is totally random compared to his goal, because he realized he could make a good hourly wage. He did that for like five years, saved 95% of his income. Most American, would never, ever consider doing something like that. But what's the bad side of thinking of everything is my fault and you actually start winning? Is that the other side of if everything is my fault and I'm accountable to everything and you

start creating success, you start making money, you start doing these things, there's plenty of successful people who seem to have everything made lots of money, have successful business, then they lose it all. So there are cons if you have this almost blind. it's almost like too much on that side to success bias, confirmation bias or things like, well, I'm very successful for me as an internet marketer. That means obviously anything I touch is going to turn into gold. I'm going to do real estate.

And then you end up doing something that success bias ends up. You're not as diligent as you were in your field. Same thing with money just because you have success in your investments. And then a new shiny object appears the next Bitcoin, the next NFT. And you think, well, of course, it sounds great. and I am smart. I'm already successful. So of course,

I'm going to put a lot of money to that and it ends up losing. So you still have to stay on the grind and the hustle of the success path. It truly never ends. And the shiny objects are always present. I think the more money you make, I think there's now, to me,

bigger, shinier objects than they were. Like when I was making minimum wage, I didn't think about $50,000 opportunities because that was more money that I could even fathom. And now, as we were money, there's always a $50,000. investment opportunity or people hitting us up. And they promise you that the sky's limit. And I've been burned. I invested with a financial YouTuber, real estate guy. And it was 50,000 a couple

years back. And it's the worst investment I ever made. The success by, it's like, yeah, and I did do diligence. It seems credible as a podcast, millions of followers. Real estate guy, I met him in person. So I'm crossing all these things out of the checklist. And this is still my fault. It's not as much as I can blame this YouTuber. It is my fault. So why did I say, still make that terrible worst financial investment I've ever had. I probably won't see a penny back. It's probably the result of the success or confirmation bias. Yeah, now my network is more established. So I'm meeting people like him. He seems like great opportunity. But still, if I was more diligent, if I stayed more on the grind and paid more closer attention, I probably would have

seen all the signs that were probably right in front of my face. So it's like the other side of, if everything is your fault, what if you start doing really, what do you start doing all the things? You listen, long time listeners on the podcast, we're probably doing all the things that they're teaching policy. So it's like, could that also be a bad side? Are you going to just keep hitting your home runs forever? But no, it's unlikely. So you have to stay, you have to stay sharp. So what happens then if you recognize, all right, I, in this example, I failed to do X and Y and Z. And my failure to do X and Y and Z led to the failure of the investment or the failure of the project. It's one thing to recognize that in that given example, you fail to do X, Y, and Z.

it's another to enact the behavioral change that gets you to start doing X, Y, and Z. How do you make that leap? I think pain is a good one to start with. I think we try to avoid painful situation. So, like, being a smart investor, I didn't put $5 million into this deal with this YouTuber. I put $50,000. I put 50,000 because it was enough for like, in case of this worst scenario, which I'm in, I'm not struggling.

But $50,000 hurts. So that pain that is my most expensive learning lesson on how to avoid that pain in the future. So I feel like I can speak to that in many different instances. I've launched and failed many different things online. And the pain is something you want to avoid. So I think that's one way. The other side is the dopamine of having your first thousand or 10,000 in the bank. It's like, what works better for you?

Is it better to think about the pain or is it better to think about the pleasure of success? So if I'm being honest with myself, I see myself more as a conservative entrepreneur, never took on debt or anything like that. And I think it was because I avoided pain. A scenario where the immense pressure of my family, they came from Mexico, they worked so hard for me to like not be successful. That, to me, it's almost like avoiding the pain of disrespecting my whole family tree. So that to me is like actually a pain perspective versus we came here and now I'm going to build something.

I was more of like, I just can't fail. I have to do good. So what I hear is that it has to hurt enough that you learn the lesson, but not so much that it sinks you. Yeah. Yeah, that's so good because I'm sure we all can have similar numbers of what we recommend people to consider speculative investing. Sadly, our numbers here, which are probably on the very much smaller end of your entire portfolio, don't match.

There are a lot of people that we see on social media where they have half their net worth into some crypto or NFT. So it's like to us, we try to operate from that standpoint of knowing, but sometimes you do have to have a painful experience to realize to make a drastic change. I wish it wasn't the case. I wish people could just listen to podcasts and read financial books and just never. go all in on something. I wish people would just do that, but sometimes we have to learn the hard way. Yeah. And sometimes you know better, but then you act against your own better judgment. Dr. Brad, we've briefly touched on, you use the word money scripts a little earlier in this conversation, but we haven't actually elaborated on what those money scripts are. Can you illustrate

some of the different money scripts that people have? Okay. Like nerd out on the research kind of thing? Yeah, exactly. All right, so money scripts are beliefs that we typically inherit. And we use the word scripts because it's almost like a script written by somebody who wrote a play, right? And so the actors just get on stage and they just, you know, read from the script. And you're sort of immersed in the world of this play or this movie. And it's a script that has been written for you. And that's what we inherit.

