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The Long View
Daniel Crosby: Can Money Really Buy Happiness?
00:54:44
The author and financial psychologist discusses his new book on money and meaning, plus the challenges of spending in retirement.
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- [00:01]
Jackson Financial Representative
At Jackson, we've created a digital retirement planning experience with you in mind. Visit Jackson.com to explore our easy to understand resources and user friendly tools that are designed to enable financial professionals and clients to plan a path to financial freedom. Jackson is short for Jackson Financial, Inc. Jackson National Life Insurance Company, Lansing, Michigan and Jackson National Life Insurance Company of New York, Purchase, New York.
- [00:27]
Disclosure Voice
Please stay tuned for important disclosure information at the conclusion of this episode.
- [00:33]
Christine Benz
Hi and welcome to the Longview. I'm Christine Benz, Director of Personal Finance and Retirement Planning for Morningstar. Today on the podcast we welcome back Dr. Daniel Crosby. Daniel is the author of a new book called The Soul of 50 Reflections on Money and Meaning. Daniel is the Chief Behavioral Officer at Orion Advisor Solutions. In addition to the Soul of Money, Daniel has written several other books on behavioral finance including the Behavioral Investor, the Laws of Wealth Psychology, and the Secret to Investor Success and you'd're not that great. Daniel also hosts his own podcast called Standard Deviations. He received his Bachelor of science degree and PhD in psychology, both from Brigham Young University. Daniel, welcome back to the Longview.
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Dr. Daniel Crosby
Christine, Great to be with you.
- [01:21]
Christine Benz
Well, it's great to have you here. Congratulations on the book. I have to say I really enjoyed it. I want to get a little background on it. What was your thinking in writing 50 shortish chapters or lessons as opposed to like 10 longer essays on the same sorts of topics?
- [01:39]
Dr. Daniel Crosby
Well, it turns out that I tried to do 10 sort of more traditional chapters and they were very bad. So I knew I wanted to write a book about money and meaning and I started in the traditional format that my previous books had been, which is, you know, 10 chapters of 20 to 30 pages a piece. And I got about 80 pages in. And Christine, it just candidly was not very good. It was just sort of uninspired. I found myself sort of writing fluffy, trying to fill up space and I set the project aside and then I had the great fortune of reading Rick Rubin's book the Creative act, which is like 75ish chapters of three to four pages a piece. And I absolutely loved the format and I tried it for my own book and it worked so well and I thought it made it more readable for the end reader. But as a writer it also forced me to be concise, to be parsimonious with my words and really think about what I wanted to say.
- [02:39]
Christine Benz
Yeah, well you absolutely succeeded because it is so accessible, it's easy to pick up and put back down. And we all have kind of short attention spans these days. So for me it just worked really, really well for me to digest a lot of the lessons. Wanted to talk about the thesis behind the book, which really is a theme running through a lot of your work. But you said that you wanted to write this book because humankind has never been wealthier. But we're also quite unhappy overall. You've noted that rates of depression and loneliness are high. So what's going on there? Is it that money doesn't really matter to happiness, or is it that we're not good at using money to further our happiness? Or maybe it's both.
- [03:22]
Dr. Daniel Crosby
Well, I just think we've bought ourselves a more complicated set of problems in a lot of ways. I think if you, if you think back to your Psych 100 course about Maslow's hierarchy, for most of human existence, we have been scratching and clawing to knock out those bottom two rungs of Maslow's hierarchy. And you know, if you look back even to the founding of this great country 250 years ago, 85% of the world was living in what today would be on $2 or less a day. And today that number's 9%. So there is this burgeoning middle class in the world. Like we've never had more abundance. Most people are getting their 2,000 calories a day. Most people have a nice place to sleep and enough food to eat. And that is a brand new consideration for humankind. And yet, you know, as we've checked off those bottom two rungs of Maslow's hierarchy, especially in the west, we've bought ourselves new about, you know, belonging and relationships and meaning and purpose. And so I, I think we've solved some very big problems and in some ways we've just bought ourselves a new. A new set of problems. Yeah.
- [04:38]
Christine Benz
It seems like when I think about your whole body of work, a key theme for you is trying to address this disconnect between abundance and happiness and trying to help people get better at using their financial resources to improve their quality of life. Has that been sort of a overarching theme for a lot of the things that you've written, that is.
- [05:00]
Dr. Daniel Crosby
And I'm getting bolder and bolder about just making that sort of the central theme. I mean, I think that astute readers like yourself will have seen threads of that in my previous writing. And I think going forward, it's like all I'm going to talk about. So this is, I think, our biggest problem. You know, I. I really think we have a massive meaning crisis in the world today. And I think that we haven't always been very wise or very prudent about how we've spent money to try and overcome that.
