Welcome to the Huberman Lab podcast, where we discuss science and science-based tools for everyday life. I'm Andrew Huberman, and I'm a professor of neurobiology and ophthalmology at Stanford School of Medicine. My guest today is Morgan Housel. Morgan Housel is a partner at the Collaborative Fund and an expert in private wealth generation and management. He is also the author of the spectacularly bestselling book, The Psychology of Money. And today we talk about the psychology of money. We talk about how money can change your psychology. We talk about how most people tend to lie at the extremes of either saving too much money or spending too much money, and we talk about how most people get it completely wrong when it comes to framing in our minds what money is, what its real value is, and its ability to generate happiness within us.
And no, I am not going to tell you, and Morgan is not going to tell you, that beyond a certain dollar amount you don't increase your happiness, because as we all know, money cannot buy happiness, but it can buffer stress. We acknowledge that from the outset, and then Morgan goes on to explain that really what we're seeking when we talk about seeking wealth or money is freedom. Freedom is really about independence, and that if we are constantly in pursuit of wealth, well, then we are not truly free or independent. So today's discussion is as much about being happy, being free, feeling independent, feeling free of stress, as it is about this thing that we call money. So in other words, Morgan explains not just how to generate and manage money, monetary wealth — he explains that — but he also explains how to organize your life in and around this thing that we call career, the pursuit of wealth and happiness. And I can think of few topics as important as today's topic.
I read Morgan's book, The Psychology of Money, and I loved it. I also love today's discussion because I'm certain that after it's done, you will realize that you've probably been thinking about wealth and money incorrectly in a number of ways, and you've probably been pursuing it incorrectly in a number of ways. But by asking yourself certain probe questions that Morgan raises today and answering those questions, you can arrive in a place where your relationship to money and your pursuit of it really clearly matches your particular goals. Before we begin, I'd like to emphasize that this podcast is separate from my teaching and research roles at Stanford. It is, however, part of my desire and effort to bring zero-cost-to-consumer information about science and science-related tools to the general public. In keeping with that theme, I'd like to thank the sponsors of today's podcast. Our first sponsor is Wealthfront.
I've been using Wealthfront for nearly a decade as my high-yield cash account, and I absolutely love it. Personally, I'm sometimes hesitant to invest money given the risks involved, so I often prefer to keep it in my Wealthfront cash account, where I'm able to earn 4.25% annual percentage yield on my deposits, and you can as well. With Wealthfront, you can earn 4.25% APY on your cash through partner banks until you're ready to either spend that money or invest it. With Wealthfront, you also get free same-day withdrawals to eligible accounts every day, even on weekends and holidays. The 4.25% APY is not a promotional rate. There's no limit to what you can deposit and earn, and you can even get protection of up to $8 million through FDIC insurance provided through Wealthfront's partner banks. For same-day withdrawals, just start your withdrawal as late as 9:00 p.m. Eastern to one of over 550 eligible banks and credit unions to get it the same day, and it takes just a few minutes to transfer your cash from the cash account to any of Wealthfront's automated investing accounts when you're ready. There are already over a million people using Wealthfront to save more, earn more, and build long-term wealth. Earn 4.25% APY on your cash today. If you'd like to try Wealthfront, go to wealthfront.com/huberman to receive a free $50 bonus with a $500 deposit into your first cash account. That's wealthfront.com/huberman to get started. Now, this has been a paid testimonial of Wealthfront. Wealthfront Brokerage isn't a bank. The APY is subject to change. For more information, see the episode description.
Today's episode is also brought to us by BetterHelp. BetterHelp offers professional therapy with a licensed therapist carried out entirely online. Now, I've been doing weekly therapy for well over 30 years. Initially, I didn't have a choice; it was a condition of being allowed to stay in school. But pretty soon, I realized that therapy is an extremely important component to overall health. Now, there are essentially three things that great therapy provides. First of all, it provides good rapport with somebody that you can trust and talk to about any and all issues you want to. Second of all, it can provide support in the form of emotional support or directed guidance. And third, expert therapy can provide useful insights. With BetterHelp, they make it very easy for you to find an expert therapist who you resonate with and can provide you those benefits that come through expert therapy. Also, because BetterHelp allows for therapy to be done entirely online, it's very time-efficient. It's very easy to fit into a busy schedule with no commuting to your therapist's office or sitting in a waiting room or looking for parking — none of that. It's all done online. If you'd like to try BetterHelp, go to betterhelp.com/huberman to get 10% off your first month. Again, that's betterhelp.com/huberman. And now for my discussion with Morgan Housel. Morgan Housel, welcome.
Thanks so much for having me. Happy to be here.
I'm excited that you have a new book coming out next year about the art of spending money. Is that right?
That's right. You got it.
Today I want to talk about how to think about money. What is it? How do we frame it within our historical context, meaning our personal historical context? Because I think we all and each think about money a little bit differently. And then talk about what is the best use, or in some cases, not use, of money. This is a topic that, you know, could go in any number of different directions, but my goal here is that people will get a better understanding of what money is, why they work for it, and really how to make it a true asset to their lives as opposed to something that is forever out of reach in terms of amount or what they expect it to bring them.
Great. Looking forward to it.
Great. So your book starts off with this notion that no one is crazy. It's in fact the title of the chapter. Does that mean that people are rational about money?
Oh, I think it's very different. What I meant by no one is crazy is that it is so easy for people to look around at society and how people are spending their money and saving their money and investing their money and say, why? Why the hell would anybody do that? Why would you waste your money on this? Why would you hoard your money like that? And actually think, if you peel back the onion layer of what's going on in those people's lives, no one is really that crazy with how they spend their money or save their money. It makes sense to them in that moment. My brother-in-law is a social worker. He works with very disadvantaged kids — kids who are abused at home, who don't have homes. And a lot of those kids, not surprisingly, do very poorly at school. They misbehave, they get in fights, they don't go to school. And it is so common for those kids that the teacher will look at those kids and say, why? Why are you acting like this? Why don't you do the right thing? It's so obvious. And he says there's a phrase in social work: all behavior makes sense with enough information. That if you look at what those kids are dealing with in life, it would all make sense to you why they are misbehaving at school. And I think that's a powerful idea for a lot of things in life: that all behavior makes sense with enough information. And you can really apply it to money too. That you could easily tie how I spend my money today and save my money today based off of the experience that I've had in life, how I was raised, where I was raised, how old I am, the generation I was born into — all things that are outside of my control. And it is very common to look at people who are spending a ton of money. Well, there's a story behind that. They're spending a ton of money because they want some — you know, for a lot of them, they want some sort of attention. They're trying to get people's attention. Maybe sometimes they're trying to cover up a hole. Maybe they actually are really enjoying it. People who are hoarding a lot of money, there's a story there too. They experienced something that's causing them to do that. And I think this is really important for two reasons. One, it forces you to realize that there is not one right way to manage money, to save it, to spend it. You got to figure out what works for you, and what works for me might not work for you. There's not one answer, and it's not like math. Like in math, 2 plus 2 equals 4 for everybody, and in money, it's like you got to figure it out for yourself. It's almost like your taste in food or your taste in music. Like, just find out what you like and do that. The other thing is, I think you become less cynical about other people's decisions, and you don't spend all your day saying, look at that idiot spending their money in a stupid way. No, it's just you got to figure it out for yourself, and I think you become happier when you're a little less cynical about how other people are doing it.