So we have these beliefs around money that typically dwell in our subconscious, just mine. And so they either come from things our parents said or didn't say or whoever our centers of influence were when we're growing up. They come from our culture. There's a lot of religious-based scripts around how money works and how the world works. And as a kid, you don't really question it. You know, this is reality. You're being taught how reality is. And you're probably being taught a certain set of beliefs that is very functional for your tribe. We've studied these now with about over 100,000 people and we've found four major patterns of money scripts.

So the first one is money avoidance. And these are beliefs essentially where you have a negative association with money. Rich people are greedy. Money corrupts. There's virtue in having less money. So you're actually more virtuous if you have less money. By the way, no big surprise here probably, but these are terrible for your financial health. You're not going to have very high income.

You're not going to have very high net worth if you have these beliefs. Now, how could it possibly be functional? Well, it'll make you feel a lot better about yourself. And so one of the challenges with locus control and taking responsibility, it's painful, as Adrian said. And what's less painful is to blame other people. That's what's so seductive about an external locus of control. Because by the way, plenty to blame. Plenty to blame.

And we're not trying to diminish any of that. There's all sorts of unfairness. But really to transform, you've got to take that personal responsibility. So it's a real seductive trap because if I grew up poor, I feel bad about myself. and I had this experience a lot growing up when I saw people who were wealthier. I immediately felt bad because they could do things I couldn't do. A big one for me was skiing.

Like I could never go skiing. It costs way too much money. So I never could downhill ski. The list goes on and on and on. And if you grow up, you know, poor, you know exactly what I'm talking about. When you grow up wealthier, you're not even aware of people.

This is sort of the privilege thing, right? Where you're not even aware of the struggle of others. So it's a lot harder to get rich than it is to just disparage rich people. And so it's just like an immediate. immediate solution to my problem of having low self-esteem about not having money. It's like, well, look, people get rich by taking advantage. I'm not going to do it. I'm a good person. Those people are not good people. That tribe is evil. And we should eat them. Eat the rich. But essentially that's it. So it's a bailout. But the problem is, of course, with those beliefs,

you will sabotage yourself and you'll probably do it subconsciously. So I've seen a lot of people who start to climb out, make money. And then they're, they come to me because they're like, I just don't get it. You know, it's like I start to do well and then I sabotage myself repeatedly, repeatedly. And when you dig down into it, you will very often run across these money avoidance beliefs that are based in a real experience. There's always a real experience because there are some bad people out there. And so there'll be family stories about what rich people did and greedy people and how they act.

We actually, in our book, start thinking rich. We talk about some of the religious elements, like some religions teach around how it's not good to have more than others. And it really goes back to the tribe where if 100, 150 people, everyone knows exactly what you have, because it's a very small group of people. And if you have more than everyone else, it creates discomfort among the tribe. And so there's lots of pressure to share it. Okay, so this is how we've survived. So money avoidance. So as you talk about money avoidance, a couple of things come up. First, pop culture, media, you see Ebonyzer Scrooge. You see Montgomery Burns on the Simpsons. You see Scroo.

Ruge McDuck, you know, you see all of the villains in movies are the wealthy people. And so in terms of not just the lessons that you get from your family, but the lessons that you get from media, from movies, from television shows, who wants to be the villain of the Hallmark movie? Absolutely. I'm thinking, like, Luke Skywalker, he was in like a, in the desert, in a little hut, you know, versus the empire that has all these resources. So absolutely.

Right. The second thing that struck me as you were talking about money avoidance is that it seems as though underpinning that avoidance. So avoidance is the behavior, right? We want to avoid money. But the emotion that seems to underpin that avoidance is disgust. Yes. And there's like, I don't want to get too gross, but Sigman. Do you want me to get gross? Okay. All right. So Sigmund Freud, who's the founder of psychology, and he did a lot of like interpretation of dream stuff. right so people would come in and talk about their dreams and he'd tell you what all it meant and he said the strongest symbolic connection in dreams and inhumanity is between gold and feces his premise is that this is deeply rooted in our subconscious as a species there's a negative association it's kind of dirty like dirty money money's dirty it's powerful on a deep psychological level and then as you said there's a confirmation bias so there's if you have this belief that the only way to get wealthy is by taking advantage of others. That's the only way. You're going to find countless examples. And you're not going

to even have to look that far. And I'm not here not to say that there aren't a lot of really evil rich people. There absolutely are. But with all money scripts, too, one important element, they're all partially true. They're all partially true. And if you're only exposed to the parts that are true, you'll think it's entirely true. And that's where it becomes dysfunctional. How did gold and feces get linked even in our subconscious minds? It goes, I think it really goes back to the tribe. Because, you know, a lot of religions talk about this, too, where, you know, it's harder to be a good person or, you know, to go to heaven by if you're wealthy.