- [05:35]
Christine Benz
Can you summarize what the research says about happiness? There had been that one study, you know, that showed that happiness maxes out at what, $70,000, which I think you mentioned in the book, is more like $100,000, inflation adjusted. The state of the state in terms of the connection between money and happiness.
- [05:53]
Dr. Daniel Crosby
Yeah, it's a little complicated and it's a little nuanced, which is probably just how it should be. Because I think that when that $75,000 study came out, which is, you're right, 100 in today's dollars. When that study came out, people everywhere, including me, for sure, were so excited about this study because it sort of affirmed our priors, it affirmed this thing that we wanted to believe that money can't buy. And that money was precipitously up and to the right up to that hundred thousand dollars a year mark. But then it flatlined pretty hard. But when you dig into the research a little more closely, you find that what they were measuring there was really maybe not happiness, which there's clearly no blood test for. Right. And what they were measuring, the way that they had operationalized it, was really more about an absence of pain. And it turns out that money does a very good job of helping us avoid pain because, you know, with $100,000 a year, you can live in a comfortable place, you're not hearing gunshots at night, you have enough money to go to the doctor, you're eating healthy food, and all of that stuff has a material impact on our well being and it buys us the absence of misery. But I don't know that we're willing to call the absence of misery the same thing as happ. Because when other studies have looked at this and they've tried to operationalize happiness in more qualitative or more subjective terms, we find that money does buy qualitative happiness up to about half a million dollars per year, which is where the study cut off. They found that when people say, write a one page essay about, you know, Christine, how are you doing? How is your life right now? They found that the more money people made, the better their self destruct descriptions of their life got all the way up and to the right to half a million dollars per year. Another fascinating thing that I found when I was putting the book together was that for about 15% of people, money just didn't move the needle one way or another. They just have a different Set of problems. It could be, you know, organic mental illness, it could be situational variables. It could be something. But money's not going to be the thing that scratches that itch. And then finally, this is maybe a different question or a different conversation, but it matters a great deal how we spend that money as well. The same dollars deployed differently result in a very different outcome. So money buys us an absence of misery. For sure. Money can buy some qualitative happiness as well. It matters how you spend it. And then for some people, if a lack of happiness, if depression is long standing or organic, you've got a different problem and you need to seek out a different solution.
- [09:03]
Christine Benz
So you just hit on some of the ways that money can be used to address happiness or alleviate unhappiness. Can you home in on the qualitative piece? How can people use money to address happiness qualitatively? And I guess happiness is inherently qualitative, right?
- [09:24]
Dr. Daniel Crosby
Yeah, yeah, I think it is. So when it comes to how we spend the money, I think the best publicized of the findings is that we should buy experiences over things. And there's a very particular reason why that's the case. And it has to do with this human tendency to habituate to things. So a lot of what we call, you know, behavioral biases is really just human tendencies that are neither good nor bad. And habituation is one of those things. People can get used to whatever they're going through, for better and for worse. You hear people say all the time, you know, if. If XYZ thing happened, if I lost my spouse, if I lost my child, I just couldn't go on. And then that, that feared thing happens. The spouse dies and, you know, they do go on. It's hard. It. It hurts. But, you know, life finds a way. They adjust and they make it through. So that's an example of positive habituation. But we also get habituated to really nice things. And you think, you know, if I just had this car or this house or this, you know, number in the bank account, then I would be. I would be set. But just as surely as you can get habituated to tough stuff, you can get habituated to good stuff as well. And so that is the reason why things don't tend to buy us much happiness. Because that thing that we buy, that new car or that new house quickly just becomes the, you know, your grocery getter or the place where you sleep at night. It's not this magical thing anymore. It's just sort of the backdrop of your life. Whereas experiences tend to Better with time because we engage in something called rosy retrospection. And you know, my favorite example of this is every summer my family and I go to California for a month because Georgia is unlivable in July. So we go, we go to Southern California for a month and we always go to Disneyland for one day. Like one full day, we go to Disneyland. And it's one of the most miserable days of my year. And if you, if you, if you texted me at any moment during that day and said, hey, how are you doing? I would be absolutely miserable. I would, I would have just paid $10 for water, I would be sunburned. You know, I'd be standing in some long line to ride a 30 second ride. And yet we buy the ornaments, we put them on the tree at Christmas and we go, what, you know, wasn't Disney great? Because when we, when we retrospect on an event, especially a trip or something with a loved one, all the bad stuff tends to fall away. And we tend to hang on to the bright parts of that memory. So we don't habituate to experiences the same way we do to things. So experiences over things is one way. Another way is getting out of things that we hate doing. This is one of the ones that I think people fail to do. And I talk about in the book buying back our time. Getting out of cutting the lawn, cleaning the house, you know, doing the laundry, whatever the hated task is. Buying back your time if you can afford to, makes a great deal of sense. Also find that things that foster relationships, relationships tend to be the number one driver of how good life is. You know, good relationships, by and large lead to a good life. And so there's, there's research that I talk about in the book by Dr. Michael Finka who talks about, you know, people who buy a car don't tend to have a great deal of excess happiness, but people who buy a car to join a car club do because they've bought themselves something to do on Saturday and so they bought themselves some buddies to talk to about their engines and they've bought themselves a road trip. And so it tends to be a different thing if the thing that we're buying tends to deepen or foster a relationship.
