← Something You Should Know
Something You Should Know
The Secret World of Credit Cards & The Science of Building Unshakable Confidence
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- [00:01]
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- [01:37]
Mike Carruthers
Today on something you should know. Why do people blush and is there anything you can do to stop it? Then the fascinating story of the credit card and the explanation of why they all seem to get mailed from South Dakota.
- [01:52]
Chris Hutchins
Citibank, Wells Fargo, Capital One, they all opened up their credit card centers in South Dakota so that they could charge an amount of interest that would allow them to profitably run these cards. And Sioux Falls, South Dakota became the credit card capital of the U.S. also.
- [02:05]
Mike Carruthers
How to adopt the characteristics that will make you appear more powerful and simple strategies to be more confident. And the difference between confident people and the rest of us.
- [02:17]
Juan Bendanya
Confident people or courageous people feel fear, doubt, worry, anxiety just like the rest of us. The difference is that they stopped letting fear make decisions for them a long time ago.
- [02:30]
Mike Carruthers
All this today on something you should know. You know, I remember the first time I had to hire someone and I thought it would be quick and easy. But posting on random job boards and sorting through applications and waiting for the right person is. It took forever and I never thought I was very good at it. I really wish I'd had Indeed back then because they make hiring fast and simple. When it comes to hiring, Indeed is all you need. Instead of struggling to get your job post noticed, indeed's Sponsored Jobs helps you stand out. See, your post jumps right to the top for candidates you're looking for so you reach the right people faster. And it works. According to Indeed data, sponsored jobs get 45% more applications than non sponsored jobs. That's a big difference. What I love is how fast it is. In fact, in just the time I've been Talking to you, 23 hires were made on Indeed According to Indeed data worldwide. And with Sponsored Jobs, there's no monthly subscription, no long term contracts. You only pay for results. It's no wonder more than three and a half million employers worldwide use Indeed to hire great talent fast. There's no need to wait any longer. Speed up your hiring right now with Indeed and listeners of this show will get a $75 sponsored job credit. To get your jobs more visibility@ Indeed.com something just go to Indeed.com something right now and support our show by saying you heard about Indeed On Something you should know. Indeed.com Something terms and conditions apply. Hiring Indeed is all you need.
- [04:18]
Juan Bendanya
Something you should know Fascinating intel, the world's top experts and practical advice you can use in your life today. Something you Should Know with Mike Carruthers.
- [04:31]
Mike Carruthers
Have you ever wondered why people blush? Does it serve a purpose? Well, that's the topic we're going to start with today. Hi and welcome to this episode of Something youg Should Know. Blushing is what Darwin called the most peculiar and most human of all expressions. So why do people blush? Well, it appears it does serve a purpose by conveying to others genuine remorse, regret, or embarrassment. It works in much the same way as crying does. Like when you're remorseful about something, it shows appeasement and allows other people to forgive you more easily. Blushing also tends to be uncomfortable for the blusher, so it tends to be a deterrent to repeating the behavior in the future. Blushing is involuntary and uncontrollable, according to a study in the journal Emotion and interestingly, people of all colors and ethnicities blush. It's just that Caucasians are the easiest to spot. And that is something you should know. You know, a lot of listeners have asked, how can I best support something you should know? And the answer is become a premium member. For just a few dollars a month, you'll help keep the show going and get some great perks too. You'll get daily bonus mini episodes filled with fascinating intel plus, you'll get every regular episode commercial free. Get all the details@syskpremium.com I would imagine somewhere within arm's reach of you, there is a credit card with your name on it. Probably more than one. We use credit cards a lot, but where did they come from? What was the first credit card? How did the credit card business evolve into this seemingly complicated web of rewards programs, frequent flyer miles, cashback bonuses, and extremely high interest rates? It's a fascinating tale and one that affects just about all of us. Chris Hutchins is an expert on credit cards. He is the creator of a website. It's called allthehacks.com and he has a really good podcast also called all the Hacks, which I know you'll like it if you try it. Hey, Chris, welcome to something you should know.
- [07:01]
Chris Hutchins
Thanks for having me.
- [07:03]
Mike Carruthers
So the idea of credit, particularly in business, the idea of credit goes back a long way. But the idea of carrying around this little plastic card that basically says, I'm good for it, that's a fairly new invention. And when did it begin?