And I think easier, what, the camel, the easier for a camel to pass through the eye of a needle than for a rich man to go to heaven. That's exactly right. By the way, we pull up a bunch of Bible verses that say the exact opposite around it, too. Right. There's some nuance there. Exactly. And that's really the, where.

money scripts, the health around money scripts comes. It's the nuance. It's the partially true. Because if you can believe that it's partially true, that's fine, but it's only partially true. So essentially there are wealthy people and there's lots of examples of wealthy people who are donating their fortunes to help the less fortunate, who create libraries, etc. What's so fascinating, though, is for somebody who has money avoidance, if you told them, for example, that Warren Buffett is planning to give away 95% of it, immediately, immediately, they'll be like, yeah, well, it's a tax right off. It's, you know, whatever. I mean, you'll find, you'll find reasons to confirm your bias. Well, the only reason they're doing that is very selfish. So, so any evidence that would

potentially disconfirm that is easily shut and pushed away with a confirmation bias. That's how we're naturally wired to hold on to those beliefs rigidly. Right. And that goes back to the, what we were talking about earlier, the distinction between comfort and empowerment, because those beliefs are comfortable. They are. And it's also there's another element and you had mentioned the amygdala in a previous conversation earlier. And it's the emotional intensity associated with the belief. That is really what determines whether or not you can shake it. If you don't have a lot of emotional intensity around this idea that people get rich by taking advantage of others, if I just sit here and tell you,

well, no, not all of them. And you're like, oh my gosh, Bing. Thank you for sharing that, Dr. Brad. What an amazing transformation. It's not usually how it works. And it's because there's a lot of emotion attached to it. And so beliefs are harder to shake when there's emotion attached to them. And what do you do about that? Well, it depends on the level of trauma and poverty that you went through. You might need psychotherapy, quite frankly, to release some of the emotional attachment to that belief.

But I also leave plenty of room for the aha moment. Like maybe this is coming to you at the right time and you're finally ready. You know, okay, I'm tired of living in a certain way. maybe I'll just explore this. And all we need is just like an ounce of, just a inch of daylight, you know, just to get in there. That's really all you need is just to open, even if you could accept that it's one percent is your fault.

You know, what if your marital struggles or your financial situation is one percent your fault? Okay, focus on that. Yeah. Because that's really where the empowerment and change come from. My experience of hanging out with you, Brian, is that the beliefs that I have, and I feel like all of us in this room, we have read more than the average person. and the amount of financial books, self-help books.

I feel like we're probably in the one percentile. And despite having more knowledge than the average person, I feel like I still have the idea that I'm, I still impartially, I have these partial beliefs on the way I think. With the open mind that they could all change if a new path or if there's a better way to achieve success or do entrepreneurship or grow comes along. And I feel like you've challenged me personally on a couple beliefs I had around like what is practical financial advice to get to others as we put our book

together where I was kind of I would say I was like on the extreme side of fire movement living in a van and you had some like so and in the fire movement there is some like hardcore beliefs like no like all the other books are wrong like they do that almost like as a market angle but it's like it's like a cult like culture as well and I feel like being around you I had some resistance as well some beliefs I had that weren't I believe were fully true and they weren't and now I feel like I believe all these things partially. Well, that makes sense in that wisdom is holding multiple beliefs simultaneously that appear on the surface to be in conflict.

That's great. You know, contradictory ideas held simultaneously. Yeah, that's so hard, especially right now it's an election year. So we're seeing, I like to study it from a marketing perspective on communication language that's being done. Politics and the adult industry are actually really. innovative in terms of like new forms of language and advertising. A lot of the industry, like what is a successful marketing comes from there,

it's always interesting how they position the same problems that have always existed. And I feel like with finance, we talk about, we talk briefly one chapter on politics and how too much emphasis is put onto the government and politics like they're going to save us. But the truth is like, in our stance is we don't believe any government's ever going to take you to your financial freedom goal. I think one assumption we have is that we believe everyone should aspire to have financial freedom, the ability to have freedom of choice and not have money problems. Now, being in this position doesn't mean all life's problems are taken care of. But if you can think of like one day operating in a place where you didn't have to have

money problems, I mean, it does take away a lot. But now you have to think of what is my purpose? What am I supposed to do with my life? Because now I don't, I'm not caught up in the normal human struggle of finances. Polarity in language and positioning. I think I'm seeing it right now just on my feet every time I open it because we're, it's a election year and then with the way we talk about our financial book and finance should be really easy it is easy it's like don't spend more than you earn like save and invest it right that's it

but there's so much more to it so we try different positioning on the same foundational concepts and and one of the things that that that you say it's like you might be hearing the same thing over and over again but one person because of their background their experience their inflection their tone of voice or their positioning might be the thing that actually makes you take action. So that's why we're all here is we're trying and we're testing and you might need to hear something a thousand times before then your whole truth becomes a partial truth. And you're like, oh, you know what? That is true.

Like I can see how it can be both good and bad when it comes to any one of the things, financial concepts that we're talking about. All right. So money avoidance is one of the four scripts. Yep. Yeah. And you don't want it. You know, you don't want it.

Right. Trust me. All right. So the second one we found is fairly common in the United States. We called it money worship. And it's putting money and stuff on a pedestal. It's like the concept that I'm not happy now, but I will be happier when I achieve this, you know. Or I buy this latest item.

