Afford Anything - Your Goals Might Be Killing You (Literally), with Sebastien Page

Episode Date: May 23, 2025

In 2005, Sebastien Page nearly died from a mysterious bacterial infection that doctors couldn't diagnose for a week. A single observant physician noticed cuts on his toes from running in wet terrain and connected the dots. The experience forced Page to confront mortality — and completely changed how he thinks about goals. Page, the chief investment officer at T. Rowe Price and author of The Psychology of Leadership, joins us to share why traditional goal-setting might be sabotaging your happiness. He explains how 80 percent of millennials say they just want to get rich, and 50 percent want to become famous. But research from Harvard's 80-year longitudinal study reveals something surprising: people who climbed the social ladder weren't meaningfully happier than those who struggled financially. The real predictor of long-term happiness? The quality of your relationships with others. We explore the dark side of goals through a concept called "goal-induced blindness." Page uses Mount Everest as an example — climbers have a 4 percent chance of dying, the same odds as eating four poisoned gummies out of 100. Yet people still attempt the summit because they become blinded by the goal itself. Page shares his own experience with goal-induced blindness during his demanding career in money management. The relentless travel and pressure contributed to his near-fatal infection in 2005. He learned that working less actually made him more productive. We dive into Page's framework called the "three Cs": core beliefs, curves, and control theory. Core beliefs are the filters through which you interpret the world — like whether you trust people or believe money should be spent versus saved. Curves refer to stress management, based on research showing optimal performance doesn't happen at zero stress. Control theory teaches you when to exercise "strategic patience" versus making quick decisions. Page also introduces the PERMA framework from positive psychology: positive emotions, engagement, relationships, meaning, and accomplishment. He calls the last four "proteins for your soul," while positive emotions are more like a sugar high. The discussion covers practical applications for everything from hiring decisions to relationship choices, using mathematical concepts like net present value to make better life decisions. Learn more about your ad choices. Visit podcastchoices.com/adchoices

What if your goals are actually making you miserable? Today, money manager Sebastian Page joins us to explore why traditional goal setting might be sabotaging your happiness. Sebastian Page is the chief investment officer at T.R.O. Price and the author of the Psychology of Leadership, and he talks about how something called goal-induced blindness can cloud your judgment, and he also reveals what Harvard's 80-year study reveals about what really drives long-term fulfillment. Welcome to the Afford Anything podcast, the show that knows you can afford anything but not everything. This show covers five pillars. Financial Psychology, increasing your income, investing, real estate and entrepreneurship.

It's double eye fire. And today's episode, even though we are talking to somebody who is firmly in that letter eye of investing in terms of his job, we're not going to be talking about investing. We're going to be talking about the letter F, financial psychology. So he's got the investing chops. He's a chief investing officer of Tiro Price. but we're going to go beyond money management. So he's the head of global multi-asset.

We're not going to be talking about asset allocation. We're going to be talking about life allocation. But within that, many investing concepts come up. We talk about net present value at the high-level philosophical sense about what this concept means, this concept that comes from finance, when we expand it out and apply it more broadly to how we make decisions in life. With that said, here is Sebastian Page. Hi, Sebastian.

Hi, thank you for having me. Oh, thank you for being here. Sebastian, in 2005, you nearly died. Tell us about that experience. It was very mysterious. I started getting shivers and I had no idea what was going on. I started shaking all over. I decided to try to wait it out.

It didn't get better. I was rushed to the hospital. I spent a week there, and I don't know, Paula, if you've ever seen the show, Dr. House. I haven't, no. It's a show about medical diagnoses, and it's always a mystery what's going on with the patient. Well, I entered my own personal Dr. House episode. They couldn't diagnose what I had. The fever went through the roof.

I started getting abdominal pain unexplained. I got about five diagnoses within the first 12 hours. I ended up staying a week at the hospital. At some point, one very attentive doctor might have cracked the code. He was, of all things, looking at my toes and saw some cuts in my toes. And he decided that perhaps the diagnosis was, I'd been, he looked at me and he said, have you been running outside? And I said, yes, I've been running.

in wet terrain. And the diagnosis was probably, we never really find out, a bacteria. And so, you know, bacterias can kill you pretty quickly. Some of them are very dangerous. They didn't know which bacteria. And on and on and on and on. At the end of the episode, I started getting better with basically carpet bombing my bloodstream with antibiotics, right? Everything they had. And the doctor came at the end when I started getting better. And he said, you know, Sebastian, We have some new antibiotics that really helps you here, and I don't think you would have made it three years ago. So, you know, it made me pause and think. Philosophers say you should think about death.

It sounds very depressing, but it can actually be uplifting. It's counterintuitive, but it helps you put things in perspective. It helps you think about long-term goals. Right. There's that momento mori. Have you ever written your own obituary? because I know that's one of the tips that people sometimes suggest when it comes to figuring out long-term goals. You know, I have not gone through the exercise of seriously writing it, but I have thought a lot about what I want to think about at the end of my life and what will make me feel like I've achieved something that was meaningful.

I think meaning is incredibly important and underrated in people's lives. I think the quality of people's relationships might be the most important thing about long-term happiness. And when they interview people in their debt bed and they ask them, what do you regret the most? It's usually not spending enough time with loved ones. It's usually not emphasizing positive relationships enough. it's very rarely, I wish I'd made more money. Let's take a step back and talk more broadly about the notion of goals, because certainly there are many people who associate the word goal with a professional connotation.

Yes, there's much more to goals than professional goals or financial goals, which I know you talk a lot about in your show. When I think about goals, I think very long term. and I connect this to positive psychology in the science of happiness. Here's the thing. You talk about money a lot in your show. If you ask millennials what their long-term goals are, the surveys are a little bit depressing.

80% say they just want to become rich. 50%, which is a large number, say they just want to become famous. And when you step back and you ask, what really is the most important, most meaningful goal that someone should have for their lives? It really shouldn't be about that. I don't want to dismiss pursuing healthy financial lives, pursuing conventional measures of success. There's a very famous study from Harvard. It's been going on for 80 years. It's fascinating. There's no study like this. It's been several

generations of researchers, they asked people throughout their lifetime from very young age until the end of their lifetime, how they're doing. And they would send surveys constantly. And what they saw was that the people that climbed the social ladder, those millennial goals, the people that made more money, the people that had conventional professional success, were not meaningfully happier than those. who had the opposite of that, who went into poverty, who maybe went to jail, who just didn't hit those conventional notions of success. Now, to me, that's fascinating, and it's very, very counterintuitive.

But the study really shows this. It's a study that's been ongoing for 80 years. They followed a lot of people, and they concluded that the number one factor of long-term thriving, long-term happiness was the quality. of one's relationships with the people around them. So you could be in a tough situation in your life based on conventional measures of success, but if you still have quality relationships with people around you,

it makes a world of difference. Why do I mention a long-term study on happiness when you ask me about goals? I think that we have to connect positive psychology with goals better than we are in our lives, But also, in business, what's the meaning of what we're doing in business? How do we define happiness in business? And does it matter?