- [07:21]
Chris Hutchins
Let me take you back to 1850, where I think the kind of corporate formation of it started. But it wasn't for probably another century before cards existed. But Amex was probably the first company that we think of for credit cards that was created back in 1850. And funny enough, two of the three founders were Henry Wells and William Fargo. So the guys who eventually started Wells Fargo were the ones that actually started Amex. And they were both started as express mail companies. Amex focused on the east coast, and then those founders left to start Wells Fargo a couple of years later to focus on the West Coast. But that was not about credit cards. Right. 1891, Amex kind of moved more into financial services with travelers checks. And it wasn't until around 1950 where we saw our first thing that kind of resembled a credit card, and that was from Diners Club. And so they created this card that allowed people to charge meals at restaurants and pay for it later. It was almost like you could have a tab at a restaurant, but it could be across multiple restaurants. And they had about 20,000 people use it in the first year. And about 10 years in, they had almost a million members. So that was the. The first thing that kind of resembled what we would think of as a credit card today. But you had to pay it off each month. It wasn't something where you could carry a balance. And it was bank of America in 1958, created the Bank Americard. And that let consumers Carry a balance and pay interest. And while it's not legal today, they had what seems like the craziest customer acquisition tactic, which is they sent actual credit cards unsolicited, that worked to 10 million people. And they started with a test pilot of 60,000 people in Fresno. And they just blanket sent credit cards that work to tons of people. And to no surprise, 20% of those people were completely delinquent on their bills within the first year. And the US government passed this Truth in Lending act in 1968 that prohibited unsolicited credit cards. But believe it or not, that was how the first credit card got out in the ecosystem.
- [09:29]
Mike Carruthers
I remember BankAmericard. In fact, I think my very first student credit card was a BankAmericard. And then there was Master Charge. It was master charge, not MasterCard at the beginning. And American Express has been around for a long time, as you pointed out, but that's about it. I mean, now there's Discover Card, but really it seems like there's only a few. And the club membership is very small. There aren't a lot of other credit cards.
- [09:59]
Chris Hutchins
Yes, there have been a handful of new entrants recently, but a lot of them kind of sit on top of the rails of these legacy providers. And you could really separate it into two. There's the issuers, so this is your Chase, your Bank of America, and then there's the payment processors, which would be Visa, Mastercard, Amex, Discover. And they're separate in the most case, except Amex actually happens to be both the issuer and the processor. And same is true with Discover. And so there's really only these four big, at least in the US processors that everyone has to work with. But lots of banks can issue credit cards. And so if you look, I just recently got a credit card that, you know, has one brand, but if you look at it, it was issued by First Celtic Bank. So there are tons and tons of issuers. Almost any bank could issue a credit card. Many credit unions issue credit cards, but they all run on the rails of Visa, MasterCard, Discover, and Amex, at least.
- [10:57]
Mike Carruthers
In the U.S. but lots of organizations issue their own credit card. I mean, schools, colleges, universities, cruise lines, as well as obviously airlines all have their own credit card. Could I, could I have a something you should know credit card?
- [11:15]
Chris Hutchins
Yeah, you actually could. So a lot of affinity organizations, you know, membership groups could offer credit cards, colleges and offer them to alumni and students. And at the end of the day, it comes back to the business model of credit cards. And so in the early days, there were no rewards. Even amex launched in 1958. And they. They had no rewards, even though they had, you know, millions of customers by, you know, the 60s, 70s. And it wasn't until 1981 when frequent flyer programs kicked off. American launched first. Delta and United caught up that next year, they were very nascent. They were more like coffee punch cards than they were what they are today. But in the mid-1980s, American launched the Advantage credit card. It was the first rewards card, and it was tied to American Airlines. And very quickly, everything changed. In the mid-80s, Diners Club launched the first points program, the Discover Card. At Super Bowl 20, launched the cashback Discover card. At the time, that company was a subsidiary of Sears. And then in 1991, Amex launched membership rewards, where you could transfer points places. But it wasn't until that point in time where all of a sudden we thought of cards offering rewards. So prior to that and continuing until today, there's a business model behind all of this. So when those cards get charged, there's what's called the merchant discount fee. And it probably ranges somewhere between 2 and 3%. Could go a little lower in some cases, and that's what's being paid for by the merchant. So if you're buying something online, you're buying something at a store, someone pays that, and that gets split out. Some of it goes to the issuing bank, some of it goes to the Network, the Visa, MasterCard, Amex, some of it goes to the processor. So if you're online, there's a technology company called Stripe that powers a lot of e commerce. It's if you ever paid for something at a farmer's market with square, they're a processor. And so, like, about 25% of the fee goes to the processor. And, you know, a small amount, maybe 0.102%, goes to the network, and then the rest goes to the issuing bank.