- [13:38]
Christine Benz
Yeah, there's a lot there. Daniel, I want to follow up on the buying back time idea. And so it's fairly clear, like if you're, you know, hate cleaning your house or whatever, to hire a house cleaner if you can afford to do so. But how about in the realm of our jobs, like if we have aspects of our job that we don't love? I mean, is there anything that can be done there with money to address parts of our jobs that we don't love?
- [14:03]
Dr. Daniel Crosby
Well, I think so. I think a lot of times this comes down to promotions. And if, you know, you think about a lot of times when people are faced with a promotion, oftentimes that promotion, it might come with more travel, it might come with a longer commute, it may come with longer hours. And I think that that's something that people need to be very, very thoughtful about. Because even something as simple as an extra 20 minutes a day in commuting has a massive negative impact on happiness. And so I think a lot of times we just compare dollars for dollars and not value for value. So if we're thinking about that potential uptick in income, what are the trade offs and are they worth it? Are we, you know, an extra 10, 15, $20,000? How much life are you giving up for that thing? Because it's usually not quite that simple.
- [15:05]
Christine Benz
So you have a section in the book about what you call the I'll be happy when phenomenon that people think if I hit X number of dollars in my net worth or my income or whatever, that okay, then I can calm down and not be so focused on making more money. But you note that we keep moving the goalposts on ourselves. Why does that happen? And how can we get away from that tendency?
- [15:31]
Dr. Daniel Crosby
This really goes back. So many of these things go back to the evolutionary roots of humanity. And from an evolutionary psychology perspective, the ability to amass enough abundance to retire, say, to live for 20, 30, 40 years without more effort and more exertion on your part. That is a brand new phenomenon. From an evolutionary perspective, right when you think that our brains are, you know, 150, 200,000 years old, the ability to set aside enough wealth and enough abundance for you to go decades without working is a brand new, a brand new conceit. So we are not wired for that. In a very real respect, we are wired to wake up every morning with our hair on fire trying to get more. Because for 99.9% of human history, you were living hand to mouth and you were doing everything you could to try and survive. So this idea of abundance or this idea of enough is one that we're not really wired to accept. And so I think the best we can do is to first not delude ourselves. I think, you know, I, I feel very silly. Maybe you're like me, but I feel very silly. As someone who writes about and thinks about and talks about these things for a living, how often I fall prey to them. And I tell you, I have moved my capital T capital in the number more times than I can care to admit. And I have thought when I get to this number, that's going to be the promised land. And that's when I'm going to settle down and that's when I'm going be happy. And I have moved it. And I have moved it. And I have moved it. So I think the first thing we have to do is to be honest with ourselves, to say there is no number. There is no magic number. Whatever the commercials say, whatever you've been marketed to, there is no day when you're going to hit a number and not want more and never think about this again. It's just not how you were made. And so I think the first thing to do is self honesty because I think we can believe our own nonsense. And then, then comes the accompanying disappointment when we hit that number and it doesn't have the psychological payoff that we thought it might. And then I think the second thing that we can do in understanding our wiring is to begin to try and live every day with a great deal of gratitude and a great deal of presence in the moment. You know, I talk in the book about gratitude and the act of journaling. You know, one to three things you're thankful for every day, which would take, you know, less than five minutes a day, has an equivalent impact on happiness to taking ssri. So, like Prozac. And it's an incredible thing to consider when you realize that you are not wired for enough in any meaningful way. You're not wired for a finish line. I think the next logical conclusion then is to enjoy the journey and to relish the journey in a way that you may not have before, to recognize that these are the good old days, these are the moments I've been waiting for and to just try and make the most of that moment.
- [19:12]
Christine Benz
I'm curious, Daniel, do you do the gratitude journaling?
- [19:16]
Dr. Daniel Crosby
Very, very irregularly. So My wife does it with an incredible degree of consistency. She has encouraged me to. She has bought me the journals. I am not nearly as consistent as she is, but it's one of my goals for the new year.