How important is it that we have productive quality relationships? And by the way, by quality relationships, I don't mean agreeing on everything. I mean having enough trust to be able to disagree in a constructive way. That's super important in what I do in money management, for example, because we'd really want to try to get to the truth or try to get to the best forecast we can make about what's going to happen. So there's a missing connection in my mind between positive psychology and goals in general, whether we think about goals in our lives or whether we think about goals in business. You know, you mentioned positive psychology, which is a field that Martin Seligman is

highly accredited with creating. What is the distinction between positive psychology and the rest of the field of psychology. Positive psychology is about how can you thrive. It's described as the science of happiness. When we think of psychology, we think of mental illness, which is a real important issue now because trans and mental illness globally are not moving in the right direction. But positive psychology is the other side of that, and it's a giant field. There's a lot of research there that's unexplored for applications in our lives or in business or in leadership. I think it's fascinating. And there are questions such as what makes people happy in the long run. And we've been talking about positive relationship, but also the notion of engagement, the notion of

meaning, and the notion of long-term accomplishment. All these ingredients we get from positive psychology are relevant to setting goals and thinking long-term about happiness. You mentioned earlier that the Harvard study, the big longitudinal study, did not find a correlation between your level of resources and happiness. But I've heard of other studies that have shown that there is a strong correlation up to the point at which you're able to cover your basic bills after which there become diminishing marginal returns. How do those two meld with one another? That's right.

So below a subsistence level, lack of resources becomes a huge problem, and it impacts the quality of your life and your ability to thrive. Some of the studies, the earlier ones would say it's about $60,000 a year. The amount changed a little bit. There's some counter studies that say your happiness can continue to increase. where I'm going here is that, yes, there is a subsistence level that's super important, but then beyond that, we overemphasize financial goals over positive psychology-related goals. And that's why I'm trying to change a little bit with the book.

All right. So what should a person do? If a person's listening to this and they're thinking, all right, I would like to embrace some of the lessons from positive psychology. I'd like to develop a set of goals in which money is a tool that I use to facilitate a happier life, but it is not the end in and of itself any more than a hammer. Buying a hammer is a tool. It's not the end in itself. I would start by thinking long term, and you ask me if I've ever wrote my obituary. I have not, but I've been thinking about what I want to achieve throughout my lifetime.

So this notion of long-term accomplishment, I would say look for activities, situations that maximize your engagement. And by engagement, I mean, you're involved in something that you have the skills to achieve, but it's not so easy that you get completely bored just scrolling TikTok, right? That might relieve boredom in the short run, but in the long run, it actually increases. boredom. And so it's not too easy, but it's not too hard also because there you get discouraged and it's not worth it. So generally speaking, try to set goals that will give you a high level of engagement. And then circling back to what we were talking about, favor time spent on quality relationships and learn to get better at relationships. And by the way, that happens in business a lot.

There's a lot we can do in business, in organizations, or maybe in sports teams, maybe in church, maybe different areas of life. How can we set up a culture where we nurture positive, trusting relationships amongst ourselves? That's super important. So those are all practical ways of thinking about positive psychology. The one thing I want to say, though, because we've been talking about goals, and it's a very traditional way of talking about goals. Goals are great. They give you direction. They mobilize organizations. There's a very dark side to goals. And that's counterintuitive, but I cover that dark side quite a bit. There's something called goal-induced blindness,

which is well-documented in psychology. And the best example that's used is the deaths that occur on Everest. And there's a goal-induced blindness there. People forget their own safety. They put the blinders on. They forget their sense of ethics sometimes in business just to reach the goal. So goals have a dark side too. Right. And what was the goals gone wild? That was a famous paper. Can you tell us about that? That was a paper by researchers in psychology. And it's exactly that. They found that goal-induced blindness is real. And it happens. In business, there are plenty of examples with companies that started cheating just to meet their quantitative, measurable goals. There are plenty of examples in life where people sacrifice their well-being just to achieve

the goal. Early in my career, I had goal-induced blindness. I was working in money management and I was building capabilities that were in high demand throughout the world and I felt important. I was asked to go to Japan to make a presentation to a large institutional investor, you know, people that control billions of dollars or yen in that case. And I just felt like what I was doing was super important, and my career was on the fast track. I was traveling nonstop.

And you opened with the story of I almost died in 2005. It was partly I got this infection, this mysterious bacteria. Because I was completely run down. I had goal-induced blindness. And I wasn't being as productive as I could be. When I learned to rest and take time to myself and sleep better and eat better, I became more productive by actually working less. So goal-induced blindness can lead you in a dark alley where you're just not being careful

about how you handle your life and you become exhausted and you burn out. Right, right. One example, I think a prominent recent example, were the Wells Fargo employees that were opening fraudulent accounts or fake accounts in order to reach account quotas. Yep. It's a great example, right? There was a goal which was increased a number of accounts.

It was measurable. And measurable goals are especially dangerous for goal-induced blindness, right? because you can see where you stand. And what they did was, I mean, for example, I was looking to get a mortgage and I was asked to get a bank account. And I thought that was weird. You know, why do I need to get a bank account?

Why do I need to open a bank account? And, you know, the company got in trouble for that. And many companies get in trouble when they get goal-induced blindness. Right. Well, and in that case, I mean, if they simply asked you to open a bank account and you agreed to do so, then technically there's nothing wrong with that.

Yeah. It's the opening accounts in people's names behind their back without their knowledge. Right, right. And that can go even further. Yeah. Look, I think of Everest a lot when I think of goal-induced blindness. And it's an example I use. And I have a thought experiment, and maybe I'll do the thought experiment with you for your listeners.

So suppose I give you a jar with 100 gummies. Mm-hmm. And I tell you that four of those gummies have poison in them and they're going to kill you. So four out of a hundred gummies. And I ask you, Paula, would you pick a gummy and eat it for a million dollars? No. A billion dollars. No.

And a lot of people would. And what's interesting is that if you want to reach the summit of Everest, you have a 4% chance of dying in the process. Statistically, based on all the data on Everest climbs. That's the four gummies out of 100. I actually use a Russian roulette example, but it's a morbid example anyways. Right. But my point is this is an extreme example of,

why do you want to climb Everest if you have 4% chance of dying? Right. You know, you have to be a little bit blinded by the goal. Right. And there are a lot of Everest tour operators who, in an effort to keep their clients safe, will try to reframe it such that the climate itself is the goal rather than reaching the summit. But of course, that's difficult to do. And I agree with that. And there are people, I think the world record is over 30 summits.

But those that are really good at keeping themselves safe are really good at quitting. They know exactly, they don't have goal-induced blindness. know exactly when they need to quit and turn around. That's a skill that's vastly underrated in all aspects of life. In business, might be one of the most underrated skills in business. Annie Duke, she's a fantastic author. She wrote an entire book titled Quit about how underrated quitting decisions are. I know it. I see it in my business. Sometimes we just invested so much in an initiative. we're very, very hesitant to quit and to focus on better opportunities, even though what we've learned by now is basically telling us, we call it sunk cost, is basically telling us that it's not

going to pay off. And so for business leaders, it's a big deal, vastly underrated skill when you quit. Right. Annie Duke has been on this show several times, probably two or three times. So my question about sunk costs then, and I'm particularly interested in, in your experience as a money manager in this regard, it can be easy to rationalize sunk costs by looking at the heavy upfront costs associated with an alternate project. You know, when you're considering quitting Project A, which has a bunch of sunk cost and moving to project B, the upfront cost of initiating Project B can be heavier than the ongoing cost of continuing project A.

How do you do that calculus in your head? And it's counterintuitive when you think about it. But the reality is that, and this is a finance concept, it's a money concept, net present value, right? What is the present value of the future prospects for that project? And if that is negative, it doesn't matter how much you've invested so far. you can still switch maybe to your point a higher cost project, but that has a positive net present value.