- [13:21]
Mike Carruthers
So this merchant discount. So in other words, if something costs $100, maybe $2 of it gets split out to these other organizations.
- [13:30]
Chris Hutchins
Yeah, I would say two to three dollars. And so in a world where consumers don't care about rewards, you could go and say, hey, let's create the something you should know credit card. And there will be a bank or a credit union that would say, hey, how about we have this card? It offers no rewards, but we'll give you 1% of it. And so membership organizations use this as a way to say, hey, if you want to support the member group, you could go use our card or a university alumni card and you know, they university or the membership org would get a percentage of that interchange. However, what happened was these rewards programs got so lucrative that you couldn't really compete if you were also paying some percentage of that revenue to the organization. So it's really hard to launch your own credit card and be competitive with the cards that Chase and Amex and all of these other major issuers are offering.
- [14:26]
Mike Carruthers
And so when an airline. Because airlines seem to be like the big player in the rewards game, right?
- [14:34]
Chris Hutchins
Absolutely. I would say they. There have been tons of wild stats. I think in 2024, Delta said that 1% of US GDP is transacted over their American Express cards in a year. I think they said almost. But like, the fact that you're thinking of the amount that goes through a Delta Airlines card being that high really says something. But the most interesting stat here is if you actually look at airlines and you look at their balance sheets and you try to understand how they function as companies, you will find that they are much more like banks that sell their rewards currencies to these issuers of these credit cards than they are like airlines. So I'll take an example. American Airlines as a company has a market cap, meaning the value of all of the stock of $6 billion. But if you just look at the value of the loyalty program, it's about 25 and a half billion dollars. So the loyalty program is worth more than the entire airline, which would imply that the airline itself, minus the loyalty program, is actually not worth, is worth a negative amount of money. But of course, you couldn't have the loyalty program without the airline. So it's almost as if these airlines are operating solely to be able to prop up a loyalty program that is their true driver of business.
- [15:54]
Mike Carruthers
But the business it's driving is travel, correct?
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Chris Hutchins
Yes, yes, exactly. Like people love to travel. People love to be rewarded in the form of aspirational vacations, trips, things that, you know, maybe cost money and fall out of their discretionary budget. But with miles and points and rewards, you can go on these trips and they feel free.
- [16:16]
Mike Carruthers
We're discussing the story of the modern day credit card and my guest is Chris Hutchins. He is the creator of the website allthehacks.com and host of a podcast called all the Hacks. You know, it usually takes a lot for me to get excited about clothes shopping, but with fall and cooler weather coming, I'm actually looking forward to stocking up at Quint's. See, they've become my go to for fall staples that actually last cashmere denim, boots, you name it. The quality really holds up and the prices are a lot lower than you'd expect. See, here's the thing. Shopping online, my biggest worry is always is it really gonna look and feel as good when it shows up as it did online? Well, with Quince it always does. I've got a couple of their 100% Mongolian cashmere sweaters. They just start at 60 bucks and they are unbelievably soft. Their denim fits great and wears really well. And their leather jackets, I haven't bought one yet, but that clean classic look without the big price tag is very enticing. And what I love is that Quince works directly with ethical factories and cuts out the middlemen. So you're getting top quality fabrics and craftsmanship for about half the price of the fancy brands. I've got polo shirts from them I practically live in and people ask me all the time where I got them and I just ordered a new dress shirt. Look, if you want to keep it classic and cool this fall, upgrade with long lasting staples from quince go to quince.comsysk for free shipping on your order and 365 day returns. That's quince.comsysk free shipping and 365 day returns at quince.comsysk if you have struggled with your weight, you already have heard about these new weight loss medications that do seem to work for a lot of people. But maybe you think, yeah, well, but I've tried to lose weight before and I just can't do it. Well, two things these weight loss medications do seem to work for a lot of people and the fact is being overweight carries some serious health risks. It's worth checking out and hers can help. Hers connects you with a medical provider who will work with you to determine the best treatment option for you. If prescribed, you get medication as part of a doctor developed weight loss program complete with ongoing care check ins, medication adjustments and access to their online support at no additional cost. Hers weight loss plans are built around oral medication kits and GLP1 injectable options and oral medication kits start at just $69 a month with a 10 month plan when paid up front. Look, being overweight is no fun and it's not healthy. Trying to lose weight on your own usually doesn't work. Whether you want to lose weight, grow thicker, fuller hair or find relief or anxiety, hers has you covered. Visit forhers.com something to get a personalized affordable plan that gets you that's f o r h e r-s.com something forhers.com something weight loss by hers is not available everywhere. Compounded products are not approved or reviewed for safety, effectiveness or quality by the fda. Prescription required. See website for full details. Important safety information and restrictions. Actual price depends on product and plan purchased. So, Chris, before we get deep into the rewards programs, I want to go back and ask some more fundamental questions about credit cards, starting with As I remember, I don't know if this is still the case, but as I recall, there was a time when a lot of restaurants and retailers didn't take American Express. And I assume that was because American Express takes a bigger piece of the transaction than Visa or MasterCard. So my question is, is that or was that the case and is it still true?