- [19:32]
Christine Benz
Yeah, I've been off and on, too, but I do find it helpful. So I want to follow up on retirement and this idea of amassing enough funds for retirement. A related problem is people hit retirement and many seem to have difficulty giving themselves permission to actually spend appropriately from their portfolios. And you know, there might be some valid reasons that they're concerned about overspending, like they're worried about long term care. But it seems like this is a problem. I hear about a lot from financial advisors that their clients are anxious about turning on the spending, you know, after a lifetime of saving. Can you talk about that dimension and maybe whether you've thought about any kind of techniques that people can use to get over that hump where maybe they are spending appropriately given their savings?
- [20:26]
Dr. Daniel Crosby
Yeah. So I did a research a couple years ago that was some of the most interesting research I've ever done. And I talked to 425 married couples and I basically asked them what did they fight about when they fought about money. And the number one thing that they fought about was whether the best use of money was to enjoy today or to secure tomorrow. And it was a pretty even split between those two. And what's fascinating to me that if you think about that sort of false dichotomy there, they're both important. Both of those are fruitful uses of money. Both of them are important. But we've got to achieve balance. And what we found is that people were thoroughly decamped into one side or another and that they tended to be very judgmental of people in the other camp. Right. So people who were of the Enjoy Today camp would look at the people on the Save Tomorrow camp and think that they were lame or they were stuffy or they were no fun. And then people in the Save for Tomorrow camp would look at the spend for Today camp and they would think that they were serious or they were frivolous or they were unprepared. And so I think the first thing we have to do, Carl Jung has this paraphrasing, you know, until you make the unconscious conscious, it will direct your life and you will call it fate. So I think that we have to understand that this dimension, that this continuum exists and plot ourselves along this continuum. Where are we and what are the trade offs we're making given where we are on that continuum and what could we do to sort of move towards the middle. The second thing that I see a lot, because this is the number one thing I get asked about by advisors these days. This is absolutely the number one thing I get asked about by advisors. It's not, you know, probably speaks to how good the market has been, but, you know, it's not how do I keep my clients from panicking. It's like, how do I get them to spend all this money? You Know that I've, that I've helped them make. And I think what happens is people conflate their net worth too closely with their self worth. And I think that the number in your bank account becomes a stand in for bigger things that it doesn't truly represent. It becomes a stand in for your work ethic or it becomes a stand in for your success as a person, or your brilliance or your effort. And I think that when we ascribe qualities to money that it doesn't truly have, it gets a power over us that it shouldn't have. And so I think we have to ask ourselves, we have to be very honest with ourselves and say, what does this number mean to me, this number that I've put up in, in, you know, for retirement? Does this mean that I'm a good person, that I worked hard, that I lived a good life, that I was a good provider? And is that what it should mean? And so I think we have to divorce, you know, divorce those meanings from the tool of money itself. And then I think the final step is we need a yes that's bigger than the no of our fear. You know, we need, we need something to spend that money on that matters more to us than the fear. We gotta find the yes that's bigger than the no. That could be philanthropy, that could be seeing the world. It could be time with family, it could be college for grandkids, could be a million things. But what is the yes? What are we gonna say yes to that's bigger than that? No. So understand that the continuum exists, it's not a right or wrong thing. And understand where you sit along that continuum. You know, look at yourself and understand the meaning of that nest egg to you beyond just the utility that it serves and then find the meaning that's going to mean more to you than that. Security.
- [24:57]
Christine Benz
Yeah, that's helpful. Do you think that the term spending itself is, you know, people just naturally equate it with profligacy or something that they don't necessarily think of it potentially encompassing lifetime giving, whether to charity or to help help, you know, younger family members get launched, whatever. Is that sort of an unfortunate effect of the term that some people have this negative association with it?
- [25:23]
Dr. Daniel Crosby
I think that's an, I think that's an excellent insight. And I think there's a lot of people who would feel profligate if they were asked to just, you know, hey, go, go treat yourself. And so for them that's not going to be the answer. Right? If you've, if you've amassed this wealth over a lifetime of denial and sacrifice and effort. You're probably not going to now flip a switch and, you know, go be some big spender. But if you think about it not as, you know, treat yourself or not as spending and you think about what's the good it can do in the world, I think that's a much, you know, a much more impactful way to think about it. What's the good I could do in the time I have left with this money versus letting that good kind of, you know, kind of expire with me? So I think there's lots of ways that we could reframe that away from just like, hey, you gotta spin this down right? And you know, what's, what's the good I can do in the time I have left? Is maybe a better way to think of it.
- [26:26]
Jackson Financial Representative
At Jackson, we've created a digital retirement planning experience with you in mind. Visit Jackson.com to explore our easy to understand resources and user friendly tools. Tools that are designed to enable financial professionals and clients to plan a path to financial freedom. Jackson is short for Jackson Financial Incorporated, Jackson National Life Insurance Company, Lansing, Michigan and Jackson National Life Insurance Company of New York, Purchase, New York.