For most people, including myself, the whole notion of money and safety are very closely linked. You know, do we have enough resources to take care of ourselves plus a bit extra? One hopes. I guess I would include in taking care of oneself, buffering one's anxiety about not having enough money — that's part of the psychological care — and also taking care of others that we might be responsible for or simply want to take care of. That's very closely linked to notions of how much and what type of education to get, right? I mean, I think everyone presumably at some point goes through the mental gymnastics of: is it worth it to get an advanced degree? What majors should I focus on? Are there any jobs there? When I went to school to be a neuroscientist, a cardiologist, a friend of our family said, why would you go into neuroscience? There are no jobs in that. There were plenty of jobs in neuroscience, and still are. I wouldn't say that most of them are high-paying jobs. So, you know, we know that higher education doesn't always scale with higher income. As we grow up and move into the world, you know, we're thinking about how to integrate all these different things: what we want to do because it's interesting versus what will make us money. In your experience and observation, and in writing your book, is there some sort of path to cut through these different considerations? I mean, when we talk about money and wealth, you know, what should we really take into consideration? Is there some sort of checklist?
I mean, it becomes a pretty vast space. I believe that you get the best work out of yourself in terms of going after things you're really interested in.
Yeah, but you know, there may not be money in things that are highly interesting to somebody. I asked Daniel Kahneman a very similar question about 10 years ago. Kahneman is a world-renowned psychologist, won the Nobel Prize in economics, passed away a year or two ago.
And he said the trait that you need to do well with money over time, no matter who you are, is a well-calibrated sense of your future regret. What are you going to end up regretting in the past? I think at the highest level, that's how you should base all of your financial decisions: is, will I regret spending this or not spending this? Will I regret making or not making this investment? Now, much easier said than done. I think most people do not fully understand their own sense of regret, what they're likely to look back and say, I wish I had not have done this. The other thing is that it changes over the course of your life. I'll give you a perfect example. I'm a big saver, have been for my entire adult life. What if, heaven forbid, if I were on my deathbed tomorrow, would I regret the vacations I didn't take, the cars I didn't buy? The answer right now is absolutely not. I would feel so good knowing that my wife and kids are going to be okay. So I would take so much pleasure in knowing that I did not spend that, I saved it for their protection. Will I still feel that way if I'm 80 years old? Then maybe I will look back and say, I should have lived a little bit more. I should have given my money away while I could have seen it being given away. So it changes throughout the course of your life. But I think if you're always thinking through the lens of what am I going to regret, it's never about YOLO or about like, oh, you know, save today so you can have it for tomorrow. I think that's too simple to think about it. You have to know what you're going to regret in the future and look back. And everyone's different. What I will regret might be very different from what you will regret.
Very interesting story from Jeff Bezos. He talked about when he started Amazon back in, I think it was 1994. The reason he started it, and he knew that there was very little chance it was going to work when he first started it, but he said, if I do not try this, I will regret it, and if I try it and it fails, I won't regret that. That's an amazing story that talks about his entrepreneurial spirit. The other thing, when I first heard that story, is, bless him, thinking that I do not have that personality. If I devoted my entire life and my family's money and my parents' money to a startup and it failed, I might regret that. I admire and I'm grateful for the people who do not have that vision as he does, made the world better, but everyone's sense of regret is going to be a little bit different. And sometimes this sense of what one is likely to regret, if we have access to it at all, because it sounds like we're not very good at anticipating this, as Kahneman pointed out, most people lack a well-calibrated sense of future regret. That's going to change over time, so it's dynamic. And here we're talking about investing in two-year or four-year degrees. We're talking about investing one's time in a particular profession. And I think we come up with all these explanations post hoc about, well, you know, I went to that company, I went into that line of work, I spent 10 years there, or the startup failed, but I learned a valuable lesson that then, you know, really supported me in a future endeavor. And so we rationalize our poor choices from the past in ways that allow us to, you know, connect the dots, to sort of steal from the famous Steve Jobs speech. And yet all of this really says that we are very poor at placing our current experience and our past experience into any kind of future projection of ourselves. You talk a little bit about this in your book, and this really, you know, sunk in for me in a major way: that we don't really know or anticipate how we are likely to change as we get older.
Right. So there's a thing in psychology called the end of history illusion, which means that you are very aware of how much you've changed in the last 20 years. You are maybe smarter, wiser, your beliefs about things in life have evolved, and that's true for most people. But most people, if you actually dig into it, they think — if you say, who will you be 20 years from now — they think they'll roughly be the same person they are today. There's always this belief that I've grown so much in the past, but I'm done growing, because it's hard to project how you're going to be different in the future. A lot of that is, if I tell myself 20 years from now I'll have very different beliefs about politics, whatever it might be, what I'm effectively admitting is what I believe today is wrong. And you don't want to believe that. Everyone wants to wake up and look in the mirror and say what I believe today is the right thing. It's just like a self-justification of your own beliefs to make it easier to go about the day: what I believe right now is the right thing. And maybe you have a little bit of doubt around the edges, but most of it is what I believe is true. So you don't want to believe that you're going to adjust and adapt those beliefs over time. So it becomes difficult to take a truly long-term view and make a decision today that is going to be something that you're not going to regret in the future. As I've always framed this, I think the only antidote to this, of trying to get around this problem, is avoiding the extreme ends of financial planning. And a lot of people are on the extreme ends. Like on one end, you have the FIRE movement, these people who save 90% of their income and they want to retire at 28, kind of that kind of thing. And on the other hand, you have like the YOLO crypto traders who are like, doesn't matter, like just throw it all down and let's see what happens. Those extreme ends are where you are most likely to regret at some point in the future. And the crypto — look, I think a lot of those people are young and they have time to make up for their mistakes. I did a lot of really dumb things with my money in my teens and 20s. But I think a lot of them, that's where they are most likely to look back. You know, it's one thing to lose a lot of money in your 20s and say, ah, it doesn't really matter. But then when you're 48 and trying to put your kids through college, that's when you're going to look back and be like, I wish I hadn't done something like that. So those extreme ends have the highest odds of future regret.
