Fixing Your Broken Financial Behavior w/ Dan Egan #911

Episode Transcript
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Speaker 1 (00:00):
Welcome to How to Money. I'm Joel, I'm Matt, and
today we're talking about fixing your broken financial behavior with
Dan Egan. All right, so.

Speaker 2 (00:26):
Why are there more millionaires? Joel? Because the basic formula, right,
it's pretty simple. Just spend less than you make so
that you can invest in low cost, diverse fied index funds.
Like we literally, we're not at all joking when we
say that if you follow those straightforward steps, and it
won't be long before you are sitting on millions of
dollars in retirement. It's that simple. But that doesn't mean

(00:47):
it is that easy. And evidently we are the reasons
that we don't have more money or whatever it is
that we want in life. Here to talk to us
today about that is behavioral scientist Dan Dan is the
director of Behavioral Finance and Investing over at Betterments, and
today we're going to discuss how human psychology impacts our

(01:09):
financial decision making. Dan, and thank you so much for
taking the time to speak with Joel and I today.

Speaker 3 (01:14):
I'm very happy to be here, looking forward to the conversation.

Speaker 1 (01:16):
We are too, Dan, And the first question we ask
everyone who comes on the show is what's your craft?
Beer equivalent. I like to think of that as kind
of a smart behavioral thing to have something to spend
money on proactively, even though you're doing the smart thing
with your money on the flip side, investing and saving
for your future. What's that for you? What's your craft
beer equivalent?

Speaker 3 (01:34):
So I've been doing something new a little bit lately,
where with questions like this, I had my answer, and
I'll tell you my answer, and then i'll tell you
my wife's answer for me. My answer was, and this
is something I'm so happy about. It's like a little
luxury that makes me happy on the time. I have
multiple of the same thing in different locations so that
I don't have to worry about having that one thing.

(01:55):
So I have like six pairs of the same sunglasses
and ones inside the car and the other ones in
my back, et cetera. It costs a bit more, you know,
like it feels a little bit unfrugal because you could
just have one. But I absolutely love having these extras
and spares.

Speaker 1 (02:08):
Everything very cool.

Speaker 3 (02:09):
So I was talking to my wife about going on
the podcast in this question, and I was like, but
I want you know, like you know me, you're an
outside perspective, How would you answer that question for me?
And without hesitation, instantaneously, she said, power tools. Apparently I
have fully entered my middle aged dad diy arc where

(02:32):
my splurge is a one hundred and fifty two hundred
dollars power tool that I'm going to use three times.
But I'm really happy that I have it.

Speaker 1 (02:39):
That is awesome.

Speaker 2 (02:40):
I actually I really do the job easier if you
have the right tool on hand.

Speaker 1 (02:42):
And I'm curious the multiple things in different places. I
also love that. Is that because you forgot stuff like
your sunglasses? Because I've got way too many pairs of
sunglasses because I just lose them regularly, and so I
buy three every summer and I place them in random places.
But I guess what other things do you to lose?

Speaker 2 (02:57):
Is frugal card? Three of the same thing, they're like eight.

Speaker 1 (03:00):
Dollars, Like they're not nice, but they're like ray bans
or anything like that. But what else? What else fits
into that category? And is it because you're you got
showed up someplace and you're like, ah, I forgot the
thing again?

Speaker 3 (03:10):
Yes, little like spare battery packs for my phone charging cables, chapstick,
perhaps an easy one, But that's that's cheap. Nice water
bottles I have when at work. Oh, actually, here's another example. Keyboards.
I have the exact same Apple keyboard with like the
touch I D thing in the office as I do

(03:30):
at home. And I bought both of them myself because
I didn't want to have different keyboards between home and work.
Now that I say it out loud, it sounds really OCD,
and maybe it is. But yeah, I want, like I
was like this, I spend so many hours on these things.
I want them to be the same and make me happy.

Speaker 1 (03:45):
No, I get it.

Speaker 2 (03:46):
There's something to be said about redundancy, and like, that's
what you're prioritizing here, the ability to not have to
schlep something like I very much. I'm just so optimizing
frugal and cheap. Some would say that I'm you know,
I'm lugging my water bottle home from the week, Like
I keep a water bottle here at work, but I
don't use it during the week, but I take it
home on the weekends and it's just something I have
it I do. But I could see Dan in this situation.

(04:08):
He'd be like, no, no, no, no, second, I've got the
same water bottle at home that I get.

Speaker 1 (04:12):
To use, and the water bottle Matt uses Dan he
I believe found on the side of the road or something, right.

Speaker 2 (04:16):
So, no, it was at a conference, then nobody claimed it.
In the hotel, I was helping the clean up after
our party and the hotel staff was about to toss
this perfectly is still.

Speaker 1 (04:26):
Looking for that water battle.

