November 19, 2024 • 22 mins
Are there simple measures we could be taking every day to improve our money habits and our overall financial health?
This week on the Friends With Money podcast, Money’s Tom Watson is joined by Simi Rayat, psychologist and author of Productivity Joy, to chat about the relationship between psychology and money.
They discuss:
- When and how are people’s attitudes towards money formed?
- Why does money spark emotion that doesn’t appear with other issues?
- How can confirmation bias and sunk-cost fallacy affect our financial life?
- How can the 5Qs Formula improve our financial decision-making?
#friendswithmoney #tomwatson #simirayat #finance #psychology
Email Us: podcast@moneymag.com.au
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to the Friends with Money podcast, brought to you
by Money Magazine, creating financial freedom for Australians since nineteen
ninety nine.
Speaker 2 (00:13):
Hello and thanks for joining us for another episode of
Friends with Money, money Magazine's podcast to help you earn, save,
and achieve your financial goals. My name is Tom Watson,
a senior journalist here at Money Magazine, and as always
it is a pleasure to.
Speaker 3 (00:28):
Be with you.
Speaker 2 (00:29):
I've want to say that I am always fascinated by
the intersection between money and psychology, but it's one of
those topics that you know, we probably don't talk enough
about on Friends with Money, and more generally. Having said that,
Dedicade listeners may remember episode sixty eight when we had
to chat about the dangers of retail therapy, and maybe
our more recent episode as well on financial goal setting,
(00:53):
which was our episode one four seven. Off top of
my head, of course, Zarah, I'm both excellent episodes and
well worth checking out if you haven't listened to them already.
Today we are going to continue on this theme with
a discussion touching on everything from analysis paralysis to over
confidence and sunk cost fallacy and the relationship between those
(01:14):
and how we approach our dealings with money. Plus we'll
get into a technique design to help us be more
effective with decision making more broadly, but also when we're
dealing with our finances, so to help us dive into
all of that and more. I am very pleased to
say that joining us today is a scientologist, executive leadership
(01:35):
coach and author of the newly published book Productivity Joy.
Sidme rayet Seem Welcome to friends of Money. It is
a pleasure to have you on.
Speaker 4 (01:44):
Hi, Tom, pleasure to be here, Simmy.
Speaker 2 (01:47):
To start us off, would you like to perhaps give
us an elevator pitch about your book, Productivity Joy. You
know what's it all about, and perhaps just as important,
what inspired you to write it in the first place.
Speaker 4 (02:00):
Yeah, Productivity Joy is about a system, a reliable system
that's backed by psychological science, that it takes five minutes
a day to help you feel energized and be effective
for your day. It's something that I found myself at
a time of my life four and a half years
ago where I was stressed, overwhelmed, at the brink of burnout,
(02:24):
and I remember very specifically this precise moment living in
the UK in a two bed flat with my little
family in the West End of London. Arriving home a
Friday evening, opening the door, and I could see socks
and shoes and bags and toys all the way down
(02:44):
the hallway, and I could hear all this joy and
laughter coming from the TV room. And I was furious.
I was exhausted. I slammed my bags down and I'm
walking down the hallway and I opened the door to
the TV room and my kids and my hubby stop
what they're doing, and they looked up at me and
(03:04):
they said, oh, here comes the bull.
Speaker 2 (03:09):
Now.
Speaker 4 (03:10):
That was a real wake up call for me because
although yes, they still love me, and they loved me
dearly then and they loved me dearly now, the reality was,
because I was so stressed and overwhelmed, I had become
not a joy to be around, and those closest to
me were taking a step back, and I knew something
(03:31):
really needed to change, and that change needed to start
with me. So that's when I realized that although I'm,
you know, working as a psychologist helping so many of
my clients who were also feeling this struggle, and in
this consistent juggle, I wasn't applying the tools and techniques
(03:52):
to myself. And that's when I started to doing quite
a lot of research to see what was out there
that could potentially help people busy people set their day
up for success in terms of their mindset, their emotions,
and attention and behaviors. And this is where I started
to really play around with key questions that we can
(04:13):
ask ourselves and the impact and the influence that they
have on hour brain chemistry, how we feel, and how
we show up. And this is where the five quice
formula was born.
Speaker 2 (04:26):
Well, I think we're going to get into the five
ques formula in a little bit, and you know, just anecdotally,
I think that story that you just told us about
your own experience is probably going to be so relatable
to a.
Speaker 3 (04:37):
Lot of people listening.