In order to, as I described it before, carve a path through this for people, I'm wondering if people generally fall into either one or the other category of, as you described with Bezos, you know, not wanting to regret not having done something. Okay, so I think of that in sort of pseudo-neurobiological terms as being drawn toward the possible dopaminergic or other rewards of having succeeded. Really, that's what he's envisioning, presumably, is the pain of not having given himself the opportunity to succeed.
Yeah, okay, that's one way to put it. And then the other path would be just avoiding the pain of loss. And there are a lot of studies, I think Kahneman did some of them in fact, that people work a lot harder to avoid the pain of loss than to gain something. But in thinking about the people I know across various wealth scales and different ages, it seems that some people are just more motivated to try new things because they like doing new things, they like the sense of reward that can come from doing those things, and so it really is painful for them to stay in the same place financially or otherwise. Other people, they like the sure thing, they like reliability, and you can see this in a lot of domains of their life. I mean, I don't want to extrapolate this to all aspects of their life, but you know, some people like dogs that, you know, the entire breed is known for rarely ever having bitten somebody. Other people like to raise Cane Corsos, and while I'm sure there's some really nice, loving Cane Corsos out there, they occasionally bite, and when they bite, it's serious.
So, you know, are we really talking about a propensity for risk versus safety? And do you think that people fall into more or less two camps on that?
I think it's true that some people would go nuts if they took the safe path, and even if they're doing it in the name of like, I don't want to regret this, but they need some sort of variability in their life, they need to go out and do things. The other element is we don't know the paths that we didn't take. And I'll give you a personal example of this. 20 years ago, I was enrolled in Pepperdine, but I didn't go. I was enrolled, and just at the last second I transferred, so I never actually attended. But I was all enrolled, and of course I think, what would my life have been if I had gone there? Because the school that I transferred to, I met my wife, started my career there, and it's easy for me to say, God, I'm so glad I did not go there, because my life would not be what it is today. But the truth is, maybe it would have been fine, maybe it would have been better. You never know the paths that you didn't take, where they're going to end up. So back to Kahneman's point, a well-calibrated sense of your future regret, but nobody knows the paths that they didn't take and where those would go. So it just makes it very difficult to have any idea of which path you should be on in that end. So I think just avoiding those two camps of the extreme ends of it. But again, as I said earlier, I think that is actually more than half of people are on some sort of extreme end of spending way more than they can or saving way more than they need to. There's a fat-tail distribution in how people manage their money, and so that's quite a few people. And I think that's one of the reasons why we live in a society that is richer than it's ever been, by far — not just at the top, but at the median level, the average family is richer than they've ever been. But because we manage it in such extreme ways, is it making people happier? Are we happier today than we were 40 years ago or 100 years ago? There's not a ton of evidence for that, because managing it in a way that's actually going to make you happier and reduce your regret and live a more meaningful life is much harder than earning it and accumulating it over time.
When I was growing up, you would see a mixture of newer cars, including some very nice cars, as well as a lot of older, kind of beaten-up cars driving around. Nowadays, of course, this varies by area, it's actually rare to see really old, beat-up cars. You see some really nice old cars that have been restored, but that's a different thing altogether. And I assume this is because of credit, that people can now buy things on credit. How has the ability to purchase things on credit changed the way that we think about money generally? I know people who have tremendous credit card debt and I think are now at the point where they figure that they're never going to pay it off. They're just going to probably not live long enough to pay it off, and they're sort of comfortable with that, which is kind of scary to see. And some of them aren't even particularly big spenders, they just accrued this debt early enough and they seem to get out from the trap of that. I know other people who, you know, like myself, pay off my credit card bill every month. I'm like, you know, I hate the whatever it is 18-plus percent interest, even if I'm one day late. I'm like, you know. And at the same time, I'm not somebody who likes to purchase many things. I'm not a things guy. I, you know, I own one or two watches, one truck, like I'm just not a things guy. But I certainly have my own psychological relationship with money that after talking to you today, I'm sure I'm going to realize is not optimized either. Right. So it's easy to point fingers at people in these different groups, but going back to this issue of credit, how has the ability to own and use things that we don't really truly own, basically to exceed our income level in terms of the number and type of luxuries that we can enjoy, changed the way that people think about money and use money? Because today's discussion in your book, we're talking about money as if it's something that we have, but credit basically is living outside your means by definition.
I think the knee-jerk response would be, oh, it helps you pull your consumption forward so you can have more toys that you would not have had in a different era. And I actually think for a lot of people it's the opposite, that there are a lot of people that have holes in their life, challenges in their life, and a very easy answer if you're not happy with your life and you have a hole you're trying to fill is, well, if I had more money, this problem would go away. And in previous generations, previous decades, you could not just go out and have a ton more money. You earned your money from your paycheck, that was what you had. Today, it makes it easier to try to fill that hole in your life with money, and so you can keep on getting more and more and more. And for a lot of people, they will wake up and say, oh, if only I had that car, my life would be better. And they go buy that car, and they still feel the same. So it's like, ah, you know what, if I had that car and that watch, then I'd feel better. They get the watch, they feel the same. Ah, you know what's missing? The house. I got to go get that fancy house. It's a continuous spiral, and since you can finance all of that, it makes it easier and easier to go on that spiral. Will Smith made this incredible realization I loved from his biography. He said when he was poor and depressed, he had hope because he could tell himself, one day I'm going to have money and all these problems will go away. And then when he was rich and depressed, he was still depressed, and he lost all of his hope because he had more money than he could ever spend, so he could not tell himself, if only I had more money, these problems would go away. And so for a lot of people, the availability of credit is giving them, I think, a false sense of hope that's keeping them on this hamster wheel of, if only I had this bigger house, this nicer car, all these problems that I wake up with every morning would go away. And it keeps you on that path, which I think if you actually don't have access to that much money, you're more likely to wake up and say, what is this hole? I need to fix it in a different way. It's health, it's relationships, it's purpose, whatever it might be, rather than trying to put a Band-Aid of credit over it.
So interesting. I sometimes think about the phrase money can't buy happiness, and my immediate impulse is to respond with, well, somebody with a lot of money probably said that. Not because I think money can buy happiness, but money can buffer stress. I have friends who've had children recently who have night nurses. They're looking a lot more rested than the ones that don't because they can't afford them. And on and on. If you have a medical issue, right? I mean, there's this whole world within hospitals that we won't talk about in this episode, but there's this whole world about wealth and how one is actually even treated as a person in a hospital. There's a lot of knowledge behind the scenes about people's income level when they come into a hospital. People are going to go wide-eyed when they hear this. They'll get shuttled to different rooms, different conditions that allow them to sleep better, recover better. Health outcomes depend on this. I mean, and on and on. So money can't buy happiness, but it certainly can buffer stress and it can drive outcomes. So how should we frame that, especially if we are in the pursuit of acquiring more money, more wealth? Because a lot of people are...