Then I'm going to feel joy. And this, it's associated with. consumerism and excessive consumerism. People have higher credit card debt and they have lower net worth when they, the more they're attaching their happiness and fulfillment in life to more stuff and more money. And in our book, this is a complicated. Now we're going to talk about money and happiness, Paula, which is very complicated concept. Right.

And it's, it reminds me of like the studies that have been done on various foods, like eggs, for example. Like I remember going through a period of my time thinking, oh, eggs are bad for you, right? You know, wait, now they're good for you. Wait, are they bad? So I'm afraid of eggs. Like, I eat them, but I don't know what the latest research is on it. Right.

Yeah, the cholesterol is bad for you, but the protein is good. But maybe the cholesterol is actually fine because there's some compound in it that's good for your eyes. Yeah, now cholesterol is good for me, I guess. Yeah. Anyway. Same with coffee. Coffee is the same. Exactly.

It's bad for you. It's good for you. It's bad for you. Yeah. And so the whole money and happiness thing, we do believe that more money will make you happier according to the latest statistics related to it. But really, it's not so much about that as it is what you do with it. Because certainly stuff's not going to make you happier.

I think no further than the experiment you had, you know, when you were a kid having a birthday party. Like in that thing you really wanted. You remember what it is? Probably not. But it was life-changing for you at the moment, you know, and you thought this was going to solve all my problems to make me happy. That's what we kind of do in America. And the marketers are really good at it, you know, selling the vision of this is going to give you the feeling you really want. And so it's associated you with terrible financial outcomes, this addiction to stuff.

More stuff's not going to make you happier. It'll give you a short burst of energy and then leave you with debt that makes you miserable that you're trying to pay off for years. Paula, you've traveled a lot. I have two. I lived in other places besides the States. And I feel like if you've only grown up in the States and you haven't yet traveled, this consumption problem that we have to always get the latest, greatest, fastest upgraded

thing. It's actually not something I've learned that is in all cultures. It's definitely a Western culture where we feel like we need to buy things and that is, there's fulfillment in objects, but that's a huge problem in the world. But I've experienced cultures. I'm sure you have two where like they were so happy with less and then feel like they needed to flex or constantly have the best latest things and they didn't even think about it. where like we are conscious of what we wear and, and of how we look and how we're perceived to others, whether we like to admit or not,

I always try to think like, no, I don't care, I don't wear brands or whatever, but I still care. And it's, it's rooted in, and definitely in our Western culture, like how objects are,

like we need them for some reason to be happier. But we're trying to, we're trying to change it. But I think it's a losing fight. I don't know how you feel, if you've ever. experience like a culture like, man, these people seem so great and has nothing to do with objects. It's all the other amazing, you know, experiences of life that they pull from.

In my experience, I look at the consumerism in Shanghai, how glitzy and glamorous. I mean, Shanghai is, it's the Hollywood of China. And then you look at Mumbai and how fancy it is and you've got the best saris and the most opulent hotels. And you look at Dubai, you look at Hong Kong, you look at Macau. There are places, in my experience, all over the world that are highly consumeristic. And so the distinction that I've seen has not been based on geography, but rather on means. Once the means are there, people find ways to spend that money. People find levels of opulence and levels of luxury.

Look at that major wedding in India that just happened, the one that Kim Carrier. Kardashian and Rihanna and Justin Bieber were all at, we're going to be seeing more and more of those lavish Indian weddings as the Indian upper class continues to grow. And that's not specific to India. You know, that'll continue to happen throughout like the Saudis and the Chinese and any other nation that develops a very luxurious upper class. You're right. It isn't geography. It is cultures. I just think of like an example we talk about like status. Egyptians, they were so under their status that they were buried with their stuff, right? So there's this idea of status and objects is not new.

It's been around since time itself. So if you only know one culture that like having a more global view, there's different ways to live. And there are cultures where it doesn't matter that people aren't impressed by the objects or not as easily impressed by it. I think that's why one beautiful way to travel is experienced different ways. of life, you know. Well, that's one of the, you know, I love that about the fire movement, for example, where the brags are, aren't, the brags are entirely different, you know? They're the total opposite. Exactly. They're like, my odometer just hit 300,000. Yeah, yeah, boom,

bump in status, boom. Your status is going up, you know, and if you were a luxury watch to one of those meetings, your status would plummet. Like, nobody would look at you like, oh, look at him, they'd be like, who is this guy? Get him out of here. Yeah, yeah. If you have a nice car, park blocks away. from the fire meetup because it's a good example of how that is culturally contextualized. Right. So who are you hanging out with? What do they value? Like, what are they doing?

Because it's going to have a profound impact on what you do. Right. What I love about that element of the fire movement is that there's a recognition that humans as tribal animals, we are still status driven. So it isn't that the fire movement did away with status as a concept or as a construct, because that's impossible. They simply shifted what qualifies a status, right? So now in the fire movement, it's like, I have an 80% savings rate.