- [26:52]
Christine Benz
Right. I wanted to follow up on the couples. So if couples land on different ends of the spectrum or, you know, they're far apart, one is more a live it up today kind of person and the other is more in the mindset of wanting to think about the future, how can they, you know, get a little closer together? Because I understand this to be a really common problem in a lot of households.
- [27:17]
Dr. Daniel Crosby
It's a great question. So if you think about this continuum or, or any of the other ones, we looked at, we looked at things like communication and worry and importance and, and all of these things were continua where you would, would you would often have one spouse on one side and one on the other. The first thing to understand about that situation is that it's not bad. I think a lot of people think, oh well, it would be preferable to be on the same page. If you're on the same page, you're also blinded in some respects because there will be no conflict. But in a real sense, there will be no growth or no checks and balances either because you're in total agreement about being on the same page. You know, my wife and I are very much both in the save for tomorrow camp. And while that affords us, you know, some ease of conversation, it also leads us to run the risk that we're Gonna, you know, sort of hoard money and not die with zero, as the saying goes, right?
- [28:21]
Christine Benz
The opposite, yeah.
- [28:22]
Dr. Daniel Crosby
Yeah. And so I think the first thing is to understand that it's not necessarily a bad thing. And if you even look at the psychological diversity research, it's kind of fascinating. Teams who are psychologically diverse, they fight more, they take longer to make a decision, but they also make better decisions. And so that's what's represented in a couple. There's a potential for conflict, but there's also a potential for growth and synthesis. So the first thing to do is to recognize that. The second thing to do, I think, is to understand that you are going to have to be the one to make a change. I was a couples therapist for a time, Christine, and it must be said that I may have been the world's worst couples therapist ever. My batting average is effectively zero in saving couples. But I learned some things in the process. And one of the things that I saw time and again when couples would have a disagreement is that they would dig in and they would wait for their partner to change. And that is a recipe for disaster. So I think the most practical thing you can do is to understand where your partner sits with respect to their attitude being different. And you take one step in their direction. You hang the sign over your door that says, hey, I'm coming your way. I understand that you see the world this way. I'm going to extend an olive branch. I'm going to take a step in your direction, and I want to flex to make your life better. I find very often that couples wait for the other partner to be the one. It's like, I'll change when he changes, I'll change when she changes. And that is a recipe for brokenness.
- [30:14]
Christine Benz
Before we leave retirement, I just wanted to ask about the concept of retirement itself. You've got a lot in the book about how work. Work can confer a sense of purpose. So I'd be curious to get your take on whether the way a lot of people envision retirement is kind of a hard stop. Is that fundamentally flawed, do you think? Should most of us be thinking about a way to maybe phase into it gradually and hang on to work a little bit longer.
- [30:43]
Dr. Daniel Crosby
Well, I think podcasts like yours and books like yours are doing a great service to help us sort of rethink retirement and think about it in new and better ways. But in. In the very first chapter of the book, I share the work of Martin Seligman, who's this pioneering positive psychologist, and he has this five part framework for what it means to live a good life, basically to live a rich life. And it's called the perma model. And when I think about how the perma model gets applied to retirement, it becomes evident how wrong headed the traditional concept of retirement is. So very briefly, the PN perma is for positive experiences. This is fun stuff, golfing, going to the beach, riding a roller coaster, eating an ice cream cone, whatever, right? That's positive experiences. The E is for engagement, which is deep, meaningful work. The R is the one that is most powerfully predictive of wellness. This is relationships. The M is for meaning working for something bigger than yourself. And the A is for advancement. If you think about work, if you think about the work that at least in the sort of stereotypical conception of retirement we're working so hard to get away from traditional work, hits four of the five boxes of perma, right? It provides us with engagement, provides us with relationships, meaning and advancement in a very concrete way. You know, you're working shoulder to shoulder with people, you're growing, you're learning, you're getting better, you're part of a team, you're working. All of these things bias a great deal of psychological well being. The only thing work is not very good for is fun, you know, positive experiences. And you know, even we could have a little bit of that at work. But you know, it's not as fun as going to a movie perhaps or eating an ice cream cone. And so I think a lot of times we really over index on those positive experiences and we think, we think that retirement is going to be, you know, golf and beach houses and trips with the kids and all this stuff. And there is a place for that. But that is one leg of a five legged stool. And if we don't have a plan for the other four legs of the stool, it's a very wobbly retirement. And we set ourselves up for a great deal of disappointment and psychological impoverishment. And I talk about in the book things, this is heavy. But you know, death rates tick up right in the, in the wake of retirement. Suicide rates tick up in the wake of retirement. And for many people it's just not what they thought it was because they only prepared for one of the five dimensions.