Money absolutely can buy happiness. It's often, though, an indirect path. And what I mean by that is, will a big fancy house make you happier? And the answer is probably yes. But the reason it might is because it'll make it easier to host friends and family, and that's what's actually making you happy. It's those extra connections with those people. Does going on a nice vacation make you happy? An expensive vacation? Yes, because you're going to form memories with your kids, with your spouse, with your friends while you're there. That's what's making you happy. So you can't say that money doesn't make people happy. It does, it obviously does. The other thing that's important is what really makes people happy in their core is some sense of purpose. There's a great quote from the movie Boiler Room where he says, people who say money doesn't buy happiness don't have any. I think there's a lot of truth to that, that people who become richer say, of course I'm happier now than I was when I was poor. Of course I would never want to go back there. But often what's happening is the reason that you are happier when you're rich is because the reason you got rich is because you found some sort of purpose. You built a business, you were successful in your career, and that gave you a good sense of purpose and identity. And where you see the opposite of that are lottery winners who become rich, but not because they made a good investment, not because they built a business, not because they're successful and their peers like them and whatnot. They just got lucky. And those are the people — so many studies — that winning the lottery will not make you happy. It might for a very short period of time, but over time it doesn't, because you didn't get any added purpose. You can't wake up in the morning and say, I built this business, I did it, I'm so successful, I got my PhD, I did — there's none of that. You just got lucky, and so that's not going to bring you much happiness. So money does make you happier. I think it can for everybody if you learn how to spend it in your personality and whatnot. Spending a lot of it, spending a ton of money can make you happier. I think there's almost no limit to it, but it's different for everybody, and it's often a roundabout way. I think a lot about this when if I go on an expensive vacation with my kids, let's say that's a 10 out of 10 in terms of just happiness, memories and whatnot. But actually what was making me happy was spending uninterrupted time with my kids. So staying home and playing Legos on the living room floor with them, that might be like an eight and a half, because that's what's making me happy. You just have to figure out the actual purpose. I think a good formula for a pretty good life at the simplest level is independence plus purpose. You need to have a purpose that is bigger than yourself that you are chasing — family, religion, work, whatever it might be, different for everybody — and you need to have the independence to make sure you can do it on your own terms rather than chasing somebody else's goal. That's at the highest level of psychological well-being: independence and purpose. And money is not one of those things, but you can easily see how money can help those things. Money brings you independence. It can allow you to find your purpose in a bigger way. You're not at your boss's whim. You can do whatever you want. You're independent. So using money as a tool can make you happier. Spending money can make you happier, but it's not the thing that is making you happier. It's just a tool to do other things and acquire other things that are actually making you happy.
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I love the story about spending time with your kids on vacation as unstructured time, as well as spending unstructured time with them playing Legos at home. My graduate advisor sadly passed away very young of cancer. She was 50, and I knew her kids really when they were in the womb, because she was pregnant with the first one. And I attended the memorial service there, and it was an incredible thing because people gave their speeches, and her kids got up, and by then they were, I think, about 8 and 11 or so. And I'm sure they had a great many thoughts and feelings that they didn't share, but the one thing that really stood out is they appreciated how much unstructured time their mom had spent with them. It wasn't this like big event or something, it was all the unstructured time that she had spent with them, and that was very inherent to the kind of person she was. And so that really stuck with me. And God willing, you live a very long time, but I think for anyone listening to this, and because of the statement that Kahneman made, that we are not well calibrated to sense a future regret, you know, that unstructured time is perhaps one of the most valuable things that we can give our relationships, both the people we engage in them with and ourselves. And I don't think it's discussed enough.
There's a gerontologist named Karl Pillemer who wrote a great book called 30 Lessons for Living. And what he did is he interviewed about 100 centenarians, and he just said, tell me about your life, what advice do you have for the rest of us? And there's a section of his book about money, and he says of the 10,000 centenarians he interviewed, not a single one of them, looking back at their lives, said, I wish I earned more money. Not one. But virtually every one of them said, I wish I spent more time with my kids, I wish I was nicer to people, I wish I spent more time with my friends, my family. That was universal, but earn more money was not in there whatsoever. That stuck with me.
And as you point out, however, earning money allows for the opportunity to spend time with kids and loved ones of all kinds.
It can, but I think there are a lot of people for whom it's the opposite. If you are a partner at a law firm, you're earning a ton of money, congratulations, great, you probably have a big house and a nice car. You're also probably working 100 hours a week, and the things that might fill your soul — it's different for everybody, this is not universal — but what might actually make you happy, spending time with your friends, your family, exercising, sleeping late, is not available to you. So that's why it's independence plus purpose. And I think there are a lot of people who make millions of dollars per year and have no independence whatsoever. They're completely tied to their boss's whims, to their work, to their employer. They might love it, I'm not saying you shouldn't do that, but they have no independence at all. I think there are billionaires who have no independence because they are so tied to doing things whether they like it or not. And that's, I think, a lot of people go crazy in that situation because they're like, I'm making $5 million a year, but it's not making me any happier. It's like, yeah, what would make you happier is independence, and you are pushing yourself away from that. You were probably more independent when you were 15 and had no money than you are at 40 making millions of dollars a year.
So then in an ideal world, which of course doesn't exist, one would find a vocation or a pursuit that they found really meaningful, would work really, really hard, would make enough money to then, I guess, retire and spend unstructured time with the people you love, and then simply stop working. In this model, that clearly is an artificial model that I'm creating here, because it seems like after a certain point, provided you earned that money through an effort that you felt was meaningful, presumably with people you enjoy, or even if it wasn't, you found it meaningful, you make that money, then it seems that it's all about human interactions at that point.
Yeah, and what's true is that that dream scenario might be true for 1% of the people, that they can earn enough money to retire young and then pursue whatever they want. There's an entrepreneur named Felix Dennis who wrote a book many years ago called How to Get Rich, and there's a quote in that book. He was at the time maybe in his 70s and worth about a billion dollars, something like that, and he said, if I knew what I knew now and I could do life over again, I would make as much money as I could, retire at age 35, and plant trees and write poetry. And he's like, looking back, that's what I should have done. But let's leave aside that, of course, not everybody can do that. What did he do? He kept working. He kept working even though he didn't need more money. Absolutely. This is...
Interesting because people who do achieve a high degree of wealth at a young age seem to keep going, and we could make all sorts of assumptions about why it is that they do that — expectations from others, that their ego, literally their sense of self in some way or perhaps entirely, is tied to the sense that they're still in pursuit, that it's somehow a failure to opt out at that point.