Speaker 2 (04:39):
Obviously, we're going to focus on the money side of
things today, so SIMI, you know, how are people's attitudes
towards money formed? You know, do they tend to happen
early on in someone's life or do they gradually develop
over time? Is there any kind of set formula or
(05:00):
is it different for everyone?
Speaker 4 (05:03):
It is different for everyone, but you know, the common
thing here is is that money our attitude towards money
can be shaped by a combination of early experiences, so
childhood experiences, our social influences, personal beliefs, and also psychological factors,
and often these are happening. These attitudes are formed subconsciously
(05:26):
over those years, and they can significantly impact our financial decisions,
our habits, and our overall wellbeing. You know, for example,
you know, if you're observing your parents or your caregivers
behavior around handling money, whether they were savers or they
(05:47):
would spend impulsively or even discuss financial stress, this you
know deeply influences children's views on money. You know, for example,
if your parents you know, a frugal children may grow
up valuing saving money, whilst you know, there could be
a household that's more focused on material purchases and they
(06:10):
could have a belief that money is more for spending.
So those parental behaviors are really play a part in
terms of our decision making and how we think and
feel and our relationship with money. And then there's also
emotional associations, so you know, if we've had financial hardships,
(06:31):
we've lost money, we've had conflict over money, or even
receiving money as a reward all of those things can
attach an emotional weight to money, And when we attach
an emotional weight to money, it's really linking money to
a sense of security, love, freedom, and stress.
Speaker 2 (06:52):
I'm glad you brought up the topic of emotion there semi,
because that's exactly where I wanted to and to kind
of move the conversation. I guess some interested in knowing
more about what you think it is that you know,
can make people so emotional when it comes to dealing
with money, but perhaps in ways that they might not
(07:15):
be when dealing with, you know, other issues in other
parts of their life. Is there anything kind of behind
that are unique about money that makes people feel that way?
Speaker 4 (07:24):
Well, I think money, as you know, or the exchange
of money, is deeply linked to our sense of security, identity,
self worth, and even love. So you know, the basic
need money is linked to survival. It provides us with
food and shelter, healthcare, all the other essentials. And when
(07:47):
money is scarce, it triggers this deep primal fear around
safety and security, and this fear can create anxiety, stress
or even panic. But then you've also got financial instability.
You know, if we lose a job, you know, made redundant,
we lose a job or in debt, this can create
(08:11):
a real sense of vulnerability and insecurity. And you know,
this fear of the unknown or not having enough can
also be overwhelming. Then you've got things like social status.
You know, money is often equated to success, status and power.
And you know, a lot of us, even though we
might not want to admit it, we do care about
(08:33):
what other people think of us as well, and money
can be quite closely linked to feelings of shame or
inadequacy if we feel that, you know, we're not measuring
up to some of those expectations that we had for
ourselves or that others have of us as well.
Speaker 2 (08:51):
So moving on from from I guess the emotional side
of things, they're semi well. One of the other parts
of I guess how people look and deal with money
that I'm interested in is the role of bias, you know,
things like confirmation bias, over confidence, some cost fallacy.
Speaker 4 (09:08):
You know.
Speaker 2 (09:08):
The ladder is something that people probably have heard of
or maybe familiar with, you know, in association with you know,
their dealings with finance and money. Obviously some people won't
be familiar with those terms. So could you give us
an example or a couple of examples totally up to
you of how these biases can play out in relation
to how we deal with money, how we deal with
(09:29):
our finances.
Speaker 4 (09:31):
Yeah, so there are different types of biases that come
into play here. You mentioned confirmation bias. Confirmation bias is
essentially when we seek out information that confirms what we
already know. Now, our brains really dislike ambiguity and not
being in the know, so our brains will very quickly
(09:55):
default to things that we already know because it keeps
us safe, it keeps us in the know. So there
may be some potential beliefs that we hold unknowingly or
knowingly around money. For example, you know, we may have
a belief that, you know, investing in the stock market
(10:17):
is really high risk, and we may then make a
decision to invest. But soon as we know that we've
you know, made a bit of a loss, we go, oh, well,
I already knew that, so why did I do that?