In other words, the future benefits of investing in this are greater than the initial cost, even though the initial cost looks great. So it's this wonky finance idea of net prison value, and Annie Duke doesn't really frame it that way, but that's to me the best way to avoid the sunk cost fallacy. Look, to put it in an even simpler term, you need to look forward, not backward. Based on what you know now, based on where you are now, what is the best decision to make. By the way, this goes beyond allocating to projects and business. We have many situations in life where we might need to switch. and Annie Duke talks about this if you're in a career that you're not happy with, but you've invested so much in that career, your tendency will be to stay even though you'd be happier if you looked forward and the exercises, how will you feel five years from now about that decision today?

And then when people start thinking that way, they realize, maybe I should switch. Right. In what ways can you deeply internalize the concept of net present value into your life? You touched on this when you talked about the career, but it strikes me that there are other ways to use net present value, not as a mathematical equation, but as a philosophical rooting when it comes to creating a framework in terms of how you view relationships, how you view, I mean, any aspect of your life, your health, your, all of it. I love that question, Paula, because both on your show and what I do, I cut across money and finance and life. And that's a framework that is kind of borrowed from money and finance, but that has huge applications in all aspects of life. In fact, I could maybe go as far as you might have given me an idea for my next book. I just love it because net prison value, first of all,

I grew up around it. My father was a finance professor. And if you're in our field, it's something that you grasp very easily. But in life, in life, it really matters. And the rule of thumb is look forward, not backward. The other rule of thumb is, Look at the net benefit of what you're doing now. And in terms of over time, right? So you need to start thinking longer term. I think that framework that we're just inventing on the fly here could be fleshed out, but is that you're looking forward.

Net prison value forces you to look long term, to look at the benefits over time. and to trade off sometimes short-term pain for long-term gain. That's also a net present value concept. And we're just talking about careers and talk about Andre Agassi. In my mind, one of the best memoirs ever written is open by Andre Agassi. I'm not even a tennis fan, but I just couldn't put it down. Andre Agassi, absolutely his entire life, hated playing tennis and was deeply unhappy about playing tennis for most of his life and became much happier in his post-tennis life. So if Andrea Agassiz had made a present value calculation at some point in his career, maybe the world would have lost a great tennis player, right?

but he probably would have quit tennis earlier and led a happier life or thrived more in his life overall. And so the career decision is one of net prison value. The quit decision is one of net prison value as well. So there are many ways to think about it. I love that you ask that question. I didn't expect it at all, but I really like it. Oh, thank you.

Thank you. So then he would have been happier if he had quit earlier. Oh, absolutely. If you read his memoir, there is absolutely no doubt that he would have been happier. He was not happy as an elite tennis player. I'm sure there are elite tennis players that are super happy. And being an athlete is stressful, but can be very fulfilling life. But for him, he just hated it.

He couldn't handle the losses. And so why did he stay in? Was that a rational career decision? Was he looking at the value of having additional wins under his belt, you know, doing well in the 96th Olympics so that he could then trade on that for the remainder of his career? Yeah, that's a tough question. He doesn't really answer it in the memoir. Why did he stay in? I think if I had to guess, it was a combination of some goal-induced blindness.

You just see the goal and you want to win another grand slam and you keep going because you can measure the. that and you just put your blinders on and nothing else matters than the goal. Perfect example of goal-induced blindness. I also think that like many of us, he might have stayed for the money and for other conventional measures of success, including fame. But I can't speak for him. But, and again, my message here is not, if you're doing really well on conventional measures of success. You're an elite tennis player. You're an entrepreneur who's making lots of money. There's absolutely nothing wrong with that. And it doesn't mean you'll be less happy either. But in this example, he was very unhappy playing tennis. And a net present value calculation, which is not really a

calculation, but a frame of thinking, I can't speak for him, but I think based on the memoir, he would have had just a better life that way. But I don't want to go on and on about money. He's not important. And we kind of fall into that trap, too. Conventional goals, measurable goals can be really important. It can be really motivating. They can move organizations. I use them in my business.

There's absolutely nothing wrong with it. It's just not all there is to it. Right. Yeah. And, you know, I'm glad that you said that because I'm often struck by the observation that so much of the time conversations about the intersection between money and happiness can be painted in this reductive manner in which they're presented as mutually exclusive. So a statement like, well, I'd rather be happy than rich has the implication that the two

are mutually exclusive, right? When in fact, I think what we're trying to establish is not that they are inversely correlated, but rather that they are not correlated. Exactly. Exactly. I couldn't have put it better. They're not mutually exclusive at all. you can be, and by the way, for a lot of people, it can make them super happy to make more money. That was myself for most of my career. And so, again, in aggregate, on average, across people, across situations, I'm much more comfortable saying, like you just said, that they're uncorrelated than they're mutually exclusive.

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IKEA.ca.ca.com slash Black Friday. Ikea. Bring home to life. Earlier, you touched on being fully engaged and you touched on relationships, and it strikes me that both of those are part of this broader acronym. The acronym is Perma. Yes. Walk us through that acronym because that's a framework for positive psychology. First, a disclaimer. I don't like acronyms. I'm in business, we use too many acronyms, and in finance we use a lot of them. In technology, we use a lot of them. But this one is my favorite. It's a summary of Marty Seligman, the father of positive psychology's thinking.

Herma stands for positive emotions, engagement, relationships, meaning, and accomplishment. the big finding of positive psychology is that long-term happiness, your ability to thrive over your lifetime, is much more driven by Irma, engagement, positive relationships, meaning in accomplishments from a long-term perspective, than day-to-day positive emotions. And what's interesting is that some people are wired to experience more positive emotions than others. And on the negative sides, some people have almost genetically, through depression, for example, have very, very little ability to experience positive emotions. But Seligman explains that with engagement in your life, positive relationships,

meaning an accomplishment from a long-term perspective, you can still thrive. And so I love that model. And I've organized it to link it to setting goals, setting goals that maximize Irma. And I have plenty of stories around those and examples and research for how to maximize Irma. And it's one analogy I use, it's, you know, in nutrition, you have sugar, which is not really, good, but makes you feel great in the short run. And then you have proteins and healthy fats. And so I describe Irma as proteins for your soul. And P, the positive emotion, there's nothing wrong with them, right? Good glass of wine, laughter with friends, but they're kind of like a sugar

high. When you talk about people being wired in a certain way, the finding right now is that about 50% of our happiness is a genetic set point, and the other 50% is more within our control. So in terms of the nature versus nurture debate, it's about half and half. Yes, and it's kind of really sad when you think about it, right? If you just focus on the P, the positive emotions, it's just step back. It's really sad that some people have just a harder time experiencing positive emotions. But the good news is that it's not all there is to it, right? If you find engagement in your life, I love riding.

It's a flow activity for me. I lose track of time. I just get a feeling of accomplishment from it. I think I'm kind of right in the middle, but maybe I have a hard time experiencing positive emotions. But engagement and think of a musician. or someone who's playing a sport and kind of loses themselves in those tasks is actually even more powerful over time. And we all know, and I could go on and on and on, but I just hit on meaning real quick.