Speaker 3 (04:27):
I feel like my wife is going to tell me
I shouldn't have told you guys this, but they can
do it anyway. Maybe one of the biggest riskiest things
I did in our marriage was one day we were
walking along the street in Philadelphia and there was this
very cool, bright green hoodie on the side of the road.
There was like dirty but not like messed up. And
I looked at I was like, that's really cool. I
really like that, and she was like, leave it, don't.

(04:48):
I picked it up. I took it home, I put
it through the washer. It's still one of my favorite hoodies.
It's fantastic. Oh my goes, I can't believe you did that.

Speaker 2 (04:58):
I like how she said leave it like she was
walking walking y'all's dog, but instead she was talking to you, Dan.
I've ever seen that to my dog when they would
pick something up with her mouth the.

Speaker 3 (05:07):
Exact same tone. Leave it.

Speaker 2 (05:09):
Oh my gosh, you also have a okay, and this
is why I've figured that Joel and I would be
fast friends. But you've got a bunch of bikes, right, Like,
how many bikes do you have? Because you're up in
New York City. Space comes out of premium there.

Speaker 3 (05:22):
So I would now say that I have three. I've got,
you know, like you're It's called a triathlon bike, so
it's a little bit like a road bike, dropped handles,
thin tires. I like it, but the fact is is
I've gotten older, I don't really I'm not going to
do the performance thing much anymore. I don't go that fast.
So my main one is a what's it called. It's

(05:43):
like a fortified like city hybrid bike. It's got the
pannier rack.

Speaker 1 (05:47):
It's my steady like gravel bike.

Speaker 3 (05:49):
Yeah, exactly, like get into work at home.

Speaker 2 (05:51):
That's my daily commuter.

Speaker 3 (05:52):
And then I do have a piece of land upstate
and we have bikes there, and that is where I have.
You know, again, one of my my biggest purchase is
that I'm very happy about I have an electric rad
bike where I can bang out sort of like twelve
mile rides with like my kids sitting on the penny
or hauling her on her bike without a problem. So

(06:14):
I have three at this point.

Speaker 1 (06:15):
That's awesome. Is the rad Is it a rad wagon?

Speaker 3 (06:19):
It's the convertible one, one that's like a Brompton that
you can collapse.

Speaker 1 (06:23):
Okay, cool, I too have a power bike. I love
it hauling the little man around to and from school
and stuff like that. So awesome.

Speaker 2 (06:30):
Okay, let's move. We better start talking about money here
before we leave. Yeah.

Speaker 1 (06:33):
Yeah, but we do talk about bikes a lot. They're
money saving instruments, right, But let's talk about behavioral finance. Dan.
I'm going to ask you three questions at once. What
is behavioral finance? How new is the discipline? And why
were you attracted to it? All?

Speaker 2 (06:47):
Right?

Speaker 3 (06:47):
Behavioral finance is just you know, taking into account the
fact that we're humans in financial models. And I can
go through some specific examples of this. They'll resonate. They're
pretty simple. But it's just that we don't make decisions
like computers or like mathematicians would, and it's pretty predictable
how we're going to make decisions that are different. It
is relatively new in that I think probably some of

(07:11):
the most seminal work that has influenced me was done
in the nineteen seventies. So the paper that won Daniel
Konneman and Namedstavirsky the Nobel Prize was published in nineteen
seventy four. So it takes a little while for academic
findings to get sort of substantiated and brought over to
the commercial world. So twenty thirty years isn't that bad.
I've been doing this now for about fifteen years in

(07:34):
an applied kind of business setting. So I actually remember
in college I was doing economics and the most interesting
part of it was the introspective of microeconomics. Why do
we make decisions this way? How do we think about
risk and return? And can we do it better? There's
sort of systematic patterns in how people mismake decisions about

(07:54):
what's going to make them happy in the future in
terms of how and when they spend money. And is
there like a career there where I get to go
and think about, oh, you keep making the same mistake
over and over again with money, maybe you could help
other people avoid that mistake?

Speaker 2 (08:07):
All right, Well, you mentioned maybe sharing some examples like
what are the most common behavioral patterns you know of
human fallibility of these mistakes that you see, and how
do they tend to impact money decisions that we're making
us people.