All right, that's status. That's perfect. I feel like that is tactical, practical advice. It's like the people around in your circle, what is the status game for the, is it the designer brands? Like, how many can you collect? How many purses? How many, what kind of car you drive?

Is that really the thing? That's the red flag right there. your savings rate is the status. That's the energy that you want to be around. And then I love meeting travelers. I'm always fascinated by the places you went to. I don't know how dated your website is or if it's up to date, 40 countries. That's amazing.

There's so much I would love to learn about the places you went to. That's something I think about. That to me is a high form of status is like all the places that you've been. So, yeah, finding people that have different ways of thinking about status and aligning yourself with one that is empowering versus superficial. I think it's also healthy to be in a few different subgroups that have different notions of status. So among people who are super devoted to eating clean, right?

It's like, oh, I, you know, I eat cleaner than you. And then among people who are minimalists, it's like, oh, I have less stuff than you. And, you know, people who are into, I don't know, fitness, I work out more than you. So like all of these different subgroups will have different sort of definitions of what qualifies a status within that niche. And by diversifying that viewpoint a little bit, by being in a few different ones, you don't get overly hooked on anyone because anyone in isolation is going to be a little bit too extreme. But by having an array, you kind of modulate yourself while also having something that's different from mainstream consumeristic money. worship. Yeah. It's like you want to avoid the toxic ones. All the ones you mentioned are great. I moved to Austin, Texas three years ago. I met a biohacker. I was like, what is a biohacker? But I started hanging out with

more biohackers. And all of a sudden at night, now I have these orange tinted glasses, which blocked light. And then I got into coal plunging. One of the first splurges, I spent like 15,000 on a coal plunge at my house. And I cold plunge every single day. And part of this my son and coal munch, I do it every single day. And I had no idea of these things before I moved to Austin. That's part of this new circle of people that I'm around. And I feel like at the beginning, once you start building awareness to mindsets and people and recognition, like, well, what is the status game I'm in right now with my friends? That can give you awareness. Maybe you're actually in a great one already, or maybe you need to find other people and change. Now, I've moved in a lot and traveled a lot. That's one way to get in,

but that's, I don't know if that's practical ones. Like, well, just move to a different city. you're bound to meet people, but there's communities online that you can, I think, navigate to and forums and discords and Slack groups and YouTube channels where communities based off creators like yourself, I wonder if you were to ask your audience, like, what is the status game you've created in your ecosystem, what they would say? Yeah. I'll throw that out there for the people who are watching. Leave a comment on YouTube. What's the status game among the people that you hang out with. What is it and what do you want it to be? So going back to four money scripts. So we've discussed two money scripts so far. So one of the money scripts is money avoidance in which

you have these deeply internalized negative beliefs about money. Money is bad. People who have it are bad. And so you avoid money entirely. The other on the surface at least seems to be the polar opposite, which is the script of money worship. Money is great. And I need the Lamborghini and the Rolex. What are the other two scripts? Yeah, so we've talked about those two. The third one is called Money Status, which we've been talking about with a little bit of a twist on it. So money status beliefs essentially equates your self-worth with your net worth. Now, this is the one belief pattern that we saw that was associated with socioeconomic status in childhood. So it's associated also with hyper-consumerism and low net worth and higher debt. And one of the interesting

beliefs or the questions we ask people. They admitted to if you ask them how much money they made, they would probably tell you it was more than they actually do. So they really want to show the world their status. So we're sitting on set here. I don't know if you notice, but there's some books here. You didn't bring them. But it's Gucci, Chanel, Dior, Prada.

This is the status game. Oh, yeah. Up there, Lou Viton, Gucci, by the way, this isn't your house, right? This is in your... This is a studio that we are. rented. It came with the studio. I saw this. I'm like, Paula, what do you do? No, but that is sort of the vision of the money status beliefs. This is the thing that really makes me a passionate creator on Instagram and TikTok and all of this is combating this. Like I said, I grew up low

income and my parents divorced when I was two, so things got real bad for a while. I didn't know how rich people lived their life. And I was attracted to labels. It's because it's an outward display of wealth. So it's like, oh, wow, that person's wealthier. Clearly, they have clothes. They have a nice watch. Look at that car. That's kind of what I thought wealthy people did. And so I got out of grad school. So by now I'm 29. I'm a psychologist. I've got $100,000 in student loan debt. So my net worth was at least a negative $100,000. It might have been more. And the first thing I did is I went and bought a luxury watch because that's what I thought rich people did. I had a buddy who said, dude, man, you're making six figures now. You know, don't you know there's this.

entire culture of luxury watches and nice clothes and people can tell by the shoes you wear. It's so funny. I was living in Hawaii and they actually have luxury Aloha shirts. You didn't know that. There's entire brands that you can spend hundreds and hundreds of dollars. And there's groups of people who know exactly which one you have, right? And it's like, oh, that's this one. And they have limited edition ones, right?