We all know that meaning is one of the most powerful things in one's life. If you feel like what you're doing is meaningful and it can be helping others, but just generally, if you feel that meaning in your life in what you do, you're set up for longer term being able to thrive. And I use thrive as maybe a better term than just happiness. Because if I just say happiness, we tend to go to positive emotions, right? And laughing and smiling and drinking good wine. But thriving to me is broader and more important. What is the distinction between meaning and purpose, or is there one? I don't see a big distinction.

I think the terms are basically, in my mind, interchangeable. Meaning will, this very famous book by Victor Frankel. And talk about a dark, somewhat depressing book. It's about the Holocaust. But it's also in a way and not blifting book, because Frankel concluded that those who survive, primarily his theory, is that they had more. more of a sense of meaning in their lives.

And those who survived were those that spent time thinking about others and helping others. And so there's nothing more powerful than meaning. You could call it purpose as well. To me, they're the same. Right. And his book is called Man Search for Meaning. That's right. Yeah.

In addition to your favorite acronym, Perma, you also write about three Cs, core beliefs, curves, and control theory. Can you walk us through each one of those? Let's start with core beliefs. So core beliefs are filters, if you will, through which you interpret the world. Sometimes they're conscious. Sometimes they're not so conscious. They're often driven by a significant event in your life.

So psychologists will use examples such as, let's say you've been betrayed in a major way in your life by someone. one. You might develop the core belief. No one is to be trusted. And that becomes the filter through which you look at the world. Don't trust people. And so there are all these different core beliefs that sometimes we know we have. And by the way, this has a lot of applications to money as well. We might have core beliefs about money. Oh, money is to be spent, is to have fun. That might be your core belief on money. Or you have a core belief on it's really important to set money aside. There are different ways to think about core beliefs. But the point I make is you have to take some time to identify them, think about them, maybe work with someone,

and manage them. Because some core beliefs might not be productive. Others might be really productive. But what are your rules of thumb that you use to go through life and where do they come from? And this also applies to organizations, to teams, to sports teams, to businesses. What's our team's core belief? And so there are lots of applications of the concept. So that's the first C. When you're managing other people's money, how do you stay aware of your own core beliefs and hidden biases. There are lots of core beliefs in money management. Sometimes they're expressed as simple rules. A lot of investors, for example, I'm sure in our audience, believe that the trend is your friend. You could call that a core belief in money. Oh, if crypto goes up,

it's going to continue going up over the next six months, I should buy more. Other core beliefs with money are, in fact, the opposite, which is buy, low, sell high. Oh, something has gone down. I should buy more because now it's a cheaper price for something that I already liked. Or something has gone up by a lot. My core belief is it's overpriced. So in money management, we refer to growth portfolio managers and value portfolio managers. So that's, So what you think about core beliefs with money is that do you believe the trend is your friend and you can maybe pay a little bit more for a business or a company and keep writing the trend or are you looking for opportunities like Warren Buffett, for example, will have more of a value

core belief. So those are ways to think about it with regards to money. And it's fascinating, you know, you said when you manage other people's money, it's really, and there's no right or wrong. I mean, you can study these things. You can look at what works and when, and I've done this for 20 years, understanding markets, which core beliefs work better or not. In fact, sometimes they work well together. But the idea is to take a step back and understand what do you really believe in?

What is your process for managing money? And how is that influenced by your core belief as the money manager? really important sort of deeper questions. Right. I think that added responsibility when you're managing the money of others kind of demands that added reflection of seeing how your assumptions about the world cloud your judgment. And Paula, it's also why we have teams and it's also why money management is a team sport. In my group, we debate our core beliefs.

We have people who approach things from different angles. And we have a culture where we can exchange those ideas, disagree, but we trust each other and respect each other enough that it makes us better. The debate makes us better money managers. It's a team support. As I hear you describe it, it almost sounds like the writer's room on a television show. Yes. Right? Everyone's coming together and flinging ideas at each other.

and then together they produce a final script that is beautiful. We all tend to get defensive when someone questions our idea, especially if it's an intellectual debate. We get defensive. It's natural response. We tend to take it personally. And what I constantly tell my team is your idea is not you. And if you think about it, your ability to put your ability to put

idea on the chopping block and have others disagree with it has much less downside than it feels like. Because if someone kicks the tires on my idea and it reinforces my thinking, actually improves my thinking, then I'm better off. And if I end up abandoning my idea, then it wasn't a good idea to begin with. So collaboration is super important in money management and beyond. To what you said about if you end up abandoning your idea, then it wasn't a good idea to begin with. What strikes me is might be true unless one of your core beliefs is other people know better than me. Yeah, or I know better than other people. Those are not healthy core beliefs. And it's actually negatively correlated sometimes with how smart you are. And there's a problem there, right?

if you've been right a lot and there's studies that show the experts, for example, in survival situations, don't do better. They actually tend to do worse because they take more risk due to overconfidence. So there's a huge risk of overconfidence if your core belief is, I'm right, others are wrong. Or the opposite, right? You might be way too agreeable and you just don't have enough confidence in your ideas to stick to them when you should stick to them. So both sides, you have to walk the line in between both sides. But I strongly, strongly, it's one of my core beliefs, believe that when you put smart people

together to solve a problem in the room and you have the rules of engagement that favor mutual respect, but allow people to disagree in a constructive way that you end up with better outcomes, better decisions. What's the optimal number of people to have in the room? Oh, that's a good question. Jeff Bezos famously has the idea that you should be able to split two pizzas. So I guess he didn't want to give a number, but I guess if it's a large pizza and you have average eaters, I suppose that's maybe 10 people, five people.

people per pizza, I don't know. Yeah, most of our committees are in the sort of 10 to 12. It probably depends on the types of decisions and who's in the room. And so to my mind, there's no hard and fast rule. But you don't want the decision making to become too cumbersome with too many people involve. And that's a risk. If you have people that all think the same, that all view the world through the same core beliefs in the same way, then you should maybe invite others with different perspectives or rotate members of the decision-making committee. Short answer is it depends, but let's stick to two pizzas. I like it. I like the two pizzas rule. Yeah. That's a good one. Okay, so we've talked about core beliefs. Let's move to the next

of the three Cs, the second of the three Cs, which is curves. Curves. It sounds mysterious. Like, well, what is this about in a book on the psychology and self-improvement and leadership? Curves, I think throughout the entire project of writing this book, was the most important finding for my own life. At the beginning of the book, I say, you're reading this for self-improvement. I wrote it for the same reasons. And when I started working on this, I was pretty stressed. and curves have to do with how you manage your stress. Let's start with the basic assumption.

We all think stress is bad. And in fact, there's research that shows that stress will basically kill you. If you monitor your cortisol levels, then it's just it can lead to burnout and health issues. But it's much more nuanced than that because optimal performance in sports and many other areas does not occur at zero stress. And that's where the curve comes in and the research in psychology comes in. These are called Yerkes-Dotson's curve.

Curves, and they show that up to a certain level, having a little bit of anxiety, a little bit of what sports psychologists will call activation or arousal, will improve your performance up to a point. And then after that point, the curve, it's like an inverted U. It points down because then you get the negative health effects and you basically, you choke. So those curves are fascinating and there's all different aspects of it.

But the main takeaway is optimal performance does not happen at zero stress. In fact, for most people, they get so bored at zero stress. If someone, Paula, is going to do surgery on you, don't you want them to be a little anxious about how it's going to go? Yeah. I want them to be invested in it. Yes. If you're a student and you're anxious about a test coming up, you're probably going to prepare more. And by the way, this is all from sports psychology.