Speaker 3 (08:22):
So the core one, the core, the one that won
the Nobel Prize is a model called prospect theory that
I think mostly just has like three core parts. The
first is that our views of things are context dependent
or reference point dependent. So if you are making one
hundred thousand dollars a year, you are going to look

(08:42):
at a ten thousand dollars windfall way differently than if
you are making thirty thousand dollars a year. The amount
that you're willing to risk to get that ten thousand
dollars is going to be different. So the first thing,
which again is very into it, is just we are
not kind of computers that look at how much money
will I end up with? We are people who say,
here's where I am now, what's the change from where
I am now? When we're considering a decision. So number

(09:05):
one reference point dependent. Number two, we're risk averse, which
is that we generally are going to require there to
be a bigger payoff if we're going into a risky situation.
The neat thing that prospect theory found is that while
that's true more in the gain setting, it actually flips
in losses. We are risk seeking in losses, which this

(09:28):
comes up in gambling a lot, where if you are losing,
you're gonna be like, I want to double down, I
want to get back to even. It comes up in
single stock investing a lot where this translates over to
something called the disposition effect, where people will sell stocks
that have gone up in value because it feels good.
They're closing out again. It feels nice. But people who

(09:48):
are holding onto a losing stock will hold on to
it for nearly twice as long in the hope that
they'll get back to even. And in fact, if they
get back to even, they sort of sell out of
that stock immediately because they're like, few that sucked, but
at least I didn't lose any money on it. So
those three things reference dependence, risk aversion, and gains and
risk seeking lawsuits is prospect theory, and it's been incredibly

(10:08):
powerful for explaining a wide array of behavior about insurance
or gambling behavior, or investor behavior, or what neighborhood we
choose to live in, and how to incentivize teachers to
improve their students' test scores.

Speaker 1 (10:20):
You wrote At one point you wrote that finding a
bias is easy, Fixing it is hard, which makes sense,
Like you could just kind of watch humans walk down
the street and be like, idiot, that was a dumb move.
Can't believe that person did that. It's so easy to
and same like I could look in the mirror and say,
like one hundred things I did that were really done
that day. It's easy to identify the biases. But when
it comes down to actually like fixing those errors in

(10:44):
maybe the way in particular that we approach our personal finances,
what does that look like?

Speaker 3 (10:48):
So the first element of it is admitting or you
know that the first the first step is admitting that
you've done something wrong or that you're doing something wrong,
which is actually a big step.

Speaker 1 (10:59):
Starting to sound twelve step program here.

Speaker 3 (11:01):
Yeah, saying like over and over again, I do something
that is not in my own best interest. You have
to have enough like letting go of ego that you're like, eh,
I should probably improve that and it's something that I
should do better. A lot of people aren't going to
get past that first step of having some introspect in
saying I could be better if I changed this somehow.
This is something that's not actually how I want to behave. However,

(11:22):
it is human nature to behave in a certain way.
We have a lot of like automatic processes that run
so that we don't have to think about them. Changing
your behavior is tough. So number one, you have to
say this is something I want to change. Number two,
you have to set up habits or patterns or external
prostheses to get you to do those things differently and
stick with them over a period of time. So the

(11:42):
analogy I like to use is it's very easy to say, like, oh,
you're short sighted, you should wear glasses. Making glasses is
really difficult. Remembering your glasses and remembering to wear your
glasses is a little bit as much harder. So when
we find a behavioral bias, it's nice, but it's sort
of like the beginning of the are people going to

(12:02):
admit and want to be helped with this thing? Are
they going to be able to let go pride in
you go and say, yeah, I'm flawed and here's something
that I would like to be better at. And number two,
can we set up an environment or tools or accountability
patterns that help them actually change that behavioral pattern.

Speaker 1 (12:17):
We'll talk to us about that.

Speaker 2 (12:18):
I guess you said something a second ago external prosthesis, right,
So like it sounds like what you're talking about exoskeleton
or like systems for us to exist within. It's almost
like when the problem shows up, you already need to
have something happening, right. Like It's funny, like we were
just talking about this with bit when it came to
bitcoin and investing, because we've seen a run up recently
and I was just like, dang it, I feel like

(12:40):
this is something I should have addressed because we own
a small amount of bitcoin, not much, but I was like,
I prior to this most recent run up, I wish
I would have created some sort of rule that said that, oh, right,
once it hits one hundred k, once it hits two
hundred two and fifty, what am I going to do?
Because in the moment once it hits zero or zero,
Because then the moment you're thinking, you're either looking to

(13:02):
minimize risk, like you said, or you're looking to kind
of maximize risk and take on additional risk. Is that
what you're talking about here? You're almost talking about rules
and systems to put in place.

Speaker 3 (13:12):
Yes, and I think you touched on some good parts
of it. Number One, you need to come up with
something that I sometimes think is like a constitution that
you're writing. I hear, are the rules for how I
am going to do this. It's not necessarily what policy
you're going to implement, but even think about, Okay, I'm
going to write down my bitcoin trading strategy and it

(13:34):
will say if bitcoin does this, I will do this,
and if bitcoin does that, I will do that. So
you've already set out you're sort of like your policy,
your strategy. Now you have to have some way to
implement it that doesn't rely on your self control and
doing it in the moment. And that's really the hard part.
It's easy to say, like I'm going to eat healthy.
Here's what I'm gonna eat Monday, Tuesday, Wednesday, Thursday. How
are you going to handle it when the snack tray

(13:55):
comes around? Yeah, So that's the process. Processes is the
idea of kind of being a bionic person, having external
things glasses for example, that help you to in effect
see the world or interact with the world in the
way that you really want to. So a good example
of this that I think it's so illuminating in multiple ways.