- [33:42]
Christine Benz
I wanted to ask about social comparisons because you've got a lot in the book on this topic. You obviously think it's hugely important to be thinking of. In fact, you call social comparisons the thief of joy. So maybe you can talk about why you think comparing ourselves to others, comparing what we have to what other people have. Why is that such a bad thing?
- [34:05]
Dr. Daniel Crosby
Well, one of the things that I found when doing the research for the book that I thought was just staggering to me was that when you're looking at financial contentment, basically how well off do people think that they are? There are two variables that are equally predictive and the first one is exactly what you think it would be and it's how much money do you have? Right. It makes complete sense that yes, how financially content I am would have something to do with how much money I have. But the second variable, which is at least as predictive and at least as powerful is who are you comparing yourself to? Who are you benchmarking to? Is as material as the number of dollars you have in your bank. And I don't think most people would, would assume that or understand that that's the case or are even cognizant that they are making a choice. Because, Christine, we've, we find ourselves in this weird moment again. We are living in a day and age that we're just not built for. When you look at how many people humans can really know, associate with and know well, it's about 150. It's about 150 people that we kind of can fit in our Rolodex to know and vet and be friends with and know well. And yet we all have access to just about every at least high profile human on the planet through things like social media. So whereas a couple of hundred years ago and for all of human history before that, humankind would have been benchmarking their professional success to the hundred people that they knew who lived in their little village and probably did jobs kind of like theirs. But now I can wake up in the morning, bleary eyed, click, open Instagram and see that I have a lot less money and a lot less fun, you know, than everybody. Yeah, then certainly superstars, right? Certainly the Taylor Swifts and the, the, the messies of the world. But even, you know, even friends, you know, even friends who are of course doing what we all do and curating a highlight reel of their most notable moments, by comparison, we are found lacking. And so both in terms of reach and in terms of, you know, just the way that, that social media works, we're presented with this weird catch 22 about wanting to be connected to people, but finding ourselves comparing every sort of bump and every pimple of our own lives to this highly edited version of everyone else's life. And it makes us sad. You know, I found One of the studies that I quoted in the book found that if people just limited their screen time on social media to 10 minutes in the morning and 10 minutes at night, it was good for a 13% increase in happiness. That is bigger. That is bigger than medication. I mean, it is a. It is a wild finding to know that just by not doom scrolling and looking at your friend's, you know, fun weekend, as much you can get more happiness than by, you know, getting psychiatric medication.
- [37:42]
Christine Benz
So you make the point to be very careful about social media. And I would think this goes doubly true for young people. I'm curious if you can talk about that, how we should coach young people on using or not using social media, because it does seem like the data are pretty dark about the implications, especially for young girls or, you know, sort of adolescent girls.
- [38:07]
Dr. Daniel Crosby
Yeah, so this is where I'm going to get the most hate mail. But I will tell you what I do as a parent, because this is me imperfectly wandering through the wilderness of trying to be a parent of a teen and a teen girl in particular. But we have made the rule for our kids that they won't have a phone until they can drive. And so my kids use. And I know that that feels draconian and like, very lame by. By the standards of most parents. But when you look at the data and you look at how dangerous these things are, and you look at how dangerous they are for girls in particular, you know, the thing that got me into psychology was actually an interest in eating disorders. And my first ever rotation was at an inpatient eating disorder treatment center in Utah where I was going to school. And. And I'll never forget that when I got there, the first thing we did with the women there, who were mostly young women, was media training, media literacy training, basically how to become an informed consumer of the messages that they were receiving about their bodies and their worth. And I thought that was so powerful that before. Before we talked about nutrition or therapy or a hundred other directions you could take sort of a multimodal treatment approach. We talked about, here's how you are being marketed to, here's how these images are created, here's how the marketing industrial complex makes you want to feel bad about yourself, so you'll go out and buy things. And I think that that is an important message, but it's a hard one for someone whose prefrontal cortex isn't form, to sort of. To sort of understand in a. In a meaningful way. So, you know, Nassim Taleb says, never ask someone their opinion, just ask them to see their portfolio. So this is me showing you my portfolio. I don't let my kids have a phone until they're 16. After that, it will be put up at night, locked in a box at night, and screen time limited. Because I think that, you know, phones and social media are the. The smoking of the new generation. And I think we're going to look back many years from now and we're going to wonder that we ever gave people such free rein on these devices that have really staggeringly bad psychological impact on young people.
- [40:43]
Christine Benz
Well, a related question, though, that I sometimes hear is, or sort of a counterpoint, is that are you kind of isolating your kids by having such a draconian approach to this? Like, I think a lot of parents do agree with you, but they are scared that their kids will feel really left out of the conversation if they're the only ones without a phone. They're the only ones who aren't on Instagram. What do you say to that?