Athletes are neurotic. I worked with a sports psychologist on these chapters. And you said, athletes are motivated in part by fear, by fear of failure. And that's part of what drives them to practice and to performance. Sports psychologists will reframe the idea along the curve. More, you know, stress is kind of an easy way to describe it because we all have a mental image of it. They'll describe it more as activation.

So you kind of reframe the stress a little bit. But I don't know when you do a podcast and you've been. doing podcasts for a while. If you're at zero stress, you might not prepare as well. If you don't get a little bit of adrenaline, it might feel different. It might be harder. Your performance might not be as good. It's been proven over and over again in sport. If you need to sprint 100 meters, if you're anxious about it, again, we're using terms loosely here. A psychologist might take issue with this, but the idea remains, stress, anxiety, activation, arousal, whatever term you take, and it's actually helpful to reframe away from stress and anxiety, but you're going to run faster

for 100 meters if you have adrenaline pumping through your body. So there's that. And the other thing is, most of the time, it's impossible to not be stressed. Do you think, like, top athletes, a basketball player, when there's a three-point shot, to be made and there's five seconds on the clock. Do you think they don't get a shot of adrenaline? Do you think they don't get stressed? So optimal performance does not happen at zero stress. To me, it was liberating to look at the research, to understand it. And Tim Ferriss said, I love that quote, embracing stress is like a superpower. And so in terms of my own personal life, the curves,

The stress curves, the Yerkes-Dotson's curves, were really helpful to just think about not stressing about stressing. Stress is natural. It's a component of high performance. Optimal performance does not happen at zero stress. Most people don't know. We all want to be resilient. Most people don't know the story about the moon landing in 1969 when everything went wrong. And Neil Armstrong was trying to land the lunar module and the computer went down, the communication

went down. The lunar module went off track. He had to take manual control of – they ran out of fuel. He had to take – this was the first man. The famous part of the story is a small step for a man, a giant leap for humanity. Yeah. Well, he was hooked to a heart rate monitor. And for most of the mission has been documented.

that his heart rate was at 75, which is basically resting heart rate for most people. Wow. It only spiked when he actually landed the module. So we all want to be like that. The reason why I mentioned Neil Armstrong is those curves, those stress curves, Zirksdorsin's curves, are different for different people. They're different for different tasks, and they're different for different people. But understanding this opens a whole world of...

of how do I, if I'm a leader, manage different people that have different stress tolerance? They will reach optimal performance at different levels of stress. How do I set up incentives and goals for different tasks if different tasks require different levels of stress for optimal performance? Famous example is, you cannot be too stressed to do a power lift. there's basically no amount of adrenaline you can get the more activated you are the better you're going to perform as a sprinter or power lifter. Archery?

That's another or taking a math test. The optimal performance occurs at a lower. You get to breathe and actually lower stress level. So different optimal performance points around those curves for different tasks, for different people, but the key takeaway is trying to live in zero stress, trying to perform in zero stress is, A, impossible, B, based on the human condition, not where optimal performance happens. Is stress in this context the same thing as neuroticism when we talk about the big five personality traits?

Yes, so neuroticism is your tendency to experience. experience stress. It's a personality trait. But like the curves, there is no right or wrong answer. Some individuals and people score high in neuroticism, some score low. And being too low in neuroticism has its own downsides. Yeah, you're too chill. Yeah, you're too chill. You're not motivated. And of course, being too high in neuroticism means that if you go back to the stress curves, you can't really go up the curve. Like, your curve is really short, if you will, and you have a difficulty handling basic tasks and all the way to clinical anxiety problems, which can be debilitating, right?

So, like all the personality traits, I love the research and personality because it's just so broad and deep and interesting. Like all the traits, neuroticism being one of them, you're on a spectrum, if you will, you can have low and high levels of it. That can change over time. Not all of it is genetic or inherited and also is different across. So we've talked about the first C, which are your core beliefs, and the second C, which are curves. Let's talk through that third C. which is control. So there's a model in engineering. Now, why am I talking about engineering,

psychology of leadership and self-improvement? It's a model that is very simple, but at the same time, very complicated. You can actually use mathematics. It's called control theory. And what it says is when you have a multi-stage decision to make, a simple example would be, I'm walking around a neighborhood,

and I need to choose a restaurant and I'm going to walk by different restaurants. That's a multi-stage decision. Control theory says you need to start from the end point and work backwards to figure out the decisions you should make. Start with the end in mind. And then it relates to a lot of different things. Start with the end in mind. We talked about think about death through a positive approach to thinking.

about the end of your life and stoicism, all these things come together. But the way I introduce control theory is not the mathematics of it. It's more about if you have time to make a decision, first of all, most people, especially in business, don't take advantage of the time they have left. We all want to rush the decision. So if we have two months to find an apartment, if we have two months to hire someone for our business, if we have a year to make an important career decision, whatever the decision is, especially in business, we all have a tendency to admire decisiveness, we impose it on ourselves, we want to get the decision done. But with the control theory model, there's clearly an advantage to what I call strategic

patients. I worked with an executive once, and it was clear to me that if someone came to him with a non-urgent decision, he would take advantage to wait. And the interesting part was, by waiting, oftentimes the problem would take care of itself, whatever the problem was. And also, he kind of empowered his team a little bit more than just always be there to make the quick decision for them. Now, some decisions require urgency. That's okay, and we'll recognize them. That's easy. It's the decisions that require strategic patients that we tend not to recognize and we tend not to take advantage of the time we have left. So knowing the difference between what type of decision you're facing is really important. So for your audience, when you talk about financial planning,

and personal finances, people might be looking to hire a financial advisor. That's a big decision. And they might want to take the time to talk to three, four, or five, not take the first one that comes across to find the right fit. So there are all sorts of examples where strategic patience is useful. That's what we learn from the third C, the control theory. Now, it's interesting that you talk about how if a decision, is not urgent, that successful manager might take the time to not make it immediately because that

contradicts some other advice that I've heard that says, hey, take action, let's go. You know, the most successful people, like, we don't wait, we go. Particularly if a decision is reversible or low stakes, then don't belabor it, just make it and move on. Yeah. And there are plenty of decisions that require quick action. But many others don't. There's a really interesting part of the control theory, and I use an example of someone who's, it's a made-up example, but someone whose parents gives them 10 years to get married. And they go, you have 10 years.

And it's a contrived example, but assume the person meets one potential, partner a year. What should be their criteria in the first year? You have 10 years. There's a mathematical theory about this. It's the secretary problem. Yeah, that might be another way to look at the same problem. But the idea is your standards should be really high in year one.

So I read a book called The Mathematics of Love, which went through the whole equation around when you have a potentially infinite pool of candidates. Right. What is the mathematical tipping point at which you have interviewed sufficient candidates in this, you know, the mathematical formation was if you're interviewing a secretary, but it can be applied to. Yeah, it could be hiring someone. Yeah, exactly. Maybe I should change my example.