- [20:31]
Chris Hutchins
So that's certainly part of the case. It does cost more to process an American Express card than many, many other. However, I just pulled up the average Cardholder for Visa, MasterCard, Discover. The industry average is is someone spends about $8,000 per card a year. And on Amex, the average cardholder spends about $20,000 per year. And if you look at the average transaction size, it's much, much higher. If you look at Amex, they have something about 8% of all the credit cards in circulation, but they are the second largest issuer by purchase volume, just behind Chase. So you could make a case that and if you were not Amex, you'd say, don't take Amex, it costs more money. If you were Amex, you'd say, definitely take our customers. They'll spend more money at your store. They'll spend more money at, you know, your restaurant. So that would be the argument for accepting Amex. And as someone who carries a lot of Amex cards, I would say it used to be much more the case that a restaurant might not take Amex or a retailer wouldn't. But I can't think of the last time in the US that I've had a problem using an American Express card. Overseas, I think that can be a little bit more of a challenge. So I would say if you want one credit card only and you're going to travel a lot internationally, it would be hard for me to make a case that it would be an American Express. But it's certainly easier than I think it has been in the past, and it hasn't really caused me any issues recently.
- [21:56]
Mike Carruthers
I would actually used to go to a restaurant in Malibu, California when I lived there years ago, that only took American Express. And I've never ever seen that before, but that's the only credit card you could use, which I'm sure caught a lot of people by surprise. Because while I imagine everybody who has American Express probably has MasterCard and Visa, not everybody who has MasterCard and Visa has an American Express.
- [22:23]
Chris Hutchins
Yes, I remember a restaurant in Brooklyn that was the same. And I think the way that negotiation would work is Amex would come in and say, will give you an even better rate if you exclusively take Amex. And so, I mean, that just seems to be the obvious reason why a restaurant would do that. Otherwise it wouldn't make any sense. So they say, you know, we have such great cardholders with tons in Malibu and you know, New York, if you just exclusively take us, we'll give you an even better rate. And so I have been to one restaurant, I don't know if they still do that, but that has happened to me once as well.
- [22:53]
Mike Carruthers
Was it a law or is it a law that because if you were going to buy something really expensive, it seems like you could go into a store and say, look, how about I give you cash and you deduct what you would otherwise have to pay to a credit card company to process that payment. I'll just give you the cash, lower the price.
- [23:17]
Chris Hutchins
So this is actually changing a lot. And being in California, I didn't really notice the changes as much as other states have. And so in many states now you can just charge a fee. You could say, if you want to pay a credit card, here's a fee to use that credit card. I think in California you can offer a cash discount, but you can't offer a fee or you can't require a fee for using a credit card. Now some stores might do that, even though it might not be, you know, within the rules and those rules might change. But I would say a lot of gas stations near where we are say, here's the cash price, here's the credit card price. And so I think that is happening. But at the end of the day, I think retailers understand that if you make it harder for a consumer to purchase, you might lose the transaction in its entirety. And so I talked to my brother in law who owns a tire shop and he was like, I could charge a fee, but at the end of the day, I don't want to turn people off because that 2 or 3% is not as important to my business as happy customers coming in and making their purchases and their transactions easy and smooth. So every merchant can choose how they want to operate. And if you had really, really high you know, priced items. Maybe you would say, oh, you know, the fee is really meaningful, so we would charge it. I know a lot of car dealerships will let you put your down payment on a credit card, but maybe only up to $1,000. And so if you were buying a $50,000 car, you probably wouldn't be able to put that entire amount on your credit card because it would be quite expensive for them relative to the margins they have on that vehicle.
- [24:48]
Mike Carruthers
Yeah, I do sometimes, because I have a Discover card and I sometimes use it. I do run into merchants saying, no, we don't take this cover. And I think, well, if you take all the others, what difference does it make?
- [25:03]
Chris Hutchins
I think ultimately they need to set up a relationship with a payment processor that supports all of them. And a lot of the online payment processors just make it really easy. They just out of the box support everything. But I imagine there are some legacy ones that, you know, maybe are more in store in person that just don't have it. So they would have to call and set up a new relationship and figure that out. And so they just never did it. But practically, I don't think it's very hard to be able to accept lots of different payment methods, but it might take some work if you set up all of your infrastructure for your company 20 years ago.
