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

24:29Because 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?

24:59Do 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 is if you're optimist and you do feel like you have the ability of internal locus 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 locus control, that means 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.

25:32So 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 Brambilas 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.

26:15And 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 to get older.

26:49Like, 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 that 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. If you have access to the internet, you have access to a whole knowledge base of resources and tools. The kids are back in school now, and I finally have some extra time to plan a weekend getaway for just us.

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29:55So Adrian, 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.

30:34Because 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 already 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 even 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.

31:03And 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 is a billionaire came over to the US and 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 at all. the mindset was so incredibly different. So his, 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.

31:39I 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 Americans 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.

32:19There'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 blindness. 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.

32:55And 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 into 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 to me, bigger, shinier objects than they were. When I was making minimum wage, I didn't think about$50 ,000 opportunities because that was more money that I could even fathom. Now, as we move more money, there's always a$50 ,000 investment opportunity or people hitting us up.

33:31They promise you that the sky's the limit. I've been burned. I invested with a financial YouTuber, real estate guy, and it was$50 ,000 a couple of years back. It was the worst investment I ever made. The success bias like yeah and i did due diligence seems credible has a podcast millions of followers real estate guy met him in person so i'm crossing all these things off the checklist and this is still my fault it's not i as much as i can blame this youtuber it is my fault so why did i still make that terrible worst financial investment i've ever had i probably won't see a penny back it's it's probably the result of the success or confirmation bias so yeah i'm now my network is more established 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.

34:20So it's like the other side of if everything's your fault, what if you start doing really, what if you start doing all the things you listen, long time listeners of the podcast are probably doing all the things that they're teaching Paul. 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.

34:49It'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 situations. 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.

35:39So 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.

36:18That to me, I was like, it's almost like avoiding the pain of disrespecting my whole family tree. So it was like 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 the lot of people that we see on social media where they have half their net worth into some crypto or NFT.

37:00So 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 used the word money scripts a little earlier in this conversation, but we haven't actually elaborated on what those money scripts are.

37:40Can 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's been, has been written for you. And that's what we inherit. So we have these beliefs around money that typically dwell in our subconscious mind.

38:18And so they either come from things our parents said or didn't say, or whoever our centers of influence were when we were growing up. They come from our culture. There's, there's a lot of religious space 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.

38:51And 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.

39:23And what's less painful is to blame other people. That's what's so seductive about an external locus 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 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. Big one for me was skiing. Like, I could never go skiing.

39:55It cost way too much money. So I never could downhill ski. The list goes on and on and on. And if you grew up 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 solution to my problem of having low self-esteem about not having money. It's like, well, look, people get rich by taking advantage of others. I'm not going to do it. I'm a good person.

40:23Those 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 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.

40:57There'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.

41:29Okay, 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 Ebenezer Scrooge, you see Montgomery Burns on The Simpsons, you see Scrooge 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 the desert in a little hut, you know, versus the Empire that has all these resources.

42:12So absolutely. Right. 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 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 in humanity is between gold and feces.

42:54His 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 to one important element, they're all partially true.

43:28They'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 to you know to go to heaven by if you're wealthy and it's easier than 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.

44:08There's some nuance there. There's always some nuance. And that's really 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. et cetera. 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 his immediately, immediately it'll be like, yeah, well, it's a tax write offer.

44:43It's, you know, what I mean, they'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, that, um, 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.

45:19And 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.

45:56You 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, just an 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 1 % your fault, you know, what if your marital struggles or your financial situation is 1 % your fault. Okay, focus on that.

46:25Yeah, 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, 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 I still am partially, 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.

47:06And I feel like you've challenged me personally on a couple of beliefs I had around like, what is practical financial advice to give 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 it 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 marketing angle, but it's like, it's like a cult line 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.

47:38And 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. 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, what is a successful marketing comes from there it's always interesting how they how they position the same problems that have always existed and i feel like with finance we talk we talk about we talk briefly one chapter on uh 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 our stance is we don't believe any government's ever going to take you to your financial freedom goal.

48:49I 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, this 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'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 feed every time I open it because it's an election year.

49:30And 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 one of the things 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.

50:03And 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.

50:52And this it's associated with consumerism and excessive consumerism. People have higher credit card debt. They 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'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.

51:25Wait, 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. 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.

51:59Because 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, 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 with terrible financial outcomes, this addiction to stuff.

52:27More 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 too. 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 need we feel like we need to buy things and and that is there's fulfillment in objects but that's a huge problem in in the world but i've experienced cultures i'm sure you have too where like they were so happy with less and then feel like they they needed to flex or 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 whatever but i still care and it's it's 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 we're trying to we're trying to change it but it's i think it's a losing fight i don't know how you feel if you've ever experienced like a culture like, man, these people seem so great and has nothing to do with objects.