No, no. The romance one is better. The romance. Yeah, yeah, the romance one is better. But so control theory, the idea is you start from the end. Right. Right. And if you meet one person a year and you score them from zero to 100, I just don't want to

politically incorrect here. But okay, we'll do it. No, this is fun, yeah. So zero to 100, you know that 10 years from now, what's the average sort of person? It's they're, you rank them 50 as a potential mate, right? So that's your expectation. If you wait 10 years to last year, you're going to roll the dice on whoever comes along. And your expectation is, there'll be a 50 because it's basically equally distributed between

zero and 100. Right. Okay. That's starting from the end point. Now, here's the question. If you're in year nine, what do you do? So you start working backwards. If you're in year nine, then you know that your expectation for next year is that you

meet a 50, a person who you would rank 50. Right. Okay. So if you're in year nine, then maybe you should keep looking for anybody that is below 50. It depends on your tolerance for risk. But to simplify, if I meet someone who I rank below 50, I might as well wait because the expectation is 50 for the last. Right. Yeah.

Probabilistically, you have a higher expected value for the person in year 10 if the person in year 9 is a 49 or below. Right, right. And then you keep working backwards. And the interesting part is the curves goes up and up and up and up. And in year one, I can't remember exactly the numbers, but it should be like 90, right? because you have nine more years to look for a mate or hiring someone or whatever or find the right apartment. So in the case of the marriage example, I call it the curve of desperation because it points

down. But it's really important for decision making, for psychology, for how you lead others into difficult decisions. It's, you know, work backwards, realize that you know, you know, you know, realize that you should exercise strategic patience early on and kind of think about, you don't need to do the whole mathematical modeling, but think about how your standards should kind of go down. Right. If I'm looking for a restaurant, I'm not too hungry, I got an hour, I'm going to walk around

with some friends, and I walk by a restaurant that looks pretty good, but I still have an hour to look. Well, I'm going to pass. If it's like minute 58 and I'm starving, my standards have come down quite a lot and I might end up at McDonald's. Although I personally, I like McDonald's. I try not to eat it too much. Right. And if you applied this to the marriage scenario, you also have to consider your bat an best alternative to a negotiated agreement because if the batna for a low standard mate is being single, oftentimes the batna is more appealing.

Yes, well said. Right. So then there's that element as well. Whereas if you were to apply this in the case of the secretary problem as the mathematical equation was written, the batina, which is simply not making the higher, is untenable for the scope of the business because the business needs to make that higher no matter what. Same with the restaurant. You have to eat somewhere. You have to eat. Yes. And there's an opportunity cost of waiting, which is part of it. And there is a switching cost in the marriage example. It might be divorce. Right. Heavy back end load, right? Right. Right.

Right. There's a big front end load and big back end load in terms of the, you know, entering and exiting the fund. Right. I have to say, Paula, I didn't think we'd be giving people marriage advice today, but it shows how these mental frameworks from control theory of thinking from the end point and working backwards. This actually goes back to our earlier discussion on net prison value. Right. It's kind of the same idea. So thinking from the endpoint and working backwards leads to better decision making, look forward

from the end point backward. I'm getting all my terms mixed up, but this idea of starting from the end in mind. And then second is strategic patience, which is part of this as well, which decisions you need to make right now and which decisions you need to wait. And if you wait, how quickly or slowly should your standards go down? And in the secretary problem, I think they found that the optimal was somewhere around 35%. If you were to interview a batch of 100 candidates for the secretary role, once you have interviewed the first 35 out of 100, you have sufficient data that you are able to make a good assessment of who a good job candidate will be. So after you've interviewed the first one-third of your total population set, you have enough data around candidate quality that you know how to intelligently assess.

any candidate who comes after. Yeah, and again, we tend to just make those decisions too quickly. We don't get to the 35. Right. I see it in business all the time. That's how we think leaders should act, be decisive. People come to you for decisions. You should make the decisions.

In a lot of the ways, I've found counterintuitively that leadership is not what we think it is in many, many different ways. Another example is that we all think leaders need to be great talkers and communicators. The higher up you go in an organization, the more you need to be a listener, as opposed to a talker. Just talked about how we think leaders need to make a bunch of quick decisions, but wise leaders actually learn when to exercise strategic patients. We all think leaders have to build consensus, but good leaders actually very often need to make a lot of good leaders. on popular decisions and on. So there's a flip side to how we typically think about leadership and psychology and the research in positive psychology, support psychology, even personality

psychology really helps us think about leadership, self-provenment in different ways, in counterintuitive ways in a lot of places. Hack the holidays with the PC Holiday Insiders Report. Try this PC Porchetta, crackling, craveworthy. You're going to eat that? Who are you? I'm the voice for the next ad, car commercial, but I noticed that show-stopping roast and... Help yourself. Mmm, designed for indulgence.

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Can you talk about the Big Five and how all of that ties in with everything that we've just discussed? So there's one way we can do that, Paula, and I don't know if you're game. Ooh, I'm game. Okay. I'm going to describe each of the traits as five personality traits. And I'm going to ask you to self-assess whether you think you score high, low, or average on each of the traits. And for my readers, towards the end, I took personality tests and I reveal my own rankings as well. So let's start.

So there's five big personality traits. I'm going to start with one that we don't talk a lot about, but that's an interesting one. It's openness to experience. So before I ask you, do you think you're above average, average or below average on that trait? And maybe your listeners have been listening to you for many, many episodes are pretty clear on where you stand. So that's interesting for the listeners, too. Openness to experience means you like to try new things. You always want to go. My wife is like this. Always wants to go to a new restaurant. Even if there's a really good restaurant that we've been

before that we know is really good, there's an openness to experience. You like to try new sports. You like to travel. People who score low in openness are really more comfortable following routines. I tend to eat the same salad every day. It just makes it easier for me. I like to go back to the same restaurants all the time. So I'm kind of revealing where I am here and have celebrity examples as well. I have high openness examples of celebrities and low openness. So high openness would be, I have one in there, Jim Morrison from the doors, right? Famously, he would just try new experiences and different drugs and different things and do music in different ways. High openness. Low openness would be those who are tied to tradition and doing things the same way because

of tradition. So Queen Elizabeth was probably low openness, although she was much more complex than just, you can't reduce anyone to any personality trait. That's my caveat. But by her job definition, she was low openness. The Pope lives in tradition, doing the same thing repeatedly. So openness to experience, Paula. I'm kind of a bit on a low. Both side, but close to average, where would you put yourself? I'd put myself at extreme high. Oh, interesting. Yeah.

Interesting. So you get bored easily with repetition and so on. I do. I've traveled to about 45 countries. I've lived in five states. I just on a day-to-day basis, love trying new foods, that sort of thing. That being said, I will caveat. There are a few things that I do do repetitively, where I do.

find comfort and routine. So I tend to listen to the same music over and over and over to the point where I will sometimes listen to the same one song, literally hundreds upon hundreds of times. I find a lot of comfort in the repetition of that. I tend to, I don't have a very extensive wardrobe. People who've watched me on YouTube for a while have seen this exact suit, this blazer that I'm wearing. You've seen me wear it many, many times. In terms of music and in terms of clothing, I tend to wear the same things over and over and listen to the same music over and over. So those are my two. But I really like your answer because you have an idea of where you are, which is high in openness.

But you're also illustrating how personality traits depend on situations. And there's a big debate in academic psychology in terms of how much is situational versus you are who you are. But your answer is perfect to illustrate those caveats. second personality trait is conscientiousness. People who score high in conscientiousness are disciplined. They're on time. They keep their desk very neat. It's a highly valued personality trait in organization. They keep everything tidy, organized, they deliver on time, on projects, and so on. This is scoring high and conscientious. People who score low in conscientiousness are more free-willing, more creative.