So there's only 500 made. And so there's a whole club. There's all these tiers. I mean, it's so fascinating how that develops in so many different cultures. You have to understand my approach of this research is I'm not trying to prove anything. I'm trying to understand. Like, how does the world work? And so the studies we've done are on ultra wealthy, middle class, low income, and we're asking

about these patterns of beliefs and then linking it to behaviors, net worth, et cetera. And so I want to segue into the fourth money script. And we can talk about the two of them together. This is called money vigilance. And this is the money script that's associated with the highest wealth, the lowest debt, and the highest income. And it's very different than the other three. This is money should be saved, not spent.

It's important to save for a rainy day. I'd be a nervous wreck if I didn't have money saved for an emergency. There's anxiety associated with this. And then this is fascinating too. If people ask me how much money I made, I'd probably tell them I make less than I actually do. I was just so fascinated by it's the exact opposite. And other studies done, like The Millionaire Next Door, Fabulous Book, people have a tendency to downplay their wealth.

And right now we're sort of focused on the self-made millionaire. They describe themselves as frugal. And I mean, that's sort of a profound statement. But think about what it actually takes to climb the socioeconomic ladder. And what I've noticed is that people who are really focused on what they want to buy. All right. So if that's the focus, stuff, they're much less likely to become wealthy. I mean, think about it because they're looking at the next thing.

It's this thing going to make me happier. And that's the pattern for most people, unfortunately, is they're so focused on making more money. and then they immediately once they make that money, they upgrade their life, they upgrade their car, they upgrade their apartment. I mean, the money just goes. Lifestyle inflation is how it's often talked about. That's a status game. That's us by our unconscious wiring trying to increase our status. And it's not what most people do who become wealthy, just bottom line. One of my missions on social media is to utterly disparage people who wear labels and stuff and sort of unapologetically do it. And I know it's a bit of an extreme stance. But people,

People are being lied to so much. And the labels are being marketed. And this is the part that makes me really mad. They're being marketed towards middle class and lower income people because they know they're the ones who really want to raise their status. And for really good reasons, you know, it makes you safer in some neighborhoods to actually show outward displays of wealth, which is a mind-bender for some people. What do you mean safer? Well, I'm telling you, if I live in a dangerous neighborhood, I'm now showing you that I'm an important person. So maybe you shouldn't mess with me.

Maybe I've got friends. Maybe I can defend myself, et cetera. So, and again, this goes all the way back to like, Vikings would do this too, right? They would display their status with outward displays of wealth because it was a protective factor. But on social media, people are being lied to all the time. And then what it creates a sense of relative deprivation is what we call it in psychology, where I'm instantly starting to feel deprived because I see you having more than I have,

makes me feel bad. And so that I want to go spend to try to raise my status. so I don't feel as deprived. So it's some of that subconscious wiring we have. And the big irony is that the wealthiest people actually downplay it, and they're less likely to have those labels. And invariably, the confirmation bias comes out. As I say it, I'm just reading through all the comments.

I get, what about the Kardashians? What about this? They flex labels. And it's like, look, we're all influencers. Like, we made sure that there's no labels on it. Unless we own it, we don't wear the label. Unless we're getting paid, we don't wear the label. But again, I think that's how things get marketed to people that creates

fabulous streams of revenue for people want to make money or want to sell a get rich quick course. Those are the ones usually leaning up against the Lamborghinis. And that's just not what most wealthy people do. And I'll give you one example of a study that blew my mind. We looked at a group of people that had $11 million in net worth. And we compared them to a group of people that had $500,000 in that worth. So that's solid, man. You got $500,000 net worth. You're doing great in the U.S. But these people had like way more money, like 20 times more money. And we just simply asked them, how much money did you spend on your last? house, watch, vacation, and car. And I was blown away when I saw the numbers because these people

had like around 18 to 20 times more money, but they only spent twice as much on those things, which is fascinating and mind-blowing for me. And again, most of them are self-made and you got to think, what is the mindset of somebody who's a self-made millionaire? And frankly, they get, their status game is what percentage am I saving and investing, you know? And they also have a little bit of nervousness. That's the vigilance. They're concerned about the future. They're worried about the future. They're thinking about the future. And I'll say one more thing about it because this will make a lot of people upset. And just understand, I love you. I love everyone who's hearing this. I'm not trying to upset anyone. But they've done studies on meditation. And I'm a huge fan of mindfulness

meditation. We actually included in our initial treatment programs around people who struggle with money issues. The more you meditate, the worse your net worth is. What? Yes. Yeah, the lower your net worth and the worse your investment decisions will be. Okay. Wow. Yes. No, no, I just made a bunch of people upset. By the way, you'll live longer. You'll be happier. Okay. So, all right. So, but the quote, problem that really illustrates the money vigilance is that think about meditation. What's the goal? Where should your attention be in meditation? On nothing, on being centered. In the present moment, Paula. Right. Right now. So how are you feeling right now? How would it? feel right now if we had a really expensive lunch? Wouldn't that feel really good right now? That would feel good, right? Let's focus on the next. Don't worry about the future. All the pain and suffering is because you're worried about the past for the future. And I get that psychologically. Unfortunately, if you want to grow your net worth, you got to worry about the future. You have to have a future orientation to a degree. The hack is, just so that we can make everyone happy is automate

before you meditate. Because once you start meditating, you know, you're focused. You're focused. this is going to be here. And by the way, these studies were done immaculately. So it's like they took people who never meditated, same result. They asked people how many hours they meditate. They ran the analysis. The more you meditate, the lower your net worth, essentially. Wow. And the worst your investment decisions. And really, the message here is that automate before you meditate, you got to be somewhat worried about the future, future orientation. I mean, why would you delay gratification? What a ridiculous thing to do. We're not wired to do it. And so we've done some experiments to get people to save more.