- [25:36]
Mike Carruthers
Yeah. Why are the interest rates on credit cards just ridiculously high? Either they're making just gobs of money or they're taking big losses because people aren't paying. Or it's a combination of both.
- [25:51]
Chris Hutchins
I think the combination of those things is definitely true. Right. There is a lot of delinquent credit card debt of people who can't pay their bills and ultimately get charged off. And so that high interest rate is not just entirely profit for all of these companies. That high interest rate actually wasn't something that was always there. So that all started back in the 1970s because there was a cap on all of these interest rates for most states. And in 1978, there was a Supreme Court ruling that allowed banks to charge the interest rate that was allowed in their state, even if customers lived in states with stricter caps. So in early days, there were caps on all these interest rates. And so South Dakota eliminated all of those caps. And if. Now, if you've ever gotten a credit card in the mail, you'll probably notice that many of them come from credit from South Dakota. And so Citibank, Wells Fargo, Capital One, they all opened up their credit card centers in South Dakota so that they could charge an amount of interest that would allow them to profitably run these cards. And Sioux Falls, South Dakota became the credit card capital of the U.S. and so historically, those interest rates weren't as high, but nowadays, for a lot of the reasons I mentioned, they are as high.
- [27:02]
Mike Carruthers
Well, back to the rewards programs. I think one of the confusing things is like, you know, which one do I. If you're accumulating miles on lots of different airlines, it's hard to get enough on that airline to do anything. Or like, how do you know what rewards program to do?
- [27:19]
Chris Hutchins
I think if you look at it from two perspectives, on the earnings side, the best cards for an individual person to use are the ones that reward them for the place they spend money. So if one individual spends all of their spending at a restaurant, there are cards that will earn 2, 3, 4, 5x points on restaurants or 2, 3, 4 5% cash back at restaurants. Those are going to be better cards for that person than a card that rewards you for groceries if you're not someone who ever goes to the grocery store. So that, I think, makes sense to most people on the whether you earn points, whether you earn flexible points or airline miles or cash back, that really depends on the person at hand. And I would say the ability to get outsized value over cash back generally comes from the ability to be very flexible with travel. However, I have lots of friends who come to me and say, hey, I'm not really flexible with my travel, or I don't travel that much. For those people, I think cash back can be a much more compelling outcome because they're not forced to think, okay, well, I want to take this trip. Is it possible to do with my points this time? How does it work? Can I find the right flights? Can I find them for all four people in my family? And that can make it a little bit more like a game, but a little bit more stressful for some people. So if you're not someone who is flexible with travel and interested in kind of playing that game, cash back can often be a lot more lucrative in terms of the value you'll get and the ease of using that value. But at the end of the day, I would tell everyone, whether you're playing points or cash back, you want to look for something that rewards you the most for how you spend your money. And there are plenty of credit cards that will give you a flat 2% cash back or 2x points. So I consider that the floor. And I say if you're not earning 2% back or 2x points on all your purchases, you're probably not doing the base level of optimization because you could get the Citi Double Cash or the Capital One Venture Card and get that kind of 2x2% on everything. So anything above that, you know, you can work your way to getting a lot more, but I think of that as the floor of what everyone should be getting.
- [29:26]
Mike Carruthers
Well, I love these, you know, peek under the hood conversations where we learn about things, especially something as ubiquitous as credit cards. I mean, we use them every day and I just like hearing the story. I've been talking to Chris Hutchins and the name of his website, which I suggest you check out is allthehacks.com and at that website you can also access his podcast all the Hacks, which I think you'll really enjoy. Thank you so much Chris.
- [29:54]
Chris Hutchins
Thank you so much for having me.
- [29:58]
Advertiser/Host
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- [30:30]
Mike Carruthers
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- [33:05]
Juan Bendanya
Hey, Mike. Happy to be here.
- [33:07]
Mike Carruthers
So I think a lot of us wish we had more confidence, more courage to step up to the plate, speak up more, take charge. So why don't we.
- [33:18]
Juan Bendanya
Yeah. I think what holds people back from being courageous or even feeling confident is the prediction of a negative outcome. They think the worst is going to happen. You know, 80% of our thoughts every single day are negative. And often they are about a future that hasn't even happened yet. You know, if you think of what worry is, worry is the anticipation of a negative outcome in the future. You know, it's us predicting the future. So I find that the, the difference between those that are courageous and those that haven't necessarily practiced courage is that courageous people see the doubt. They see the fear. They see the I don't know how this is going to go, but they go for it anyways. And they use, you know, action as an override switch as opposed to letting fear make decisions for them. You know, confident people or courageous people feel fear, doubt, worry, anxiety, just like the rest of us. The difference is that they stopped letting fear make decisions for them a long time ago.