They might not be on time. They're just much looser than their counterparts who score high. That's the idea. By the way, it is kind of a super trait to have. Unlike all the other traits and so on, we say there's no good or bad answer. For business success, conscientiousness correlates. but there is a downside to being very high in conscientiousness, and that is perfectionism, that is inability to delegate because you just can't trust others to do it as perfectly

with as much perfection as you want to do it. So it is kind of an awesome trait to have, but there are dark sides to being on the extreme side of it. I can tell you my ranking, and I'd love to hear yours. I score quite high on conscientiousness. I tend to be on time. I tend to be organized. I tend to want to do things perfectly. Sometimes it's difficult because in a lot of things in leadership,

you need to get 80% of the outcome on 20% of the effort because to our prior discussion you need to move fast. You also need to accept that you need to make decisions with imperfect information, which is hard for highly conscientious people and so on. But I tend to score high. Where would you rank yourself? Ah, so I'm, so we are opposites on all of these. I would put myself a rock bottom low. Oh, really? Yeah, absolutely. Absolutely. I'm chaos monster, a total chaos monster. Fascinating. I have ADHD, and that probably plays into it. I have that time blindness, you know, that cartoon Tasmanian devil, right? That's sort of the way in which I operate through the world.

Yeah, that sounds like my son. I hope. He's not going to listen to this. He's a teenager, is 17. He's a really, really, really smart kid, but everything is right up against the deadline. And he gets really good grades, but then his teachers say, if there's no structure, then he struggles. Like if it's self-directed work, then he struggles. The next one, everyone knows. And this is kind of the personality trait that has already made its way into business. There's a famous book about it. It's extroversion. So with extroversion, if you get energy from being amongst the crowd, from meeting people, if you're happy and energized by social interaction, you're probably an extrovert. People have this mental image of extroverts, people who talk a lot.

It's more subtle than that. If you're an introvert, an introvert, and I won't spend too much time defining it because I think we'll have kind of an idea of what this trait is. but if you're an introvert, you prefer spending time alone all else equal. It doesn't mean that get along with people or that you don't socialize, but you find more energy in sort of quietness and might be harder for you to speak up in a group, for example. So I kind of know what this is. I'm actually, despite what I do more on the introverted side, this is the test for

extroversion. If you go to a conference of podcasters, for example, and there's a cocktail hour, how do you feel? I'm excited to go. Okay. I think we have our answer. I think so far are we exact opposite. Yeah, we're the exact opposite on all of these. Of all the trait. Did you want to add anything on extroversion? Yeah. I used to think that I was an introvert because we actually had a guest on this show, Jen Granaman. She wrote a book called The Secret Life of Introverts. And I used to believe that I was an introvert because the nature of my work requires spending a lot of time alone, a writer, and so which requires spending a lot of time alone. I love to read, which so one of my favorite hobbies is necessarily a solitary one. And so for all of those reasons, I believed erroneously,

I think for a long time, I believed that I was an introvert. But I would get so bored of being alone that I would need to go out and recharge my batteries by being around other people so that could then have energy in order to sustain the time that is required for being alone, to do my work. And so once I realized that I was actually an extrovert who had a solitary lifestyle, which is distinct from being an introvert. And I think it was during the pandemic that I realized that I then started being very intentional about reshaping the work that I do in such a way that there would be more face-to-face interaction, such as this interview that we're having right now. Yes. So now we move to agreeableness. People who score high in agreeableness are people pleaser. They tend to put others ahead of their own needs. And they just have a hard time being a devil's advocate, disagreeing. People who score low who are disagreeable. And again, I have all these celebrity examples and there's like famous shows where the lead character is very disagreeable. in this. Gordon Ramsey. Yeah, or that would be a good one. I think he's in there or in this show Succession, Patriarch of the family. Anyways. Yeah, Logan Roy. So Logan Roy, right. Famously disagreeable.

So with agreeableness, people come to you and they say, can you do this for me? And you're more likely than not to say yes. With disagreeableness, a lot of academics who are intellectual developed that trait. Again, not everything is inherited with personality trait, just because that's how you let ideas compete and that's how you motivate your IQ to work harder. So there's some of that in academic circles and you've interviewed a lot of academics. Okay, so for my tests, I got a very, very low score in agreeableness. And I did not expect it. And part of this is, you know, those tests, when you write the answers, you kind of know what you're doing. You know how it's going to score. So you have to make an effort to answer honestly. But also, the way you get scored

is how do you score yourself relative to how thousands of people score themselves, too. So that's the kind of the, I think, appeal of taking the test. So my score was really low in agreeableness, and I completely disagreed with it. I actually took another test, and it wasn't that low. But that was part of, I think, becoming a bit self-aware and I started thinking about it and I talked to people close to me and yeah, maybe I score low in agreeableness. I don't think extremely low, but lower than I thought before I started studying personality psychology. So this goes back to a question that I asked earlier when you said if myself and other fund managers are having a debate and if we're each advocating for our own ideas, if I give up an idea, that means it wasn't that good. And I

responded with, well, that might be true, but it might also be that if you give up an idea that you've been advocating for, it's because it's not a referendum on the idea itself, but rather because you hold some core belief that this other person's idea is better than yours by virtue of the fact that it originated from the other person. So it's a tendency to be deferential to others. Yeah, it's agreeableness. It's agreeableness. And so the reason that I asked that question is because that's my tendency. It's the tendency to assume that an idea generated by others is necessarily better than an idea generated by myself based not on the idea, not on the merits of the idea, but rather on its

source of origin. Yeah, yeah. So I think it would score high and agreeable. Yeah, yeah, exactly. I think in my case, just professionally spending my life in money management and in the debate of ideas, I think I've developed some of this. For me, the challenge is do not take that debate mentality home for no reason or in a kind of extreme way, right? If I get home and I need to take out the trash, I should take out the trash. Well, no, so what was interesting to me about when

I brought up the, well, maybe you're giving up the idea because you're being deferential, do you remember your immediate response? You said, or you might think that your ideas better than everybody else's. Right. Right. Which is low agreeableness. Right. Yeah. And it was interesting that that was your immediate response because I found that so unrelatable. Right. Right. So yeah, I think the nature of that whole conversation highlights the fact that we're opposites on this score. I tend to be a people pleaser to a fault. Yeah, I've seen this inside of my own company. I have tended to be a people pleaser to such an extent that I have let, we're not even talking employees. I've let contractors, 1099 contractors throw us off of our guiding vision and our guiding

mission, throw us off of with their, they think the branding should be done this way. The little dose of disagreeableness is not a bad thing. I said leaders have to make tough decisions sometimes. You have to have some of it. I talk about 10% of the time. It's interesting because leadership emergence, becoming a leader, require quite a bit of extroversion and the ability to being agreeable. Leadership success, once you've been promoted into a leadership position, is often the opposite and requires you. And that's why introverts make great leader if they can only get there. Right.

Because they're better at delegating, they're better at different things. And so with agreeableness is the same. A little bit, Paula, a little bit in your life might help. Maybe that 10% rule is for you. Yeah. I need to be less of a people pleaser and more decisive, particularly inside of my business. Yeah. You know, I need to be more committed to our vision.