- [41:10]
Dr. Daniel Crosby
Yeah, so my kids have access to phones. I mean, my kids can use my phone, my wife's phone, or a shared family iPad to text their friends. And so there is an element of sort of training wheels, right? There is an element of training wheels and not wanting them to be left out. I will also say I fault no parent for doing it however they do it, because I am deeply conflicted about my own approach. I have misgivings about all of it, and I don't profess to be doing it right. So I respect every parent's approach, but I think that's a real concern. But I will also say that that in person communication has a payoff that is dramatically better than text communication and other forms of digital communication. And so what we emphasize in our house is facilitating in person get togethers with my kids and their friends, which I want them to have. I think a lot of times one of the hallmarks of sort of our misunderstandings about money and going back to sort of our initial conversations about the disconnected, lonely place we find ourselves in, is that, you know, all these kids have 2,000 followers, you know, 2,000 friends on Instagram, but no one to spend time with in real life. And so there's a degree to which texting all day or, you know, sending little messages and sending little tweets or snaps or whatever it may be is sort of junk food communication. It's sort of the cotton candy of connection. And I think we do need to be encouraging connectivity between our kids and their peers. But I think it needs to happen to the degree possible in the most meaningful and the most direct way possible.
- [43:07]
Christine Benz
In terms of kind of traditional social comparisons with neighbors and so forth. You make the point in the book to be careful about what you call reference classes in order to. To limit unhealthy social comparisons. So what are reference classes? It seems like the neighborhood that I choose to live in would be one. What are some other examples of those reference classes and how can we be thoughtful about them?
- [43:31]
Dr. Daniel Crosby
Oh, it's sort of endless. I think different cultures emphasize different things. I think for some cultures, this idea of portable wealth is very big. So having the right purse or the right car. I think for some cultures, cultures, a wedding, you know, something like a wedding, a kid's wedding is a status symbol, and they'll. They'll go deeply into debt or spend big money to have the wedding be a big deal. You know, for some folks, it's a house. And so I think, you know, it's on each of us to understand what that looks like for us in our own context. But so much of the book, I think, can be around just raising awareness that we're doing this in the first place. You know, in the same way that a fish doesn't know that it's wet. We are always benchmarking our lives to other people, and I just want to make sure that we are making these reference class judgments thoughtfully and intentionally. We're always going to do it because past, like a very basic level, once we get past, you know, taking care of things like hunger and warmth and safety, wealth becomes a relative subject. You know, whether or not someone is wealthy sort of becomes a matter of degree and a matter of perspective and a matter of comparison. So, you know, someone who is very, extremely wealthy, you know, someone who is living in the US Is likely to be extremely wealthy by world standards, but that's not likely their reference class. Their reference class is likely the people in their neighborhood, the people at their school. And I just want people to be intentional and thoughtful about who they're benchmarking to, how they're making those judgments and making sure they have the proper perspective.
- [45:26]
Christine Benz
How about people in our social circles who kind of like to engage in one upmanship or like to boast about, you know, whatever they're doing, the car they bought or whatever. How, if you want to try to remove yourself from these social comparisons, how do you deal with that stuff? Because I find it kind of difficult sometimes times.
- [45:47]
Dr. Daniel Crosby
Yeah. What do you. So not to be a shrink here, Christine, on your own show, what do you find difficult about it?
- [45:54]
Christine Benz
Not, not engaging, you know, where I'm like, I don't want to be doing this what you know. And so how do you step away from it, I guess is the question.
- [46:04]
Dr. Daniel Crosby
Yeah, I think, I think the example that you gave is a good one. And I think you don't want to take the bait. I think you want to treat that kind of engagement with a lot of grace and like pity is too strong. But I think that's directionally the right attitude to have when someone's purchases become the most interesting or the most important thing that they are talking about. Because I think that is symptomatic of a hollowed out life. I think that is symptomatic of a one dimensional worldview and a belief that they're as good as the purse they bought or the car they bought or the new phone they have, or what do you know, whatever the case may be. So I think that people who lead with that are deserving of grace and love and empathy and even pity because it's kind of a sad way to live. And I think the worst thing that we can do is to take that date and to try and one up them because that's not what they need. They need our friendship and our compassion and not our one upsmanship because they're having a hard time.
- [47:18]
Christine Benz
I want to ask in our remaining time, you have a lot in the book about financial habits and you talk in the book quite a bit about how implementing healthy financial habits is the key to financial well being. Can you discuss how and why that works? Why those healthy financial habits work and which ones one's work?