So we're always seeking out this confirmation bias to try
and prove ourselves correct. The sunk cost fallacy is another
(10:41):
cognitive bias that you mentioned, and this is where people,
you know, an example of this could be where people
continue investing their time, their money, or effort into something
simply because they've already invested a lot into it already,
even though there's no longer a beneficial or rational reason
(11:02):
to do so. So the sunk cost refers to any
kind of past investments that cannot be recovered, and the
fallacy bit really lies in the irrational belief that we
must keep going with it to avoid wasting any of
those past efforts. So you kind of just keep investing,
or you keep going knowing that actually you're not going
(11:24):
to make a return, but it's easier to keep going
because of all that time and effort you've already invested.
A different example could be, you know, staying in a
bad movie. Imagine that you've paid for a ticket to
go see a movie, and thirty minutes into it, you
realize that it's terrible, you're not enjoying it, and instead
(11:44):
of leaving, you decide to stay because you've already spent
that money on the ticket, and that's, you know, an
example of the money is a sunk cost. You can't
get it back whether you stay or leave, and then
the fallacy, the fallacy bit convinces you to stay on
endure the unpleasant experience, just so that you feel like
(12:07):
you've got your money's.
Speaker 2 (12:07):
Where that last part is so relatable to me, I'm
sure I'm majority.
Speaker 3 (12:13):
Is to a lot of people out there.
Speaker 2 (12:14):
I was just kind of like tacking off a list
of my head of all the times that I've probably
done exactly that.
Speaker 3 (12:21):
So, yes, probably a bit of learning that I can
do from that, Simmy.
Speaker 2 (12:26):
I was about to ask you this, but it's obviously,
you know, a core part of the book.
Speaker 3 (12:31):
So can you please tell us about your five q's formula?
You know, what is it all about and how can
it help people?
Speaker 2 (12:38):
I guess in this you know, setting of finance and
money make better decisions.
Speaker 4 (12:45):
Yeah, So the five Qu's formula essentially is asking yourself
five core questions at the start of your day. Now,
the start of the day is a really wonderful time
to prime your mindset before you get distracted by social media, emails,
all the other things that life throws at us that
(13:06):
can take our attention and course off in a different direction,
in a direction that is not really meaningful or purposeful
to us. Now, the five Ke's formula is backed by
psychological science, and each question has been curated to tap
into your emotions, your thoughts, focus, attention, and behaviors. And
(13:35):
a great way to remember you know what those questions
are about is through the simple acronym PRIME. And I'll
just briefly share what the acronym stands for, because it'll
give you a sense of you know what each of
those questions are about and why we're asking those questions.
So the piece stands for pinpoint your emotions and your feelings. Now,
(13:58):
I'm not asking you to, you know, have a therapy
session with yourself in the morning. This is essentially just
acknowledging and paying attention to what emotion or feeling you
are experiencing at the start of the day because that
acts as a baseline for how you want to if
you choose to regulate or shift that emotion throughout the day.
(14:21):
But we need to pay attention to it so it
doesn't you know, overtake us or intensify during the day.
The AR stands for recognized gratitude. Now, traditional gratitude practices
get you to write down a list of all the
things that you're grateful for, and you know, whilst that
can be helpful, this particular question asks you to or
(14:44):
it cultivates more of a deeper sense of gratitude, which
increases your serotonin levels, which are your feel good, happy
good neurotransmitters, and also the dopamine levels in your brain,
which is your motivation neurotransmitters. So in a way, this
particular question is giving you that natural dopamine boost at
(15:08):
the start of your day. The third one then is
the eye, which is identify things in your environment that
could be working better for you that day, so things
that are working well and things that could be working better.
And what this question does is it actually helps you
(15:29):
have your natural brains natural hard wired negativity bias. We
all are hardwired to look out the threats and harm
and things that are potentially negative to us or could
have a negative impact on us. So what this particular
(15:50):
question does is it actually hacks that negativity bias and
gets you to look out for positive things or things
that could be improved. And what you know, when you
do that at the start of your daytime, it then
creates this domino effect that you then start to notice
other things throughout your day that are working well, and
(16:10):
it builds this momentum, It gives this sense of progression
progress and fulfillment. And then we move on to the
m which is make a list of three high impact
tasks that you're going to focus on that day. And
you're probably thinking, oh my god, I'd normally have more
than three tasks that I've got to do in a day.