And that's really what we did. We got them to get really clear visions of what they wanted in the future and got really excited about this clear vision of what you want in the future. That's what sparks the willingness to delay gratification right now. Wow. So be anxious. Yes, yes. Be anxious enough to identify what it is you want, what your financial goals are, name accounts,

set them up and then automate movement towards those money accounts, then just go to a meditation retreat and let it all go. And just let that automation make you a multimillionaire. Be in the moment. Be healthy. Wow. Automate before you meditate. I should trademark that.

You should. You probably bought the URL while I was mentioning that. I did. That's good. Had you heard that before? No, this is a hot take. Yeah. I'm trying to decide if I'm going to like attach myself to Fred's name or like.

Separate episode. Deny knowing him. Yeah, it's like, dude, how many people listen to this and do yoga and meditate? That's wrong. Well, automate. Then do your yoga. I was just kidding. No, but it makes sense.

Let's do another hot take. Ready? Ooh. We were talking about how the bad side of the fire movement. Mm-hmm. And how might fire financial independence retire early. Sometimes it's fired. Financial independence retire early depressed.

Mm-hmm. And so that was an Uber ride on the way here, by the way. Oh, wow. Yeah. We were talking about that. And this is one of those things where I was talking about early, how I didn't have this perspective and I thought I was fully right following this extreme side of the fire movement until working with Brad. And that there's problems that occur when you have sacrificed your entire life, lived off dollar cent 99 McDonald's burritos and are living in the basement somewhere and just going extra cheap.

And all of a sudden you hit your financial freedom goal and you can live off the income of your investments. but you don't know how to live because you make that switch from this extreme part of sacrifice to now, okay, I actually am financially free, but now I can't enjoy this money. I'm still going to keep this path. And you never figure out your like a deeper question, like your sense of why, what your purpose, how do you live? And it's not something that's just for the fire movement. It's a huge problem when people retire.

People stay working way too long and it affects their health. There's statistics on when people finally retire and they die shortly after. they're completely healthy. It's because it's like you lack sense purpose. Or even a very specific example of my parents, I hired them a few years ago, and they just started taking Social Security, so they're working part-time for me.

And they, because of how much they worked, and it's like they're working full-time, almost, with the amount of income they have. And they cannot spend money. They are struggling to spend money. I am trying my best to come up with these weird things. I would never do, but to try to encourage them to spend money, I say, like, mom and dad, if you guys leave me enough money to buy 10 Lamborghinis, I'm going to just waste it all

Lamborghinis. And I thought that was like enough incentive for them to spend, but nothing changed. Then I was like, you know what I'm going to do? I'm going to spend all your, the inheritance that you give me. I'm going to give it to the opposite political party that you guys like. I don't know the results yet, but I know that they're struggling to spend money, like doing small things like when they go on a flight, they can and should get first class, but they're not because it's too expensive. The one thing that is starting to become pet peeve is like I love spending lavishly on my family and taking it to like super nice restaurants, Michelin Star if we can.

And my dad doesn't matter if it's the best stake of his life. It's like the answer is like, how was it? Too expensive. Too expensive. So this is not just a fire moving problem, but an idea that we talk about a lot is like, well, you still have to figure out how to live life. And so sometimes the financial, the fireman, it's like these people, they sacrifice so much. And then it's almost become a personality trait to be cheap.

Like they can't actually live. So it's like the art of living. Right. Yeah, it really is. And that's something when you've spent your entire life saving, you know, earning and saving. It's so hard to flip that switch. In part, there's a, you really have to have confidence that money is going to be there. I think there's an underlying fear of, hey, I'm so used to accumulating and preserving.

I can't now draw down. That's the opposite of 50 years, 60 years, 70 years of training. And then I think also your net worth being associated with your identity. So it's like you've now gone to the point where you can't afford nice things, but it's like taking, like if you're spending money, you're like taking away from your identity because you're watching now your net worth maybe decline or not grow as fast or be stable. So yeah, this is a real funny problem that you work so hard to get. And then you realize it's not a problem until you're there.

And now you have to figure out what does your best life look like? If you don't have to worry about money, it's getting to the point where now you have to figure out how to live your best life. And how do you feel good about spending money on things that bring you fulfillment? I feel like most people I talk to who have reached this place of financial freedom can agree that one of the best ways to spend money is by gifting it, making an impact, donating, like creating causes, creating communities. And another part, I think, is experience.

