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

31:00Earlier, 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. PERMA stands for positive emotions, engagement, relationships, meaning, and accomplishment.

31:47The 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 and accomplishments from a long-term perspective, than day-to-day positive emotions. And what's interesting is that some Some people are wired to experience more positive emotions than others. And on the negative side, 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 and accomplishment from a long-term perspective, you can still thrive.

32:45And 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.

33:41So 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 a 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 writing. 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.

34:30But 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'll 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 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?

35:22And 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 Viktor Frankl. And they talk about a dark, somewhat depressing book. It's about the Holocaust. But it's also in a way an uplifting book because Frankl concluded that those who survive, primarily his theory is that they had more of a sense of meaning in their lives. And those who survived were those that spent time thinking about others and helping others.

36:12And 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's 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.

37:01You 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, right? 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.

37:50Because 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.

38:36You 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 there's, 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 the way to 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 riding the trend?

39:28Or are you looking for opportunities like Warren Buffett, for example, who 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?

40:08And 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.

40:58The debate makes us better money managers. It's a team sport. Right. 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 idea on the chopping block and have others disagree with it has much less downside than it feels like.

41:50Because 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.

42:35And there's a problem there, right? If you've been right a lot, and there's studies that show that experts, for example, in survival situations don't do better, they actually tend to do worse. And 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.

43:42What'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 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 involved.

44:23And 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?

45:03it. 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. And 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.

46:00and that's where the curve comes in and the research in psychology comes in these are called yerk's dodson'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.

46:48In 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 he 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.

47:35More, 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, 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.

48:14Psychologists 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, that 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?

48:54So optimal performance does not happen at zero stress. To me, it was liberating to look at the research, to understand it. And like 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 low, you know, 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.

49:55He had to take manual control of, they ran out of fuel, 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. Well, he was hooked to a heart rate monitor. And for most of the mission, it's been documented that his heart rate was at 75, which is basically resting heart rate for most people. It only spiked when he actually landed the module. So we all want to be like that. The reason why I mention Neil Armstrong is those curves, those stress curves, Juerg Stassen's curves, are different for different people. They're different for different tasks, and they're different for different people.

50:38But understanding this opens a whole world 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 got to breathe and actually lower stress level.

51:34So 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 stress. It's a personality trait. But like the curves, there is no right or wrong answer. Some individuals, some people score high in neuroticism, some score low.

52:28And 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 But if you go back to the stress curves, like 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 in 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.

53:15You 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.

54:11That'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.

54:57We 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 patience. 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.

55:50whatever 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 decisions that require strategic patience. 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.

56:37That's a big decision. And they might I 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 learned 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. The most successful people, 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.

57:24Yeah. 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.

58:18So 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, what is the mathematical tipping point at which you have interviewed sufficient candidates? The mathematical formation was if you're interviewing a secretary, but it can be applied to – Yeah, it could be hiring someone. Maybe I should change my example. No, no. The romance one is better. The romance one. 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 get politically incorrect here, but OK, we'll do it.

58:58No, this is fun. Yeah. So zero to 100, you know that 10 years from now, what's the average sort of person? It's 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 0 and 100. Right. Okay. That's starting from the end point. Now, here's the question. If you're in year 9, what do you do? So you start working backwards. If you're in year 9, then you know that your expectation for next year is that you meet a 50.

59:41a 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 nine is 49 or below. Right, right. And then you keep working backwards. And the interesting part is the curve 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?

1:00:23Because 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 should exercise strategic patience early on and kind of think about it. 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.

1:01:20If 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, personally, I like McDonald's, but I try not to eat it too much. Right. And if you apply this to the marriage scenario, you also have to consider your BATNA, your 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 BATNA, which is simply not making the hire, is untenable for the scope of the business because the business needs to make that hire no matter what.

1:02:05Same 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 costs in the marriage example. It might be divorce. Right. Heavy back-end load, 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 percent value.

1:02:47Right. It's kind of the same idea. So thinking from the end point 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.

1:03:32So 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.

1:04:20The higher up you go in an organization, the more you need to be a listener as opposed to a talker. We just talked about how we think leaders need to make a bunch of quick decisions, but wise leaders actually learn when to exercise strategic patience. We all think leaders have to build consensus, but good leaders actually very often need to make unpopular decisions and on and on. So there's a flip side to how we typically think about leadership and psychology and the research in positive psychology, sports psychology, even personality psychology really helps us think about leadership, self-improvement in different ways, in counterintuitive ways in a lot of places.