- [34:33]
Mike Carruthers
So what's the connection? What's the difference? What's the relationship between confidence and courage? Because they seem very similar. But when you say that people who are confident or courageous basically feel the fear and do it anyway, it often doesn't look like that. It often looks like they don't care. They're not afraid. That's why they're doing what they're doing, because they're either convinced it's going to work out fine or they don't care how it's going to work out.
- [35:04]
Juan Bendanya
We've found, and in studying thousands of people, from CEOs to executives to people coming into an organization, to even students at a college university, that confident people, and we can sort of Dive into the difference between confidence and courage. But confident people just have a better relationship with fear, so they have a better relationship with being courageous. Because courageous people, courage is your willingness to put yourself into the moment of fear. Confidence is really the belief that you have in your ability. It is your self esteem, the way that you see yourself, right? So confidence is really the self image that you have, the self esteem, the esteem you have for yourself. While courage is your willingness to do something scary or do something hard or do something that is uncomfortable. So we've found that confident people just have a better relationship with fear, which in turn, you know, it helps them be more courageous because they're willing and understand that it's a part of the process. You know, that it's sort of the, the price of admission to do the hard things, to do the uncomfortable things. They have all of those same feelings. They just understand that fear and anxiety and worry and the judgment that comes with it all is just going to be a part of the process.
- [36:40]
Mike Carruthers
When you say confident people have a better relationship with fear, I don't really know what that means. What is it to have a good relationship with fear?
- [36:49]
Juan Bendanya
I think like any great relationship, it needs to be cultivated and nurtured and invested into. You know, you can't have a great relationship with a friend if you never see them. You can't build a great relationship with your partner if you never schedule the date night. So what I mean by relationship with fear is that they have more run ins with fear and self doubt and all of those different emotions that come up with those experiences by putting themselves into environments where they know they will be tested. Meaning the person that often doesn't develop confidence is one that is not willing to put themselves into the environments that will test their confidence. You know, it's easy to do the same thing over and over and over again, day in and day out. But that doesn't allow us to grow, that doesn't allow us to expand. So confident people, what I mean by they build a better relationship with fear is that they find more opportunities for fear. They raise their hand in the meeting, they volunteer, they public speak. They put themselves into an environment where maybe they're not entirely comfortable with it yet, but they understand that that is where all the growth lies.
- [38:16]
Mike Carruthers
So let's look at the people who don't have that. They don't put themselves in those situations. They don't have those interactions with fear. For fear of what?
- [38:29]
Juan Bendanya
The laundry list is long, but to name a few. The fear of rejection, the fear of judgment, the fear of losing something. And really that's the essence of it. Because why are people afraid? I'll give you the example. It's a popular example of public speaking. I don't think people are necessarily afraid of speaking in public. They're afraid of being judged. They're afraid of it not going well. So what are they going to lose? They're going to lose respect, they're going to lose love, they're going to lose admiration, they're going to lose an opportunity. So there's a loss there that we feel, and we equate those moments to a loss. So whether it's fear of judgment or fear of rejection or fear of failure, all of those things, you are losing something. If you fail at something, maybe you're losing admiration, maybe you're losing that opportunity, because maybe by putting yourself into that environment, if you were to win, it was going to give you all the opportunity in the world. But since you lost, since you failed, that the road is done, it's ended. So I think people are really afraid of loss of something, whether it is admiration or respect or relationship. And often that is manufactured in our minds. Like we think that if we fail at something, it is the end of the world. Or if we get rejected, we will never be successful at that thing again. Or if our business doesn't get funded, then we will be a failure for attorney. When the reality is those moments are just that, moments in time. And if we can see them as moments and say, I understand that failure is not a determination of who I am. It's actually a stepping stone for where I would like to go. And if we could see failure as research. It's like I'm just researching all the ways that don't work, as opposed to, I failed. Wow. I guess I'm a failure.
- [40:39]
Mike Carruthers
That's the thing. And what I was getting at is for fear of what? Because, yes, you might lose admiration or you might lose respect. And so what. But what you just said is, what I think is so true is.
- [40:53]
Chris Hutchins
And.