Yeah, I mean, we can speculate all day, but what this guy Felix said really rings true. It seems like once people reach their number — and it's going to be different for everyone, it's not going to be a billion dollars for everybody — once they have enough resources for themselves and the people they need to take care of, maybe a bit more as a buffer, it makes no sense to continue on that path.
Well, I think there are a lot of people — I think you're one of them and I'm one of them — who enjoy what they do. And if you and I got to a point where we were completely financially independent, all the money we'll need for the rest of our life, I would still be a writer, you would still do your research, because we enjoy it.
Absolutely. And I think if you are the kind of person who says, 'once I hit my number, I'm done,' you probably don't love your work at all, almost by definition. I think what's dangerous though is when the money itself is part of your identity. I like being a writer, I like the process of writing, but if I were to say I have to keep writing books because I need to make more money, I just have to have a higher net worth, particularly if I'm past the point of taking care of my family, then at that point I think money is actually like a liability. It's a financial asset and a psychological liability. It's taking control over what you're doing in life if you're saying I have to have more of it. I mean, if there's anything in life where you're like, 'I have to have more,' and even when I get more my satiation point goes higher and higher — what is that? It's an addiction, and that's it's controlling you at that point. So there are a lot of people for whom money is a financial asset and a psychological liability, and I think that's actually true for some of the richest people in society, that the more it grows exponentially over time — the richer you become, the more addicted to having more grows on you.
In the backdrop of everything we've talked about thus far is the biology of reward. Dopamine, of course, being a molecule that people associate with reward, but it's really about the pursuit of reward. It's about more. And it's no coincidence that dopamine is involved in generating movement in the body. This is why people with Parkinson's, who are depleted in dopamine, can't generate movement. And it's also involved in generating cognitive movement and pursuit, paying attention to things. There is this idea that I've been pushing for a few years now that kind of throws its arms around a big literature on dopamine that says that addiction is a progressive narrowing of the things that bring you pleasure. But your definition is actually much better.
I realize addiction is a progressive narrowing of the things that bring you pleasure and/or a sense of safety. Yeah, right, because here we're not talking about making more money to enjoy things more. We're talking about making more money to avoid the sense that pain is coming or that we are vulnerable. And for a lot of people that pain is a social pain — that they're not going to climb high enough on the social ladder, that their peers are earning more than them, that their neighbors have a bigger house, whatever it might be. That's the pain that they're trying to avoid, and that is a game that cannot be won, because gratefully, thankfully, there are a lot of very wealthy people in this world, and no matter how much money you're making, there's always somebody out there who's earning more, living better, and has a bigger house and a nicer car. That's always the case. So if you are on that path of 'I need to earn more to climb that ladder so I can have more than the next guy,' that's a game that you cannot win.
And I think that game of comparison too also grows the wealthier you are. Billionaires are more likely to compare themselves to other billionaires than the minimum wage worker is to compare themselves to somebody making $10 an hour or whatever. You are more likely to compare your lifestyle the richer you become. And since that comparison to other people is what gives you a feeling of inadequacy, there's this irony — it's hard to wrap your head around it and come to terms with it — but some of the most money-insecure people you'll ever meet are the richest people you'll ever meet. People who live in a 15,000-square-foot mansion, 'yeah, but he's got a 17,000-square-foot mansion.' Things that ordinary people would never consider that just consumes their life. And again, that's the point where money is like the psychological debt, it's a psychological liability, it's controlling them. It becomes an integral part of their identity. They wake up in the morning and look in the mirror and they see a person who makes money. That's their identity. 'Who are you?' 'I'm a person who makes money.' And that's when your process of chasing it just becomes like a detriment to your happiness over time. You're not using it as a tool to live a better life, you're using it as a yardstick to measure yourself against others.
I fundamentally believe that all forms of addiction are fundamentally a fear of death. They're a way of shrinking our aperture on time perception so that we're in pursuit of something. And for people that can place their addiction within work, it has this feedback of being quote-unquote functional as opposed to dysfunctional. This is also true for people that are continually seeking awards within their profession. I mean, there are these professions — academia included, but other professions — where people are constantly pinning awards on one another, and it gives this illusion of progress when in fact there's a whole world of things happening. Now, these people often have quite healthy families and relationships, so they're not mutually exclusive. But you know, I think I know a few billionaires — not many, but I know some — that are very happy. They tend to be the people that are still working and in pursuit of new things, avid learners.
But perhaps by virtue of the work that I do, which is focused on science but also health, you know, the modern billionaires that I'm aware of seem to be very focused on not just making money but also trying to secure their place on the planet for a very long time. Not through legacy, although I think many of them like to provide for the next generations in their family, surely, not so much by putting their names on the sides of buildings anymore — this used to be the way it was done — but rather trying to secure their health status. Because the one thing that money can buy, sort of, is better health care, right? But money can't buy you more years of your life except by virtue of the things that you are willing to not do and do behaviorally. Yeah, you still have to exercise, you still have to get your sleep, you have to avoid certain things. And so the modern billionaires often are talking about what they're doing for their health as opposed to their yacht, their car, etc. This has now become the kind of metric for comparison. Blood profiles become a sort of point of bragging for people. It's pretty interesting, especially given that you just look back about 50 or even 100 years and further back, and the more wealthy people were, the less physical labor they were doing. Now they're doing more physical labor to try and live longer. So what are your thoughts on the relationship between physical health and money? I mean, obviously there's a sweet spot there, but there's no pill that people can purchase to live longer, right?
I view it in the negative sense of the people who work to get money so hard that it takes a physical toll on their body, and that is so incredibly common. And that's another form of debt that you can easily measure — your net worth and your income, you could put a number on it very cleanly. It's much harder to measure your health. And I think it's easier for people to say, 'yes, I'm only sleeping five hours a night and I'm on my third divorce and I'm overweight, but I'm making a lot of money this year,' because one is very easy to measure and the others are much harder — your happiness, your health, whatnot. It's harder to measure that.
And I do think too that if you are very wealthy, particularly the very, very wealthy, you get so accustomed to 'I can snap my fingers and literally get anything' — a Gulfstream jet, a mansion, whatever — I can get it right now. But health is like this last elusive thing that, by and large, you cannot purchase. And I think that drives a lot of people crazy. And that's why if you can have anything in the world by snapping your fingers and getting it, then you eventually move towards what's the thing that you don't have, and that's immortality. And I think there's a long history of that going back to the robber barons. John D. Rockefeller was obsessed with it, Andrew Carnegie was obsessed with it. If you can have everything material in the world, you're still going to have desire. And ordinary people can sit around and dream and say, 'one day I'm going to have the mansion' — or not even a mansion, 'one day I'm going to have a house of my own, I'm going to have a car, I'm going to send my kids to college.' Everybody wants to dream. So if all that is a given — you have all the money you could ever spend — you still want to dream. So what do you dream about? You dream about immortality. And so I think that's been the case for a very long period of time.