(16:31):
It's like a long laundry list. I completely get that,
but having a long laundry list of to do things
that you need to do can really feel unsatisfying and
unfulfilling because most of us are continually working really hard
to tick off that list, but we never get to
the bottom of it. Not because we're not working hard
(16:53):
and we're you know, being busy and trying to do things,
it's because there's always so much to do. So this
part of the formula gets you to really identify what
are the three things that are going to truly move
the dial for you in your business, in your personal life,
or in your work. And there's a chapter dedicated in
(17:17):
the book that really helps you identify what your three
things could be for a given day. And then each
day when you do that, there'll be a different three
things that you focus on. And then we have the
e the ease the envision how you want to show
up for your day, And I love this question. This
question is at the end of the formula for a
(17:38):
reason because it helps you to remind yourself of your values,
your superpowers, so the things that you're really good at
and that you enjoy doing, and your energy, and it's
helping you make that really conscious, intentional decision of how
you want to show up for your day, the tasks,
the interactions that you are going to come across in
(18:01):
your day, and it helps you take accountability. So you
asked me the question, you said, well, how can this
really help them? The five PUS formula with you know
our decision making or how we approach our finances, and
you know our money mindset. I think you know very
often because money is so much so driven by emotions,
(18:26):
it's hard to make clear rational decisions when we're feeling
stressed and overwhelmed and we're scattered. But if our attention
is focused and we're very intentional about what we're trying
to do what's important to us, our emotions are balanced
(18:47):
and calm, is so much more easier to then approach
your finances. So the five PUS formula takes essentially five
minutes to go through those questions once you know them,
and that can help you you to be so much
more intentional, calm, present and connected with whatever you do
that day, even if it is looking at your finances
(19:09):
or making some really significant financial decisions.
Speaker 3 (19:13):
To me, as you were talking about creating lists there
and narrying on lists, I was looking over the table
at my massive Friday priorities list, which is a smaller
part of my larger.
Speaker 2 (19:26):
Weekly list, and I was thinking, oh, Jesus could definitely
be cut down a little bit further.
Speaker 3 (19:31):
So I don't really get your point on that one.
Speaker 4 (19:34):
Yeah, And you know something, Tom, You know, if you
did that every day, the three high impact tasks over
a week, fifteen high impact tasks that really move the
needle are done, and then over a month, wow, like
sixty high impact tasks are done. Like that's a real
sense of satisfaction, fulfillment, you know, progress. And I think
(19:59):
often where we really critical on ourselves and without realizing
get these long to do lists can really greater us
and make us feel that we're just not progressing and
we're not doing enough.
Speaker 2 (20:11):
I can completely relate to that as well. I think
just thinking about finances very quickly I can think of
probably at least five or ten bits and pieces that
I know they're in the back of my head that
I need to kind of narrow in on, including checking
my insurance settings in my superannuation and putting in some
of my recent investments into my little spreadsheet, which I
(20:32):
just haven't done, and canceling a credit card.
Speaker 3 (20:35):
Cheez, there's just one. I forgot about that.
Speaker 2 (20:36):
So you know, this could be This could be a long,
long list that could be narrowed down a little better
to approach it more effectively.
Speaker 3 (20:45):
See I'm a conscious time. So two very important questions
before I'll let you go.
Speaker 2 (20:50):
First of all, where can people get a copy of
your book if they're interested in reading more?
Speaker 4 (20:55):
Yeah, Productivity Joy is available in all good bookstores across US.
Straight La is available directly to buy on Amazon and
also from my website, which is semiret dot com.
Speaker 3 (21:09):
Fantastic.
Speaker 2 (21:09):
And if people are interested in following you on social
media or obviously on your website, where can they Where
can they find you?
Speaker 3 (21:18):
Yeah?
Speaker 4 (21:18):
I'm very active on LinkedIn and Instagram and always very
keen to hear from people who are using the formula
to see how it's helping and benefiting them, and also
if you know, if people have questions around the practice
and how they can apply into their daily lives, more
(21:40):
than welcome for people to get in contact with me
and through the website as well.
Speaker 2 (21:45):
Brilliant Well, Sammy, thank you so much for joining us
today and for providing some seriously interesting and useful in
science which I you know, I think I'm thinking about already.
It's been a fascinating chat and a pleasure having you
on the show, so thank you so much for joining us.
Speaker 4 (22:02):
Thank you, Tom, it's been a real pleasure.
Speaker 2 (22:04):
That's it for this episode of the Friends of Money podcast.
But don't forget to jump on our website moneymag dot
com dot Au for your daily dose of financial news.
We can go crave yourself a copy of the LED's
edision of Money magazine in all good newsagents. As always,
Friends of Money will be all right back in your
podcast feeds next week, So until then, my name's Tom Watson.