- [47:38]
Dr. Daniel Crosby
Yeah, so I'll kind of give two frameworks. I'm a person who tends to think in frameworks. There's a, there's a chapter in there on willpower that has really stuck with me and it's been incredibly salient for me this year because on April 1st I started a program to try and lose some weight. I've been overweight for most of my life, most of my adult life. I've just got kind of tired of, of it. And I, I set out to try and lose some weight and I've been successful in that. And the thing that I did was like shockingly easy and, and I mean simple but not easy. Right. And the thing that I did was I monitored everything I ate. I stayed under a calorie goal and I stayed over a protein goal and that is it. And when people see that I've lost a bunch of weight, they always Assume that it's something grander than that. And they think, you know, they think it's drugs or like crazy working out or, you know, something like they think it's anything but. The very simple, basic thing that it is, and the way that I relate this to habits, is in the chapter on willpower. I go into the research and I find that there's basically two things that people who accomplish their goals. It's not that they, they white knuckle it better than you or I. It's not that they, you know, have more internal strength or grit than you or I. They do two things well, they make the good behaviors habitual and they make the bad behaviors hard. So for me, I'm married to a Norwegian American woman who can eat anything she wants and never gain weight. She has these incredible Scandinavian genes and they're wonderful, but living with her made me fat. And so I had, I had, you know, I had to say, look, you can't buy Oreos because if I see them, a sleeve is gone, right? And so you have to make the good behaviors habitual and the bad behaviors hard. How do we make the good behaviors habitual, though? There's a framework out of the British nudge unit that I always think about and, and it's east, and it's easy, attractive, social and timely. So one of the things that I've done on this weight loss journey is I take my daughter to an early school class. It's an early, like an early Bible study class every morning. And so I signed up to be the one that takes her because that gets me out of the house. And when I'm out of the house at 6:30 in the morning, it's like, well, well, I might as well go work out now. Like, I'm, like I'm, I'm already dressed and I'm already out. So I made working out easy and I made it timely. It happens at the same time every day. I'm not asking myself, hey, should I work out today or should I not work out today? It's like, no, 6:30 is workout time, you know, So I made it easy and timely. How do you make it attractive? Right? Well, if you like playing tennis, play tennis. If you like lifting weights, lift weight. Weights. Take the meta goal you want to achieve, which is move your body more. And don't find the most punitive version of that. Find the most attractive version of that. Find the version of that that you like. You also make it social. Right? One of the things that has helped me through this whole journey is working out with two of my good friends. I work out with two of my friends, and if I don't show up one morning, they will text me and roast me. And so that's a powerful motivator as well. Well, so get the bad stuff out of the way. Right. Make the bad decisions hard to do. And for the good decisions, make them easy, make them attractive, make them social, and make them timely.
- [51:30]
Christine Benz
I wanted to ask about. You're talking about dieting and stuff. One of your most famous tweets. Maybe it's your most viral tweet ever had to do with Diet Coke. Can you talk about that really quickly? I think it's funny because you have so many, many valuable thoughts on so many other things, but that one went crazy.
- [51:47]
Dr. Daniel Crosby
Yeah, that's. That's life, isn't it, Christine? You. You. You get a p. You get a PhD and you tweet about behavioral finance all day, and then your dumb Diet Coke tweet gets 35 million views. Yeah, so I tweeted a snarky tweet about trying to give up Diet Coke and the futility and having done so, I gave up Diet Coke for, like three months. I lost no weight, and I basically said, look, my. My reason for living is gone and nothing is better.
- [52:14]
Christine Benz
So.
- [52:14]
Dr. Daniel Crosby
So Elon Musk retweeted it. Elon Musk's mom retweeted it. It got viewed 35 million times that day. It was the number one trending topic in America. And it was. My mentions were a cesspool for weeks after that. And I will say the fun part of that, still a big Diet Coke enthusiast. And the fun part of that is afterwards, people have started coming up to me at conferences and jokingly ask me to sign their Diet Coke. So I have signed. I have signed more Diet Cokes than I would care to mention. And it's good fun.
- [52:52]
Christine Benz
Oh, that's awesome. Well, Daniel, I've really enjoyed talking to you today. Congratulations on the Soul of Wealth. It's a wonderful book. Thank you so much for taking time out of your schedule to be with us.
- [53:02]
Dr. Daniel Crosby
It was my pleasure, Christine. Thanks for having me.
- [53:11]
Christine Benz
Thank you for joining us on the Longview. If you could please take a moment to subscribe to and rate the podcast on Apple, Spotify or wherever you get your podcasts. You can follow me on social media, hristinebenz on X or ristinebenz on LinkedIn. George Cassidy is our NG for the podcast and Carrie Gretchik produces the show Notes each week. Finally, we'd Love to get your feedback. If you have a comment or a guest idea, please email us@thelongvieworningstar.com until next time. Thanks for joining us.
- [53:49]
Disclosure Voice
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