53:58It's all the other amazing 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.

54:44People find levels of opulence and levels of luxury. Look at that major wedding in India that just happened, the one that Kim Kardashian and Rihanna and Justin Bieber were all at. We're going to be seeing more and more of those like 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 into their status that they were buried with their stuff, right?

55:29So 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 experience 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 Braggs are entirely different. They're the total opposite. Exactly. They're like, my odometer just hit 300 ,000.

56:07Yeah. Boom. Boom. Bump in status. Boom. Your status is going up. Yeah. And if you wore a luxury watch to one of those meetings, your status would plummet. Right. 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.

56:45So 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 as 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 is like yeah the people around in your circle what is the status game for that is it the designer brands like how many can you collect how many purses how many watches 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.

57:23That'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.

58:01So among people who are super devoted to eating clean, right? It's like, oh, I eat cleaner than you. And then among people who are minimalists, it's like, oh, I have less stuff than you. And 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 as 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 any one because any one 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.

58:50Yeah. 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 the light. And then I got into cold plunging. One of the first splurges, I spent like 15 ,000 on a cold plunge at my house. And I cold plunge every single day. And part of this, my son, son and cold plunge, I do it every single day. And I had no idea of these things before I moved to Austin.

59:21That'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 a 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 I don't know if that's practical. It's 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.

1:00:01I wonder if you were to ask your audience, 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?

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1:02:07So 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.

1:02:43So money status beliefs essentially equate 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 noticed, but there's some books here.

1:03:21You didn't bring them, but it's Gucci, Chanel, Dior, Prada. This is the status game. Oh, yeah. The money status. Right, right. Yeah. By the way, it's not. This is in your house, right? This isn't your. This is a studio that we rented. It came with the studio. I saw this. I'm like, Paula, what are you doing? 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.

1:03:56I didn't know how rich people live their life. And I was attracted to labels because it's an outward display of wealth. So it's like, oh, wow, that person's wealthier. Look, 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.

1:04:31You 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. In case 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.

1:05:03You have to understand my approach to 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 just 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.

1:05:33This 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.

1:06:06But 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.

1:06:37Lifestyle 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, it's a bit of an extreme stance, but people are being lied to so much. And, 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.

1:07:14And 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.

1:07:46And 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 then 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?

1:08:16They flex labels. And it's like, look, we're all influencers. We made sure that there's no labels. 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 who 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 net worth.

1:08:48So that's solid, man. You got$500 ,000 in net worth, you're doing great in the US. 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?

1:09:27And they also have a little bit of nervousness. That's the vigilance. They are 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?

1:09:59Yes. 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, 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?

1:10:34Let's focus on the, 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 be, 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, Because once you start meditating, your focus 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.

1:11:08They ran the analysis. The more you meditate, the lower your net worth, essentially. And the worse your investment decisions. And really, the message here is that before you meditate, you got to be somewhat worried about the future, future orientation. gratification. 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.

1:11:42That'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.

1:12:22I'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'm 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 and how might fire, financial independence retire early sometimes is fired financial independence retire early depressed 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 earlier how i didn't have this perspective and i thought i was fully right following on this extreme side of the fire moon 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.

1:13:21And 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, your sense of why, what's 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.

1:13:51There's statistics on when people finally retire and they die shortly after and they're completely healthy. It's because they, 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 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 dad if you guys leave me enough money to buy 10 lamborghinis i'm gonna 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 spend all your, the inheritance that you give me, I'm going to give it to the opposite political party that you guys like.

1:14:44I don't know the results yet, but I know that they're struggling like 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 come pet peeve is like, I love spending lavishly on my family and taking them to like super nice restaurants, Michelin star if we can. And my dad doesn't matter if it's the best steak of his life. it's like the answer is like how was it too expensive too expensive so this is not just a fire movement 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 fire movement it's like these people they sacrifice so much and then and then 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 you, it's so hard to flip that switch.

1:15:40In part, there's a, you, you really have to have confidence that money is going to be there. I think there's, there's a, 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.

1:16:17So 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 then and now you have to like figure out what is 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?

1:17:01No. 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.

1:17:46All 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. Right. But really, it's a good example, too, of the money vigilance being associated with higher net worth, higher income, lower credit card debt.

1:18:19I 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 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 heart of my belief.

1:18:56He's like, Brad, hold on a second. Are you worried about being poor? And I realized, 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 realized 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.

1:19:34It's like eight or nine out of 10 Americans, money's 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 of a sudden make you happy. All of a 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.

1:20:04So 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.

1:20:53For 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. Right. 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. Cause 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.

1:21:24Part 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.

1:21:59So 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 startthinkingrich.com slash Paula is where your audience should go to. And so they'll get the book. We have amazing community 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 to 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.

1:22:35But 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.

1:23:09Thanks for having us. Thank you.