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1:06:52We touched earlier on the big five personality traits. I was wondering if you could talk about that. Because that's another acronym, OCEAN. 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 revealed my own rankings as well.

1:07:38So 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.

1:08:19You 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 revealing where I am here and have celebrity examples as well. If 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.

1:08:59Low 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 the low 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.

1:09:40I 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 in 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.

1:10:22You'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.

1:11:04They'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 in conscientiousness 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 it is kind of an awesome trait to have but there are dark sides to being on the extreme side of it.

1:12:16I 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 we are opposites on all of these. I would put myself rock bottom low.

1:13:00Oh, really? Yeah, absolutely. Absolutely. I'm a chaos monster, a total chaos monster. 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. He's 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.

1:13:37The 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, and I won't spend too much time defining it because I think we all have kind of an idea of what this trait is. But if you're an introvert, you prefer spending time alone, all else equal.

1:14:23It doesn't mean that you 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 we 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 we're the exact opposite. Yeah, we're the exact opposite on all of these. Of all the trade. Did you want to add anything on extroversion?

1:15:02Yeah, I used to think that I was an introvert because we actually had a guest on the show, Jen Graniman. 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, which requires spending a lot of time alone. I love to read, 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 I could then have energy in order to sustain the time that is required for being alone to do my work.

1:15:50And 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 are disagreeable.

1:16:34And again, I have all these celebrity examples. And there's like famous shows where the lead character is very disagreeable. Gordon Ramsay. 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. 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 develop 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.

1:17:16So 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.

1:18:03I 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.

1:19:00So 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 in agreeable. Yeah, yeah, exactly. I think in my case, just professionally spending my life in money management, and in this 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?

1:19:51If 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, your immediate, do you remember your immediate response? You said, or you might think that your idea is better than everybody else's, right? Which is low agreeableness. Yeah. And it was interesting that that was your immediate response because I found that so unrelatable.

1:20:22So 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. They think that - The little dose of disagreeableness is not a bad thing. I said leaders have to make tough decisions sometimes.

1:20:59You 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, it's 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.

1:21:48Yeah, yeah. You know, I need to be more committed to our vision. We're really the exact opposite. Yeah, the complete opposite. We have one more trait and maybe we'll be the same there. So neuroticism, I think, is self-explanatory. There 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 don't I haven't found a celebrity who doesn't self-report as anxious and high in neuroticism. So there seemed to be a correlation with creativity and also with wanting the limelight.

1:22:31There 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 Neil 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. There might be – and 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.

1:23:15Going back to the curves we talked about earlier, the Yerkes-Dodson's curve. So are we still opposite? You know, I think on this one I'm 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. Pretty chill. Mark Manson wrote this book. Yeah, I love him. Yeah, The Subtle Art of Not Giving an F. Yeah, he's fantastic. I love that book.

1:23:54Great 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 very, very few things about which you care greatly. And that's really my approach to life. And 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.

1:24:38I 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 in 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.

1:25:25It 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 say you 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.

1:26:09Anyways, I could go on. But personality psychology, I hope that's a big contribution from my book, is so much broader 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 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.

1:26:47I 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, the sound bite. Yeah. Here we sit down, we have time, we talk, we go in unexpected directions. Maybe my next book idea on net percent 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 now. The best one to start is probably to find me on LinkedIn just with my name.

1:27:22But you can find me on everywhere now on Instagram. And I even have a TikTok now. Wow. I don't know if I should. Yeah, the best way is on LinkedIn. Perfect. Thank you. Thank you.

1:27:42Thank 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.

1:28:19You 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.

1:29:14Sebastian 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, 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.

1:30:02It 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.

1:30:48And 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.

1:31:37Those are three key takeaways from this conversation with Sebastian Page, the chief investment officer at T. Rowe 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.

1:32:11That's the number one thing you can do to spread the message of FIIRE. Number two, please subscribe to our newsletter, affordanything.com slash newsletter. absolutely free and we share insights you will not find anywhere else. Affordanything.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 affordanything, where we have videos of all these interviews so you can watch it.

1:32:50facial 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 affordanything. 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.