What's interesting too is that there was a historian who looked back at the British peerage. He got a lot of data on how long people lived at various points in the UK economy, and what he found was that until about, I think it was 1750, the richest members of the UK had among the shortest lives. The poorest people were some of those who were living longest. And he dug into it — like, how could this be? The richest people die the fastest? And what he found is the richest people were the only ones who could afford all the quack medicines and the sham doctors who were just poisoning them. They were poisonings back in the day when we knew nothing about medicine. So I think the idea of 'I want a better life and I should be able to buy that' — there's a long history of that backfiring on people as well.
Yeah, there's a lot of excitement right now about stem cells and treatments that currently are not available in the United States but are available out of country. And I get asked about these a lot. Most of them don't have FDA approval yet. Some of them probably never will have FDA approval. We'll probably talk about stem cells another time. Do you think you see this though, where the wealthiest people are spending money on treatments that you either know are not going to work or are very questionable? Yeah, all the time. And that might backfire on you, that might make you less healthy.
Oh, absolutely. I mean, I'll just point out I don't have anything against stem cell therapies. I think they hold great potential. But there is a true story about a stem cell clinic down in Florida prior to the FDA bringing the gavel down on them, of injecting stem cells into the eyes of wealthy people who could afford the treatment. These people had certain markers for macular degeneration and other things that can cause blindness. And guess what happened to these people? They all went blind. Right. So that brought the gavel down on stem cell therapy generally in this country.
A lot of people are getting infusions of stem cells and related things out of country. They're coming back and they're walking and talking. And they're calling me and they're asking what my thoughts are. And I have a lot of thoughts. I mean, I think that the basics of longevity are clear, right? You want to avoid head trauma and environmental toxins — those things are real. And if you have certain mutations, like BRCA mutations, you need to be more careful about cancer and avoid smoking, all that stuff, right? Alcohol turns out to be pro-cancerous and things of that sort. But then it's physical activity, it's nutrition, it's social connection, it's sleep, it's sunlight — it's all the things that I've talked about in this podcast and that other people talk about as well. But yes, very wealthy people are looking for that edge to live longer. And it is true that when you start to layer in all the basics of dos and don'ts, all the behaviors, and then you start to augment that with a few extra things, you get the sense of more vigor that sort of suggests they may live longer. But we still don't know, right? We still don't know, with the exception of exercise, that we absolutely know can enrich mitochondrial density, give people more energy and vigor, etc. Most of this is still a big question mark.
See, I could see a very wealthy person using their money if you are very sick and you have a rare cancer to throw the kitchen sink at it — every excellent million-dollar therapy or whatnot. Absolutely. I think it's a different animal if you are already pretty healthy to say, 'I'm going to throw my money at trying to become immortal or close to it,' whatever it might be. That's a different thing.
I totally agree. And I think what we're talking about here is, as you said it fairly quickly, but I think I want to highlight it because I think it's really important: that even people who have billions of dollars still have a sense of yearning for something that's missing, or that they don't have. And in some cases that's the sustaining factor to their well-being. You say it's also good to be in pursuit, right? Maybe that's with dopamine too, right? We always want more. It's the pursuit of more. And if you're wealthy enough to have everything, you still have a part of your brain that's like, 'yeah, but I want more, I want more, I want more.' And if you've exhausted the physical part of the world, that material part of the world — and let's leave aside the billionaires — even the average ordinary American family that owns a modest house, owns a car that functions well, owns nice clothes, will send their kids to a state school, by a lot of historical definitions they have everything. They have everything you would ever need. But you're always yearning for more. It's always this pursuit of, 'well, what else don't I have?' And I think nothing you want more than anything in life is what you want and cannot have. That's what you're going to chase with all of your effort — is a thing that you want and cannot have. I think that's where health comes in for a lot of these people.
As long as you think that there's a possibility you could get it, the dopamine circuit loves you wanting what you feel is just out of your reach but might be possible to achieve. I mean, this is why people throw so much money away gambling. But maybe with social media it makes it seem so that virtually anything is within your reach, because it used to be before social media that your view of the world was mostly your neighbors and your coworkers and your siblings. And now everybody's view of the world is a curated highlight reel of the most extreme events in the world. So if you are a 15-year-old scrolling through Instagram, then what looks within your reach is a Ferrari and a private jet and a mansion, in a way that didn't exist when you and I were kids. And I think it makes the aspiration level that much harder.
And real examples of people who went from nothing to immensely popular or wealthy, etc. I mean, gosh, I would say about once a month somebody walks right up to me and says, 'just watch, someday I'm going to have the top podcast in the world on blank.' And they're trying to seed this thing that they've seen on social media, which are examples of people — you know, it used to be called rags to riches, but you know, they're parallels in different universes. But there's a famous musician, I think his name is Ed Sheeran, who there's still a video of him early on saying like he knew he was going to make it. If you watch the Conor McGregor documentary, it's amazing, I think it's called Notorious on Netflix. Even if people aren't into MMA, they should at least watch the first part. He was videotaping himself very early on and he made this prediction that he was going to be a world champion, and then he ends up being a world champion, right? This is a great anecdote that Kanye West used to practice his Grammy speech when he was walking to the train because he couldn't afford the car. Like when he was an absolute nobody, he was practicing his Grammy acceptance speech — of just absolute ambition of where you're going.
Yeah, and I don't know if this anecdote is true, but there's the anecdote that I heard that, you know, Matt Damon and Ben Affleck practicing their Academy Award acceptance speech in the schoolyard when they were kids, and then they gave their speech and they were, you know, laughing about that.
I grew up skateboarding. So when I first got into it, the Tony Hawks and the Mike McGill's and Steve Caballero's — these were the names at the time — these luminaries, right? The gap between us and them was so huge. By the time I was a junior in high school, my best friend at the time, Paul Zuanic, sent in a videotape of himself to a company called Planet Earth. He got sponsored. Next thing you know, we're in the shop watching him skateboard, and within a year or two he had his own pro model. So I think social media gives us not just the sense of what's out there, but it gives us very salient examples of people that went from completely unknown to extremely known. Just this last year, there's the, you know, the 'Hawk Tuah' girl, you know, she was interviewed outside a bar or something like that. She now has a very popular podcast, she has sponsors, she's known — literally became one of the most famous people in the country, right? And has a financial stream now of income through her podcast. And so this raises the sort of idea in people's minds, or the possibility however remote, that if somebody puts a camera in front of you, by virtue of one thing that you say, you could suddenly be an internationally known person and potentially go from quote-unquote rags to riches. And if you look at the studies, when you ask teenagers what is your preferred career, what do you want to be when you grow up — it used to be astronaut, used to be doctor, used to be entrepreneur — now it's influencer by far is what people want to be. It seems like the quickest path to fame and wealth, and for a lot of people it is.