Speaker 1 (22:25):
Goodbye for now, thanks for listening to the Friends with
Money podcast. For credible, independent and easy to understand financial commentary,
visit moneymag dot com dot au. Please remember that the
views and opinions expressed in this podcast are general in
nature and further, independent advice and research based on your
(22:46):
personal circumstances should be sought before making an investment decision.
Welcome to the Friends with Money podcast, brought to you
by Money Magazine, creating financial freedom for Australians since nineteen
ninety nine.
Speaker 2 (00:13):
Hello and thanks for joining us for another episode of
Friends with Money, money Magazine's podcast to help you earn, save,
and achieve your financial goals. My name is Tom Watson,
a senior journalist here at Money Magazine, and as always
it is a pleasure to.
Speaker 3 (00:28):
Be with you.
Speaker 2 (00:29):
I've want to say that I am always fascinated by
the intersection between money and psychology, but it's one of
those topics that you know, we probably don't talk enough
about on Friends with Money, and more generally. Having said that,
Dedicade listeners may remember episode sixty eight when we had
to chat about the dangers of retail therapy, and maybe
our more recent episode as well on financial goal setting,
(00:53):
which was our episode one four seven. Off top of
my head, of course, Zarah, I'm both excellent episodes and
well worth checking out if you haven't listened to them already.
Today we are going to continue on this theme with
a discussion touching on everything from analysis paralysis to over
confidence and sunk cost fallacy and the relationship between those
(01:14):
and how we approach our dealings with money. Plus we'll
get into a technique design to help us be more
effective with decision making more broadly, but also when we're
dealing with our finances, so to help us dive into
all of that and more. I am very pleased to
say that joining us today is a scientologist, executive leadership
(01:35):
coach and author of the newly published book Productivity Joy.
Sidme rayet Seem Welcome to friends of Money. It is
a pleasure to have you on.
Speaker 4 (01:44):
Hi, Tom, pleasure to be here, Simmy.
Speaker 2 (01:47):
To start us off, would you like to perhaps give
us an elevator pitch about your book, Productivity Joy. You
know what's it all about, and perhaps just as important,
what inspired you to write it in the first place.
Speaker 4 (02:00):
Yeah, Productivity Joy is about a system, a reliable system
that's backed by psychological science, that it takes five minutes
a day to help you feel energized and be effective
for your day. It's something that I found myself at
a time of my life four and a half years
ago where I was stressed, overwhelmed, at the brink of burnout,
(02:24):
and I remember very specifically this precise moment living in
the UK in a two bed flat with my little
family in the West End of London. Arriving home a
Friday evening, opening the door, and I could see socks
and shoes and bags and toys all the way down
(02:44):
the hallway, and I could hear all this joy and
laughter coming from the TV room. And I was furious.
I was exhausted. I slammed my bags down and I'm
walking down the hallway and I opened the door to
the TV room and my kids and my hubby stop
what they're doing, and they looked up at me and
(03:04):
they said, oh, here comes the bull.
Speaker 2 (03:09):
Now.
Speaker 4 (03:10):
That was a real wake up call for me because
although yes, they still love me, and they loved me
dearly then and they loved me dearly now, the reality was,
because I was so stressed and overwhelmed, I had become
not a joy to be around, and those closest to
me were taking a step back, and I knew something
(03:31):
really needed to change, and that change needed to start
with me. So that's when I realized that although I'm,
you know, working as a psychologist helping so many of
my clients who were also feeling this struggle, and in
this consistent juggle, I wasn't applying the tools and techniques
(03:52):
to myself. And that's when I started to doing quite
a lot of research to see what was out there
that could potentially help people busy people set their day
up for success in terms of their mindset, their emotions,
and attention and behaviors. And this is where I started
to really play around with key questions that we can
(04:13):
ask ourselves and the impact and the influence that they
have on hour brain chemistry, how we feel, and how
we show up. And this is where the five quice
formula was born.
Speaker 2 (04:26):
Well, I think we're going to get into the five
ques formula in a little bit, and you know, just anecdotally,
I think that story that you just told us about
your own experience is probably going to be so relatable
to a.
Speaker 3 (04:37):
Lot of people listening.
Speaker 2 (04:39):
Obviously, we're going to focus on the money side of
things today, so SIMI, you know, how are people's attitudes
towards money formed? You know, do they tend to happen
early on in someone's life or do they gradually develop
over time? Is there any kind of set formula or
(05:00):
is it different for everyone?