We're really the exact opposite. Yeah, the complete opposite. You have one more trait and maybe we'll be the same there. So neuroticism, I think, is self-explanatory, is a tendency to, get anxious about things, to anticipate trouble in the future, to ruminate, have Woody Allen on that side of the scale and famously. And it turns out, if you do a bit of research on that, all celebrities self-report almost, I mean, I haven't found a celebrity who doesn't self-report as anxious and high in neuroticism. So there seem to be a correlation with

creativity and also with wanting the limelight, there might be a cause or effect. Being in the limelight maybe makes you more neurotic, vice versa. So that's high. Low neuroticism is basically our Neal Armstrong example, 75 heart rate while he was landing the lunar module in 1969, someone who's unflappable, generally a good thing to be for a leader. But again, if you take that to an extreme, there might be apathy, there might be laziness, and so on. So on. So like many traits, both extremes can have downsides. I'm going to come out and say, I score quite high in neuroticism. I think it's a source of motivation for me.

I get worried about things, but that makes me prepare more and to a certain extent perform better, going back to the curves we talked about earlier, the York-Stodson's curve. So are we still opposite? You know, I think on this one I'm in the middle, relatively in the middle. Okay. Relatively in the middle, but I think I lean low neuroticism. Here we go. My disposition is generally pretty chill.

Yeah. There are a couple of choice topics that I am highly neurotic about. Yeah. But outside of just a few very specific verticals in my life that I'm neurotic about, on everything else I'm chill. So, you know, Mark Manson wrote this book called, The Subtle Art of Not Giving an F. Yeah, he's fantastic. I love that book. A great book. Essentially for anyone who's listening who hasn't read it, he advocates for a life

approach in which for the vast majority of things you just don't care. And there are a very, very few things about which you care greatly. And that's really my approach to life. And that's just, that comes naturally for me. So for most things, I've got a very, very chill disposition, except for a few things. So we are officially opposite on all five traits. So that was the big five. There are different models of personality. The big five is the one that has the most scientific research behind it, and that's why I chose it. I also like the fact that the research shows that it's a spectrum. It's not your A or B, and it can change over time. But all this research and personality psychology is so much broader than just this extroversion,

introversion idea that has made its way into business, I think the other traits are super important to develop empathy. Once you start looking at your colleagues through a lens of personality traits, I think you begin to understand them better, right? For me, if I have someone who always disagrees with my idea, I might take it personally. Or I might just say, oh, they score high in disagreeableness, and that's how they process

information. It just helps develop empathy. It helps put better teams together. We talk a lot about the diversity of thinking and how important that is to decision-making. Well, if you put a team together of five, let's see, have a big project and you have to assign five people, and you know they're the five most conscientious people you have, that might not be a good thing. They might get way delayed because they're trying to do it completely perfectly.

And if you throw in a less conscientious performer in there who is more creative and willing to kind of get things done or just balance the team, you might actually get a better outcome. Anyways, I could go on. But personality psychology, I hope that's a big contribution from my book, is so much broadly. than just this idea of extroversion. It has so many applications. And it's fun, too. Right. Yeah, exactly.

That was a fun exercise. I love, actually, I love that we're completely the opposite on every single one. It's, I think, great for the listeners because now you get... You get both sides. Yeah, exactly. Nice. Well, thank you for spending this time with us. Is there anything that I haven't asked about that you want to emphasize?

No, I thought this was a fantastic discussion. I love the podcast format. I just love it. My day job, I do these punchy interviews on CNBC where I have two minutes and there's a lot of pressure. Yeah. Here we sit down. Yeah.

Here we sit down. We have time. We talk. We go in unexpected directions. Maybe my next book idea on net person value applications to life decisions. Anyways, that was really, really fun. Thank you. Oh, of course.

Thank you for spending this time with us. And please tell the listeners, where can they find you if they'd like to hear more? So I have all the social media platforms. The best one to start is probably to find me on LinkedIn just with my name. But you can find me on everywhere now on Instagram. And I even have a TikTok now. Wow. Yeah.

I don't know if I should. Yeah, the best way is on LinkedIn. Perfect. Thank you. Thank you. Thank you, Sebastian. What are three key takeaways that we got from this conversation? Key takeaway number one.

Use concepts from the world of finance. to make better life decisions. The concept of net present value is not just for Wall Street. Sebastian shows us how this financial concept can help you make smarter choices about everything, from your career to your relationships, to anything that matters in your life. The key to doing that actually relates to a different concept called sunk cost fallacy, where you don't think about what you've already sunk into the project, the relationship, the career. you instead think about the present and the future.

And then you calculate, you know, what is the present value of future payoff? It's this wonky finance idea of net present value. And Annie Duke doesn't really frame it that way. But that's, to me, the best way to avoid the sunk cost fallacy. Look, to put it in an even simpler term, you need to look forward, not backward. based on what you know now, based on where you are now, what is the best decision to make? Key takeaway number two. Your goals might literally be killing you.

So there's a concept called goal-induced blindness. And it's real, and it happens when you become so focused on achieving something that you lose sight of everything else, including your own safety and your own well-being, your own health, your own wellness, your own mental health. Sebastian learned this the hard way when he was so relentlessly pursuing career success that that single-minded devotion nearly cost him his life. I was working in money management and I was building capabilities that were in high demand throughout the world and I felt important. I was asked to go to Japan to make a presentation to a large institutional investor and people that control billions of dollars. or yen in that case. And I just felt like what I was doing was super important, and my career was on the fast track.

I was traveling nonstop. And you opened with the story of I almost died in 2005. It was partly I got this infection, this mysterious bacteria, because I was completely run down. I had goal-induced blindness. And I wasn't being as productive. as I could be. So that's the second key takeaway.

Finally, key takeaway number three, money and happiness aren't what you think. Harvard did an 80-year study that revealed an outcome that surprised a lot of people, which is that people who climbed the social ladder and made more money were not meaningfully happier than those who struggled financially. And the real predictor of long-term happiness were actually the quality of a person's relationships, not the balance of their portfolios. And I know that sounds super rainbows and kumbaya,

but this is a longitudinal study, subject to peer review and subject to all of the mechanisms through which we validate data. So there is a research-backed, evidence-based basis for the idea that relationships ultimately have a greater effect on long-term happiness than money. They concluded that the number one factor of long-term thriving, long-term happiness, was the quality of one's relationships

with the people around them. So you could be in a tough situation in your life based on conventional measures of success, but if you still have quality relationships with people around you, it makes a world of difference. Those are three key takeaways from this conversation with Sebastian Page, the chief investment officer,

at Tiro Price and the author of The Psychology of Leadership. Thank you so much for tuning in. If you enjoyed today's episode, please do three things. First, share this with the people in your life. Those quality relationships that you've developed, share this with those people, those people with whom you have quality relationships. And also share this with the people with whom you have mediocre relationships or tenuous relationships.

Share this with people with whom you have relationships of all sorts. That's the number one thing you can do to spread the message of F-W-I-R-E. Number two, please subscribe to our newsletter, afford-anything.com slash newsletter. Absolutely free and we share insights you will not find anywhere else. Afford-anything.com slash newsletter. And number three, open your favorite podcast playing app. And while you're there, make sure you hit the follow button and leave us up to a five-star review, write a few words, tell us what you enjoy about the show.

Also, check us out on YouTube, YouTube.com slash afford anything, where we have videos of all these interviews so you can watch it, facial expressions, body language, you get to watch the whole thing. It's a great space for these interviews to come to life. Again, that's YouTube.com slash afford anything. Thank you so much for being an afforder. This is the Afford Anything podcast. I'm Paula Pant, and I'll meet you in the next episode.