- [40:53]
Mike Carruthers
And then the world ends, that my world is over, that it's very catastrophic. It isn't just the fear of respect, losing respect, it's losing respect. And now that's the end of everything.
- [41:07]
Juan Bendanya
Yes, absolutely.
- [41:09]
Mike Carruthers
And it isn't. It never is. It just almost never. I mean, I can't imagine. If you failed at public speaking, your life is over.
- [41:19]
Juan Bendanya
Yeah. No one here. Here's a reality that I have to remind myself of constantly. There's this phenomenon, the spotlight effect, which all of us Experience. It is essentially a phenomenon in psychology where we think people are thinking of us all of the time. So we think there is a spotlight on us, and we feel as though we are the main character in everyone's movie when the reality is we are an extra with barely a talking part in most people's narratives. So people aren't thinking of you, they are thinking of themselves. So if we could just see our lives and the experiences we have as a part of. Sure, a bigger story. But understand that not everyone has their eyes on us all the time. 24, 7, 365. Because that makes people feel like their lives are an audition. You know, it makes people feel like they need to have it all together. And then the strategy becomes, I'll just fake it till I make it, because everyone's watching when the reality is they're not.
- [42:25]
Mike Carruthers
So if you're one of those people who doesn't feel generally confident, I mean, we all are confident in some situations, and we're all less confident in other situations. But. But we know those people that look very confident and we admire them and go, ooh, I wish I could do that. How do you get there if you're afraid to put yourself in those situations that will give you that confidence? How do you ever get it if you won't do that?
- [42:56]
Juan Bendanya
Yes. Great question. The simplest way at the very beginning of something is to borrow confidence from another area of your life. Here's what I mean. We all have different, you know, confidence scores in every area of our lives. For some people, they are a 9 out of 10. Confidence when it comes to their relationship, but when it comes to their finances, maybe they're a 2 out of 10. So we have to first look at what are the areas of our lives where. And I guarantee there is at least one area of your life where you feel you feel pretty good about your ability in that context, you feel. You feel pretty solid. And you look at that area. And this is something in personality psychology where the psychology of personalities, we have sort of different versions of ourselves that we bring to different contexts. You know, you're a kind of a different version of yourself with your friends than you are with your spouse, than you are with your parents, than you are with your siblings, than you are in work is just slightly different. So it's. I think one of the most beneficial ways that people can kind of start the process is to look at the areas of your life you feel most confident in and identify and sort of nerd out about. How do you see yourself in those contexts. What do you say to yourself? What's the language you're using in your mind? What do you focus on in that? And I've had the opportunity to work with a few professional athletes, Olympians, and understanding their psychology. And it's fascinating when you see an athlete that is a 10 out of 10 confident in their sport, but a 2 out of 10 confident in their relationship. And if they could just see themselves in the relationship as they see themselves in their sport, that's where you can kind of borrow confidence. Like, how do you talk to yourself? How do you see yourself? What do you say? What do you focus on? Like, what kind of body language do you bring to that context? And then just copy what you do over there and bring it over here.
- [45:12]
Mike Carruthers
I wonder how many people consider themselves confident. My guess is not, not a whole lot. No.
- [45:20]
Juan Bendanya
According to the research, 80% of people identify with low self confidence, not even moderate, like low in. In the US So it's a challenge because we are living in a time right now which gives us more reasons to doubt ourselves than to feel confident in ourselves. And we are constantly sort of playing to give, you know, a sports analogy. We are playing a game where the scoreboard is either a point for self doubt or a point for self confidence. And the challenge is self doubt for a lot of people is winning. You know, we post something on social and it gets five likes. There's a point for self doubt. Why isn't my content doing well? We ask for the promotion and it gets denied. Point for self doubt. We finally put ourselves out there and start dating and go through a breakup. Point for self doubt. You know, we say that we're going to get in great shape and we eat salad all week and we step on the scale and we gained weight. Point for self doubt. So the challenges, the scales are tipped, you know, pun intended. The scales are tipped in a way where most people that I run into personally score more points in a week for self doubt than they do for self confidence. So if you look at every experience you run into as sort of these, like, I'm getting points on the board, the majority of us, and I've even found it for myself. I score at times far more points for self doubt than for self confidence. I need to be the one. We need to be the ones to say, I'm going to turn this game around. I know we're losing by 30 points, but I'm going to start putting some points on the board for self confidence. I'm going to start giving energy to the Best of who I am. I'm going to invest in the people in my life that I care about. I'm going to invest in my own growth. But it's hard to do that when the world that we live in is so rooted in comparison. There is always someone doing better than you. So you always feel like your win has an asterisk, and it is sort of like, okay, that was good, but they're doing so much better. So then we discount our wins. We discount the things that were supposed to make us feel confident in the first place. And it's hard for us to genuinely feel that sense of pride and accomplishment that comes with confidence because we're living in a time where it feels like it's never enough.