My sister-in-law is a kindergarten teacher. She has a girl in her class who has over a million followers on YouTube as a kindergartener. Like, that didn't exist when you and I were kids, or it was so rare. But now, enough people know stories like that — if there are a few of them, enough people know stories to give you the sense of hope of, like, 'well, if they could do it, I could do it too.'
Well, I'll tell everyone out there that if you think that fame is what you want, fame restricts your freedom. It does not increase your freedom. There's a great quote from Naval where he says what you want to be is rich and anonymous. That's the sweet spot that you want to be. The opposite, you are poor and famous, and that's the hardest spot to be in. But if you can be rich and anonymous...
Because I think there's a really important concept with money that I call social debt, which is when the money that you have influences, it changes how other people think of you and even maybe how you think about yourself. And you can measure your asset — it's not actually debt like it's not like debt you repay the bank, but it is very much a debt in terms of it is an anchor on your happiness that you have to repay. And fame is the ultimate social debt. And for a lot of people, their social debt of fame is more than the money that they made from whatever made them famous to begin with. And there's this anecdote from Tiger Woods where he said he loves scuba diving because when he's 100 feet under the ocean is the only time in the world where people aren't taking pictures of him and asking things of him and gawking at him. Like, that sucks. Not that you have a lot of sympathy for somebody like that, but it does suck. Like, you can measure his net worth very quickly — 'what's your net worth? Just show me the number.' How do you measure the liability of feeling like you have no privacy unless you are scuba diving? That's a hard thing. And at various levels, a lot of people have that. Even if you earn a modest income and all of a sudden your friends, your family start saying, 'hey, I heard you got a raise, I could use a little bit myself' — that's a social debt they want you to pay at dinner and whatnot. And of course, maybe you're happy to do that, you're happy to share it, but let's not pretend that there's not a little bit of social debt and liability that comes with every added amount of income that you have.
I mean, so much of social media is just by definition, in terms of the number of followers being displayed, etc., a number of likes and comments being displayed, is designed to set up these metrics of comparison. Yeah, the smartest minds of the generation work at Facebook and Instagram and Twitter to figure out how to give you FOMO, how to generate a little bit more dopamine, and they're very good at it.
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One thing that I wish somebody would do — maybe it's been done — is you mentioned earlier this not typical but I guess semi-common thing of an article will come out and say, you know, the five things that people say on their deathbed, or that they look back and they mention that they wish they'd spent less time at work, they wish they'd spent more time with their kids or more time in nature perhaps. Has anyone ever just asked people directly what were the things that they are most proud of, or the things that they really feel brought them tremendous meaning, as they're passing away? Because it's related, but it's kind of the inverse of the same question.
Yeah, Warren Buffett brought this up one time. He said a good way to think about life is — it's kind of grim — but he said write what you want your obituary to say and then work backwards to live up to it. And in that situation, if you were to write, like, what do you want your obituary to say, most people would say, 'oh, I hope it says Morgan was a good father, he was a good husband, he helped his community, he was admired by his co-workers.' That's what I want it to say. And for a lot of people — it's different for everyone — but it would be something like that. And why Buffett said it was important is because nobody who's writing their preferred obituary would include the size of their house, how many horsepower their car had, how nice their clothes were, because everybody knows it doesn't matter. And it's like — I forget who made this idea — there's a thing between resume virtues and eulogy virtues.
Yeah, that was David Brooks.
David Brooks said that. Thank you. Resume virtues are, you know, how much money you make, your degrees, everything. Eulogy virtues is 'he was a great father, he was a great friend, he helped his community, he was funny.' And I think most people really aspire to have eulogy virtues, but they spend all their day chasing resume virtues. Resume virtues can be great — I want a good education, I want a good income — but what you're really trying to chase is to use those things to gain more eulogy virtues at the end of the day. So I think if you think about it through that lens, a lot of these things become clear. And that's why, like I said, going on a great vacation with my kids — if that's a 10 — what's really fun about that is spending time with them when I'm detached from work. I'm not checking my phone every seven seconds, I'm just spending hours with my kids giving them my full attention. That's what made me happy. The view was great on the beach, cool, but that's what made me happy, and I can do that at home, can't I? And so that's the difference between like going to Maui is a resume virtue, spending time with your kids is a eulogy virtue.
Why is it, do you think, that even though we've probably all heard by now that, you know, compounding interest is great, right? You put in, let's say, a small or a moderate amount of money into even just a savings account that's at a couple percent — you know, varies year by year and with the economy, of course — or into the markets, that over time if you quote-unquote set it and forget it, just kind of put it there and walk away, that you're likely to make X percent over time. And you can look at the plot, you can look at that line upward and to the right — it almost always is a jagged line drifting upward to the right — and even just scroll over and see, okay, at age whatever I'm going to have X number of dollars. And that value is often very high relative to where one's current wealth is, even if they're a student or they have very little put away. We all hear this, we can see it, you can run the models, it's almost trivial. And yet people don't do that, even if they have the income to save. Is it that hard for us to project our emotional state and the sorts of things that we integrate in terms of life meaning and value into the future, that most people just don't do that? And why do you think that is? I mean, I'm not asking you to play neurobiologist here. I mean, I think we both agree that time perception is a complicated thing. But you would think that people would just sort of get it. But we're not rational. Most people aren't rational in that way. They don't save, they don't invest, and they don't compound interest, and so they end up with a lot less money than they could have and a lot more regret.
Yeah, I think there's two ways to think about this. One is — my Michael Batnick phrased it this way — he said if I ask you what is 8 plus 8 plus 8 plus 8, you figure that out in five seconds, that's an easy one. If I said what is 8 times 8 times 8 times 8 times 8, even if you're a math nerd, it's too hard, you can't figure it out. We're not wired for exponential thinking, we just can't do it. And therefore, even if you show people the numbers — 'hey, invest a small amount, retire with a million dollars' — I think it's so counterintuitive that most people see that like, 'huh, okay, that doesn't really seem right, doesn't really pass the sniff test' — how big the numbers can get, how quickly the numbers can get big.
The other thing is if you tell a young person, 'hey, you have 50 years in front of you to invest, that's great, time's on your side, when you're 70 years old you're going to have $10 million' — 50 years from now might as well be 10,000 years from now. You're talking about people who don't know what they're going to eat for dinner tonight, and you're talking about like, 'hey, let's talk about the year 2077.' Like, it's so far out there. Even if that's the right way to think about it, it's a tough way to think about it. And time perception, you mentioned, is so difficult for people. If I said you're going to get punched in the face in 10 seconds, like, that's a fear and you're like, 'oh, I don't...' But if I said someone's going to punch you in the face 50 years from now, you're like, 'I'll deal with it when I get there.' It's so easy to put out of sight, out of mind.