And that's something that I relate a lot with the fire movement is like, spend money on a $5,000 bag, no. But go on a trip of a lifetime, absolutely. But you make a good point in that if a person highly identifies with their wealth, your net worth is your self-worth, right, which is one of the four money scripts, then doing anything that decreases that net worth also decreases your self-worth. And actually, that would work regardless of whether you're the one who chose to spend money

or some external event took place that caused your net worth to decline. So perhaps the market dropped. Perhaps you had a business partner who stole a bunch of money from you. Perhaps you grew older and had some level of dementia and you fell prey to an elderly scam. all of these things, whether it's theft or profligate spending or some combination of the two, diminish your net worth. And when that is tied to your self-worth, that is then an attack on your core self-identity. Yeah, and it's really dangerous. First of all, I wish everyone had the problem of the fire movement, by the way. It's the good problem to have. So the bad problem to have is

to invest nothing. The good problem to have is that you're investing way too much. But really, it's a good example, too, of the money vigilance being associated with higher net worth, higher income, lower credit card debt. I mean, fabulous financial indicators. But it's only part of the truth, too. These people who are high on money vigilance, these people, which is me, by the way. This is an issue I have, frankly, that I'm still trying to unwind is this anxiety about not having enough.

I remember actually being in couples therapy. This is true confessions, right? So on the other side, so my wife and I are there. this therapist who I love dearly terrible with money by the way so I was like what do you got to tell me about money you're a therapist most therapists are bad with money but he literally got to the to the heart of my belief he's like Brad hold on a second are you worried about being poor and I realize oh my god I am I'm terrified of being poor he goes you do realize that there is really no scenario in which you will be poor again however your stress about money could kill you

And it was just sort of like, oh, I mean, that was a transformational experience for me because I don't want to die, Paula. I got young kids. I'm not ready. And I realize it's true. By the way, it's true for everyone, like in the United States, whether you're poor, whether you're rich. You're probably not going to die because of money, but the stress around money can kill you.

It's like eight or nine out of ten Americans, money is the biggest source of stress in their lives. And so for most Americans, I think it's because they can't make ends meet. So we're really wanting to help people with that. it just doesn't melt away. And I think this is the important thing. There really is no amount of money that's going to hit your bank account that is going to transform your experience of life dramatically and all the sudden make you happy.

All the sudden, your problems are melted away. I do know a lot of people who have achieved massive success. And along the way is nothing but wreckage. So their relationships have been wrecked, their health has been wrecked, their kids won't talk to them because they were workaholics. obsessed with work, never around. They weren't taking care of things that actually do make you happy in the long run. And so it's about the partial truth thing.

Money vigilance. Money should be saved, not spent. Well, no, it should be both. It should be saved and spent. That's been part of my personal evolution. And my wife has really helped me with this, by the way. So another thing is that people who are married and in relationships have healthier money scripts in general. And I think part of the reason is because you got somebody,

looking at what you're doing around money and saying, what are you thinking? You know, why are you spending on this? I mean, you're sort of confronted with this and it helps you adjust, ideally, and expand. For example, my wife, when she and I first started dating, I had lawn chairs for furniture like I did. I had a mattress on the floor, lawn chairs for furniture.

She's like, well, maybe we should get a couch. And I was so anxious. Oh, my God, she's going to blow all my money. Couches are comfortable. Paula, you know, if you don't have one, you should get one, this is comfortable. And that's part of my evolution. around not being so vigilant.

Because, again, it was really intense, fear-based. And that's really no way to live. I wish everyone had that problem versus the others, and we could work on that. But it's really about balance. Part of it is it's important to save and invest for the future. And also, don't wait until then for you to start learning how to enjoy life for lots of reasons. You could die as soon as you hit retirement.

So it's about balance, really. So it's all about balance. Well, thank you for spending this time with us. Tell us about your book. Where can people find it? Why should they read it? What's it about? Our book's called Start Thinking Rich. And we actually have a special offer. This is really thank you for you and collaborating with us. We've been doing so many podcasts and you were recommended by so many. So what you do, you're making a huge impact in the world. So we want to give back to you and your audience. So we have like a special page. So start thingarish.com slash Paula

is where your audience should go to. And so they'll get the book. We have an amazing community and resource, but they get a lot of extra bonuses if they go there. Amazing. What kinds of bonuses? So I think when you take on a new learning of a book, and I'm an avid reader, one of my favorite things you do is try to get like the tools and sheets. And although you maybe have put your numbers in budget calculators and all kinds of tools and things, it's always good to do a foundation refresher.

But I think we have our own little twist of things that think about this conversation where it's like the tactics, the strategies, the mindsets, and also this part at the end that we discussed was like the art of living. So a lot of the resources are based on lifestyle design, plus the nitty gritty of, dare I say the word, budgeting and planning. But a lot of what we talked about and practical takeaways that are going to go very good with the book. Perfect. Excellent. The URL is Startthinkingrich.com slash Paula. Startthinkingrich.com slash Paula. Well, thank you. Thank you so much again for taking this time with us.

Thank you.