- [47:51]
Mike Carruthers
So one of the things that seems true is people don't put themselves in those situations or don't even act too confident for fear of what other people will think. And you've already talked about the spotlight effect. And we think people are thinking things that they're probably not thinking, but we're still thinking that we're still thinking. I don't want to be to worry about what Joe's going to think of me if I stand up in this meeting and say something that comes out wrong or whatever. So. So besides the spotlight effect example that you gave of that, you really don't have anything to worry about. What other fuel can people use to feel the fear and do it anyway because it's the fear that's holding them back?
- [48:43]
Juan Bendanya
I think acceptance of something that often we don't want to admit, which is there's going to be people in almost every room that don't like you, that think you sound strange, that think you're too much, that think you're not enough, that think you're too reserved, that you're too extroverted, you're too introverted. And here's a really good rule of thumb that is not rooted in specific research, but I've found it is very true. Most of the time in any given room that you walk into. And this is from a friend of mine, Josh, 10% of the room will like you no matter what. These are people that you know see the best in you. These are the people that are just happy to be there. They're in a great mood. They're that person you see, like checking into a hotel that's just smile on their face. They automatically will like you. And they're just like, going to be a fan. 10%. 10% of people will not like you no matter what They've had a bad day, they got cut off in traffic. They just don't like something about you. Something about you reminds them of their ex that broke their heart in high school for some reason. There's gonna be people that just don't like you no matter what, and then the other 80% is up to you. And what I find is that there's so many people that focus on the 10% that won't like them no matter what, as opposed to the 90% that could actually be on the positive side of things. So when we accept the fact that not everyone is going to like us, that not everyone is going to be a fan of us, it actually gives us a level of peace because we don't feel like we need to, you know, feel this imposter syndrome, because we feel like we don't need to please everyone. Like, accept the fact, acknowledge the fact that there is going to be people in almost every situation you get into that aren't a fan, and that is okay. That is a reflection of them and where they're at, not a reflection of you and where you are.
- [51:02]
Mike Carruthers
I wonder if anybody's done any research about where you take people who are not doing something out of fear. They don't have the confidence to do it, and, and then they do it. Like, what percentage of those people end up being glad they did it, not glad they did it, amazed that they did it? Have you know of any research like that?
- [51:25]
Juan Bendanya
I don't know any research studies that have done that sort of thing. But anecdotally, it's never regret. It's always like, wow, I'm happy I did that. Maybe it didn't even work out, but I'm happy I did. The regret is always a lack of action, not the action itself. Regret is always, I regret not doing it. It's never, I did the thing, I did the courageous thing. Wow, that was. I regret doing that. It rarely is. I almost exclusively hear stories of people saying, I was terrified of going for the thing and I went for it, and maybe it didn't work out, but I'm happy I did because of the person I became in the process.
- [52:09]
Mike Carruthers
Well, it's a topic I think people think about a lot and they question their own confidence. They admire confidence in others. And I appreciate you sharing your insight, Juan. Ben Danya has been my guest. The name of his book is Confident by the Three Small Decisions that Build Everyday Courage. And there's a link to his book in the show notes. Juan, thanks. I enjoyed talking about this awesome Mike.
- [52:33]
Juan Bendanya
Well, thanks so much for having me. It's been great chatting.
- [52:41]
Mike Carruthers
You know, powerful people have a tendency to incorporate a few important behaviors that make them appear more powerful, whether they do it knowingly or not. And you can do them too. Here are a couple Always say less than necessary. It gives people the impression that you don't need to gab about things because you know about them so well. Chatty people appear insecure. Act like a king to be treated like a king. If someone asks you how much you want to be paid, aim high. If you show that you think you're valuable, others will think so too. Don't argue. Powerful people know that you almost never change someone else's opinion with your words, so don't try. Just stay above it all and never outshine your master. Make your boss or the person above you think they are bright, witty and charming. If they feel threatened by you, they will work to sabotage your power. And that is something you should know. Would you do us a favor? Me personally? Leave a review of this podcast on whatever platform you're listening. On Apple Podcasts, Spotify, Castbox, they'll allow you to leave a rating and review. And we read them and we appreciate them and it helps. I'm Micah Ruthers. Thanks for listening today to something you should know.
- [54:05]
Advertiser/Host
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- [55:01]
Chris Hutchins
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