And the other thing is Warren Buffett talked about this a lot. He said — actually it was Charlie Munger who said this — he said when teaching finance to young people, people either understand it instantly or never. It's like some people are just wired to get it and some people aren't, and that's always been the case. Munger often said, all the time, he said the iron rule of math is only 1% of people can end in the top 1%. And that's why for a lot of people, yes, you should save and invest for 50 years. Let's not pretend that that is easy or that everybody is psychologically able to do it. Some people are wired differently, of course, as they are with health and intelligence and lots of other things. So I do think there's a thing for financial education of getting people to understand what is possible, but I don't think we'll ever live in a world where everyone gets it and does it. I don't think that world has ever existed, and I think it will never exist, because it's not math, it's not a spreadsheet, it's behavior. And we now live in a world where we understand the dangers of smoking and highly processed foods and whatever it might be, but even if we know it, people still do it because it's behavioral, it's not intelligence. So showing people the numbers and getting them to do it is night and day.
Do you know how they got people to stop smoking, in particular young people? It wasn't by scaring them about their health. Turns out the most effective campaign to get especially young people to stop smoking was to hijack the inherent rebellion of youth and to display ads of wealthy older people in rooms full of smoke. So it became us as the youth rebelling against them, the older generation that are trying to take our money. It had nothing to do with health. I love that. And it absolutely worked.
Yeah, and I have friends that work on this sort of thing in the context of public health, as it relates to all sorts of public health initiatives. And the effective way to change human behavior as it relates to health is to incentivize fear or to hijack fear of dying. But even fear of dying is not sufficient as compared to hijacking these cross-generational, let's just call them frictions, that exist. So I found that to be interesting.
You used a math example of 8 plus 8 plus 8 plus 8 versus 8 times 8 times 8 times 8, and you said that the human brain is not capable of exponential thinking, or most people's brains are not capable of exponential thinking. I think you either intentionally or inadvertently hit on something really important. I don't know that the dopamine reward system, which is the fundamental currency of pursuit and reward across all time scales — it's kind of wild, right? One neuromodulator — and there are other things involved that modulate that modulator — but one neuromodulator is involved in reward pursuit across all time scales. Whether we're playing a — let's say we're both competitive enough to play a game of chess or checkers, dopamine is motivating the pursuit for the win, or a four-year degree, or an eight-year degree, or why you would want maybe your kids to win a soccer game — like now you're like a third-personing dopamine, right? It's across all time scales, all scenarios, it's incredible, and across many species. So it makes me wonder, and I'll have to ask some of my colleagues that work on these dopamine reward schedules for a living, whether or not the dopamine reward system actually can do exponential math.
It might not be able to do exponential math. It might be that the pursuit of water, the pursuit of mates, the pursuit of food, the pursuit of shelter — which is what these dopamine circuits evolved under the constraints of — whether or not they're even capable of doing exponential thinking, or if it's like the marshmallow test, which got misconstrued in many ways, but it's like, yeah, would you rather have one right now or two in the future?
I think for a lot of people it's just like there are some people for whom they're wired so differently for this. So you hear stories about like the old, the old very wealthy people, the old billionaires, of when they were 20 years old they would not get a haircut because they knew that $3 haircut would compound into $100 by the time they're older. They were just so wired from birth to understand this and to have a very long perception of time to do it. By definition, that's the rarity. Most people are not like that. And I don't know if they should be either. I don't know if you should be the kind of person in your entire life who is always saving for a future and never enjoying what you have too. Like, that could lead to a lot of regret as well. And there are those people.
So let's parse the marshmallow test. The marshmallow test, I think initially done at Stanford, I think it was at Bing Nursery School or something like that, or maybe somewhere at Stanford — if I'm wrong, someone will correct me in the comments, of course. For those that don't know, is they brought these really cute kids into rooms and they put the marshmallow in front of them and they told them they could eat it now or they could wait and they could get two marshmallows later. And then they videotaped them, and the videos are absolutely delightful of the kids, you know, distracting themselves or having the marshmallows talk or taking a little piece of the marshmallow. I mean, it reveals as much variation on human self-constraint behavior as you could possibly imagine, and they're really interesting, as you know. I would like to know whether the children that were able to wait and therefore get two marshmallows were trying to resist the temptation or whether or not they were being pulled forward by the anticipation of two marshmallows.
My understanding — and maybe this is not complete — but my understanding, at least part of it, was neither of those two things. The kids who did the best and resisted it were the ones who distracted themselves. They weren't even thinking about the marshmallow. They would sing a song, they would start playing with their shoes, they'd play with another kid. And the ones who could not resist are the ones who just sat there staring at the one marshmallow that was tempting them. That's too hard to resist. Almost everybody will fail that. It was like the environment that they put themselves in.
But they weren't thinking into the future about how great it would be to have two marshmallows?
I don't think so. I think they were — because they're kids, they're so distracted, they have the memory of a goldfish — they wanted to just do something. They'd sing a song, they'd play with their shoes, they'd play with their friends, and then by dint of doing that, all of a sudden they had waited long enough to get the two marshmallows. I think that was at least part of it. And I think that's true for a lot of people too. Think about the stock market, where there's so much temptation to always watch it and see what it's doing because we have CNBC and there's the ticker and the lights are green and red and whatnot. For a lot of people it's impossible to watch that, or even worse, in Robinhood you get a push notification on your phone — that's too hard to resist. But you know where you see very good investing behavior, where people do a really good job? It's when you invest automatically every paycheck into your 401k and you forgot your password, because that environment is against temptation. There's nothing to do, you forgot your password. But if you're just bombarding yourself with stimulus of what to do, most people cannot resist that.
My way of dealing with social media — I would say compulsion, not addiction — is I now, one could take an old phone. I actually got a phone specifically for social media, so I have Instagram and X on that phone. I don't even recall the number of that phone. I AirDrop things onto it if I want to post, and I do what Rogan calls 'post and ghost.' So you post and then it goes into a box, because otherwise I'm just absolutely blown away by how much time can be sucked away. All of it. You tell yourself, 'I'm going to just look at social media for a moment,' and then you're pulled down some rabbit hole. It's just incredible the way they've designed these algorithms to get you, right? And of course I like social media, I teach on social media, this conversation will probably be — you know, fragments of it will be on social media. But I think that people don't realize how compulsion-inducing the dopamine circuitry is. And once you start getting pulled down it, you're a different organism altogether.