Speaker 4 (05:03):
It is different for everyone, but you know, the common
thing here is is that money our attitude towards money
can be shaped by a combination of early experiences, so
childhood experiences, our social influences, personal beliefs, and also psychological factors,
and often these are happening. These attitudes are formed subconsciously
(05:26):
over those years, and they can significantly impact our financial decisions,
our habits, and our overall wellbeing. You know, for example,
you know, if you're observing your parents or your caregivers
behavior around handling money, whether they were savers or they
(05:47):
would spend impulsively or even discuss financial stress, this you
know deeply influences children's views on money. You know, for example,
if your parents you know, a frugal children may grow
up valuing saving money, whilst you know, there could be
a household that's more focused on material purchases and they
(06:10):
could have a belief that money is more for spending.
So those parental behaviors are really play a part in
terms of our decision making and how we think and
feel and our relationship with money. And then there's also
emotional associations, so you know, if we've had financial hardships,
(06:31):
we've lost money, we've had conflict over money, or even
receiving money as a reward all of those things can
attach an emotional weight to money, And when we attach
an emotional weight to money, it's really linking money to
a sense of security, love, freedom, and stress.
Speaker 2 (06:52):
I'm glad you brought up the topic of emotion there semi,
because that's exactly where I wanted to and to kind
of move the conversation. I guess some interested in knowing
more about what you think it is that you know,
can make people so emotional when it comes to dealing
with money, but perhaps in ways that they might not
(07:15):
be when dealing with, you know, other issues in other
parts of their life. Is there anything kind of behind
that are unique about money that makes people feel that way?
Speaker 4 (07:24):
Well, I think money, as you know, or the exchange
of money, is deeply linked to our sense of security, identity,
self worth, and even love. So you know, the basic
need money is linked to survival. It provides us with
food and shelter, healthcare, all the other essentials. And when
(07:47):
money is scarce, it triggers this deep primal fear around
safety and security, and this fear can create anxiety, stress
or even panic. But then you've also got financial instability.
You know, if we lose a job, you know, made redundant,
we lose a job or in debt, this can create
(08:11):
a real sense of vulnerability and insecurity. And you know,
this fear of the unknown or not having enough can
also be overwhelming. Then you've got things like social status.
You know, money is often equated to success, status and power.
And you know, a lot of us, even though we
might not want to admit it, we do care about
(08:33):
what other people think of us as well, and money
can be quite closely linked to feelings of shame or
inadequacy if we feel that, you know, we're not measuring
up to some of those expectations that we had for
ourselves or that others have of us as well.
Speaker 2 (08:51):
So moving on from from I guess the emotional side
of things, they're semi well. One of the other parts
of I guess how people look and deal with money
that I'm interested in is the role of bias, you know,
things like confirmation bias, over confidence, some cost fallacy.
Speaker 4 (09:08):
You know.
Speaker 2 (09:08):
The ladder is something that people probably have heard of
or maybe familiar with, you know, in association with you know,
their dealings with finance and money. Obviously some people won't
be familiar with those terms. So could you give us
an example or a couple of examples totally up to
you of how these biases can play out in relation
to how we deal with money, how we deal with
(09:29):
our finances.
Speaker 4 (09:31):
Yeah, so there are different types of biases that come
into play here. You mentioned confirmation bias. Confirmation bias is
essentially when we seek out information that confirms what we
already know. Now, our brains really dislike ambiguity and not
being in the know, so our brains will very quickly
(09:55):
default to things that we already know because it keeps
us safe, it keeps us in the know. So there
may be some potential beliefs that we hold unknowingly or
knowingly around money. For example, you know, we may have
a belief that, you know, investing in the stock market
(10:17):
is really high risk, and we may then make a
decision to invest. But soon as we know that we've
you know, made a bit of a loss, we go, oh, well,
I already knew that, so why did I do that?
So we're always seeking out this confirmation bias to try
and prove ourselves correct. The sunk cost fallacy is another
(10:41):
cognitive bias that you mentioned, and this is where people,
you know, an example of this could be where people
continue investing their time, their money, or effort into something
simply because they've already invested a lot into it already,
even though there's no longer a beneficial or rational reason
(11:02):
to do so. So the sunk cost refers to any
kind of past investments that cannot be recovered, and the
fallacy bit really lies in the irrational belief that we
must keep going with it to avoid wasting any of
those past efforts. So you kind of just keep investing,
or you keep going knowing that actually you're not going
(11:24):
to make a return, but it's easier to keep going
because of all that time and effort you've already invested.
A different example could be, you know, staying in a
bad movie. Imagine that you've paid for a ticket to
go see a movie, and thirty minutes into it, you
realize that it's terrible, you're not enjoying it, and instead
(11:44):
of leaving, you decide to stay because you've already spent
that money on the ticket, and that's, you know, an
example of the money is a sunk cost. You can't
get it back whether you stay or leave, and then
the fallacy, the fallacy bit convinces you to stay on
endure the unpleasant experience, just so that you feel like
(12:07):
you've got your money's.
Speaker 2 (12:07):
Where that last part is so relatable to me, I'm
sure I'm majority.
Speaker 3 (12:13):
Is to a lot of people out there.
Speaker 2 (12:14):
I was just kind of like tacking off a list
of my head of all the times that I've probably
done exactly that.
Speaker 3 (12:21):
So, yes, probably a bit of learning that I can
do from that, Simmy.
Speaker 2 (12:26):
I was about to ask you this, but it's obviously,
you know, a core part of the book.
Speaker 3 (12:31):
So can you please tell us about your five q's formula?
You know, what is it all about and how can
it help people?
Speaker 2 (12:38):
I guess in this you know, setting of finance and
money make better decisions.
Speaker 4 (12:45):
Yeah, So the five Qu's formula essentially is asking yourself
five core questions at the start of your day. Now,
the start of the day is a really wonderful time
to prime your mindset before you get distracted by social media, emails,
all the other things that life throws at us that
(13:06):
can take our attention and course off in a different direction,
in a direction that is not really meaningful or purposeful
to us. Now, the five Ke's formula is backed by
psychological science, and each question has been curated to tap
into your emotions, your thoughts, focus, attention, and behaviors. And
(13:35):
a great way to remember you know what those questions
are about is through the simple acronym PRIME. And I'll
just briefly share what the acronym stands for, because it'll
give you a sense of you know what each of
those questions are about and why we're asking those questions.
So the piece stands for pinpoint your emotions and your feelings. Now,
(13:58):
I'm not asking you to, you know, have a therapy
session with yourself in the morning. This is essentially just
acknowledging and paying attention to what emotion or feeling you
are experiencing at the start of the day because that
acts as a baseline for how you want to if
you choose to regulate or shift that emotion throughout the day.
(14:21):
But we need to pay attention to it so it
doesn't you know, overtake us or intensify during the day.
The AR stands for recognized gratitude. Now, traditional gratitude practices
get you to write down a list of all the
things that you're grateful for, and you know, whilst that
can be helpful, this particular question asks you to or
(14:44):
it cultivates more of a deeper sense of gratitude, which
increases your serotonin levels, which are your feel good, happy
good neurotransmitters, and also the dopamine levels in your brain,
which is your motivation neurotransmitters. So in a way, this
particular question is giving you that natural dopamine boost at
(15:08):
the start of your day. The third one then is
the eye, which is identify things in your environment that
could be working better for you that day, so things
that are working well and things that could be working better.
And what this question does is it actually helps you
(15:29):
have your natural brains natural hard wired negativity bias. We
all are hardwired to look out the threats and harm
and things that are potentially negative to us or could
have a negative impact on us. So what this particular
(15:50):
question does is it actually hacks that negativity bias and
gets you to look out for positive things or things
that could be improved. And what you know, when you
do that at the start of your daytime, it then
creates this domino effect that you then start to notice
other things throughout your day that are working well, and
(16:10):
it builds this momentum, It gives this sense of progression
progress and fulfillment. And then we move on to the
m which is make a list of three high impact
tasks that you're going to focus on that day. And
you're probably thinking, oh my god, I'd normally have more
than three tasks that I've got to do in a day.
(16:31):
It's like a long laundry list. I completely get that,
but having a long laundry list of to do things
that you need to do can really feel unsatisfying and
unfulfilling because most of us are continually working really hard
to tick off that list, but we never get to
the bottom of it. Not because we're not working hard
(16:53):
and we're you know, being busy and trying to do things,
it's because there's always so much to do. So this
part of the formula gets you to really identify what
are the three things that are going to truly move
the dial for you in your business, in your personal life,
or in your work. And there's a chapter dedicated in
(17:17):
the book that really helps you identify what your three
things could be for a given day. And then each
day when you do that, there'll be a different three
things that you focus on. And then we have the
e the ease the envision how you want to show
up for your day, And I love this question. This
question is at the end of the formula for a
(17:38):
reason because it helps you to remind yourself of your values,
your superpowers, so the things that you're really good at
and that you enjoy doing, and your energy, and it's
helping you make that really conscious, intentional decision of how
you want to show up for your day, the tasks,
the interactions that you are going to come across in
(18:01):
your day, and it helps you take accountability. So you
asked me the question, you said, well, how can this
really help them? The five PUS formula with you know
our decision making or how we approach our finances, and
you know our money mindset. I think you know very
often because money is so much so driven by emotions,
(18:26):
it's hard to make clear rational decisions when we're feeling
stressed and overwhelmed and we're scattered. But if our attention
is focused and we're very intentional about what we're trying
to do what's important to us, our emotions are balanced
(18:47):
and calm, is so much more easier to then approach
your finances. So the five PUS formula takes essentially five
minutes to go through those questions once you know them,
and that can help you you to be so much
more intentional, calm, present and connected with whatever you do
that day, even if it is looking at your finances
(19:09):
or making some really significant financial decisions.
Speaker 3 (19:13):
To me, as you were talking about creating lists there
and narrying on lists, I was looking over the table
at my massive Friday priorities list, which is a smaller
part of my larger.
Speaker 2 (19:26):
Weekly list, and I was thinking, oh, Jesus could definitely
be cut down a little bit further.
Speaker 3 (19:31):
So I don't really get your point on that one.
Speaker 4 (19:34):
Yeah, And you know something, Tom, You know, if you
did that every day, the three high impact tasks over
a week, fifteen high impact tasks that really move the
needle are done, and then over a month, wow, like
sixty high impact tasks are done. Like that's a real
sense of satisfaction, fulfillment, you know, progress. And I think
(19:59):
often where we really critical on ourselves and without realizing
get these long to do lists can really greater us
and make us feel that we're just not progressing and
we're not doing enough.
Speaker 2 (20:11):
I can completely relate to that as well. I think
just thinking about finances very quickly I can think of
probably at least five or ten bits and pieces that
I know they're in the back of my head that
I need to kind of narrow in on, including checking
my insurance settings in my superannuation and putting in some
of my recent investments into my little spreadsheet, which I
(20:32):
just haven't done, and canceling a credit card.
Speaker 3 (20:35):
Cheez, there's just one. I forgot about that.
Speaker 2 (20:36):
So you know, this could be This could be a long,
long list that could be narrowed down a little better
to approach it more effectively.
Speaker 3 (20:45):
See I'm a conscious time. So two very important questions
before I'll let you go.
Speaker 2 (20:50):
First of all, where can people get a copy of
your book if they're interested in reading more?
Speaker 4 (20:55):
Yeah, Productivity Joy is available in all good bookstores across US.
Straight La is available directly to buy on Amazon and
also from my website, which is semiret dot com.
Speaker 3 (21:09):
Fantastic.
Speaker 2 (21:09):
And if people are interested in following you on social
media or obviously on your website, where can they Where
can they find you?
Speaker 3 (21:18):
Yeah?
Speaker 4 (21:18):
I'm very active on LinkedIn and Instagram and always very
keen to hear from people who are using the formula
to see how it's helping and benefiting them, and also
if you know, if people have questions around the practice
and how they can apply into their daily lives, more
(21:40):
than welcome for people to get in contact with me
and through the website as well.
Speaker 2 (21:45):
Brilliant Well, Sammy, thank you so much for joining us
today and for providing some seriously interesting and useful in
science which I you know, I think I'm thinking about already.
It's been a fascinating chat and a pleasure having you
on the show, so thank you so much for joining us.
Speaker 4 (22:02):
Thank you, Tom, it's been a real pleasure.
Speaker 2 (22:04):
That's it for this episode of the Friends of Money podcast.
But don't forget to jump on our website moneymag dot
com dot Au for your daily dose of financial news.
We can go crave yourself a copy of the LED's
edision of Money magazine in all good newsagents. As always,
Friends of Money will be all right back in your
podcast feeds next week, So until then, my name's Tom Watson.
Speaker 1 (22:25):
Goodbye for now, thanks for listening to the Friends with
Money podcast. For credible, independent and easy to understand financial commentary,
visit moneymag dot com dot au. Please remember that the
views and opinions expressed in this podcast are general in
nature and further, independent advice and research based on your
(22:46):
personal circumstances should be sought before making an investment decision.
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