(14:17):
There's a study that was done with a German brokerage
so like trading brokerage, stock brokerage, online stock brokerage, and
what they did is they said, for free, no cost
to you, we the researchers are going to send you
performance reports for your accounts every three months. And they
did this off the back of some research that found

(14:39):
that generally speaking, people don't know what their own portfolio
returns are, or if they do, they tend to pay
more attention when they believe that they're going to have
beaten the market and be up, then underperform the market
and or be down. So when we pay attention to
how we've done is very asymmetric. We pay more attention
when we think it's going to make us feel good,
and so most people don't realize how often and when

(15:01):
they have underperformed or done poorly at investing. So these
reseachers just said, cool, we want to give people feedback,
Like a professional portfolio manager whose job it was to
get We're going to give them these performance reports every
three months. For I believe it was a year and
a half, and it told them, you know, like what
percentage of trades you made did well? Did you beat
the index? Did you underperform? Were you overweight in specific sectors.

(15:23):
It was very like, at some level like dry stuff,
but it was a feedback loop that told them unequivocally,
here were your returns, here were the returns of the
market over the same period, and here's some other information
about you. And what they found is that at the
end of I believe, one year of sending these people
reports again just for them over the course of the
year every three months these personalized performance reports, people started

(15:45):
trading less. They were more likely to use kind of
broad based index funds, they were more diversified. So this
was a good signal that like this kind of personalized
feedback that tells somebody, hey, maybe you're not so good
at this, Maybe you could, you know, spend your time
doing other things and it would be a better use
of your time. It works. At the same time, that
brokerage after the study was done, was like, cool, let's

(16:07):
shut this down because people are trading less, yea, and
they're not happy that we're telling them that they're doing
it best.

Speaker 1 (16:11):
Okay, I really want to ask you this then, because
you're right, like, there's as someone who's in charge of
architecting kind of behavioral things for betterment, behavioral elements to
help investors make better decisions. You've done some really great work,
but can't you also use your powers for evil? And
aren't there companies doing this like hijacking our attention with

(16:33):
advertising companies, advertising companies, social media companies. There's this way
in which you can say, ah, here's what's true about
human behavior. Let me exploit this from my own personal benefit.
And it sounds like that company maybe was onto something
good and then abandon it because they realized maybe it
was benefiting investors but not the company itself.

Speaker 3 (16:51):
Absolutely, I think unfortunately this is I feel like there's
a gravitational pull towards free and easy and things that
make us feel good that we only learn to get
out of after we've had enough experience. So definitely, I think.
You know, like one of the pieces that I wrote

(17:12):
a while ago that I was kind of coming back
to was this allure of free and how free is
so much better than paying any little amount. But that
means that you have a very different relationship with whoever's
providing the service, Like if your stock brokerage is free,
they're getting paid by somebody else, which means you kind
of don't have any like leverage with them to say,
here's the service that I want, here's how I would
like things to be different, here's how you could improve

(17:32):
things for me, and like I'll pay more for it.
The other element of it that I think is pretty
tough is there's a smaller market for people who want
that's the right way to put this, For people who
have experienced their own mistakes and kind of have a
low enough you go to say, like, I want somebody
to help me with this, compared to I think it

(17:53):
was like decades ago the e trade adverts, where you know,
it's like this very kind of like alpha male. I'm
going to train and make lots of money and be
such a kind of like just alpha male. Some words
I can't use. The idea there is, like it takes
time and good feedback loops for you to realize these

(18:16):
perfectly human faults within yourself and want to help handle them.
I think at better in One of the nice things
is that generally speaking, the people who we deal with
either have already gone through that process and come out
the other side. They've climbed Mount stupid and walked down
the other side, or they just went around it entirely
because they weren't interested in it, or it never really
appealed to them. One of the neat things we did

(18:37):
years back was look at who was most likely to
try to market time, both during raging markets and falling markets,
and the answer was always young men, and that women,
almost regardless of age, were really good at just kind
of staying the course and not reacting to anything and
did much better for it. So I think the tempting
thing is that you'll hear about the kind of the
I don't know the sexiest, most glamorous, high growth things

(18:59):
that are free and so on which work, but I
think they tend to work as long as there's new, fresh,
naive people who haven't gone through the process of Eh.
I don't know, is this a good use of my
time or should I really kind of like spend my
time improving my own personal life or my own career
rather than trying to trade stocks.

Speaker 2 (19:18):
I think that makes a ton of sense. And that's
I mean, like you said, like that's what betterment is
on a mission to do and not to I guess
give too heart of a plug to that you're the
company that you're with, But like you're talking about folks
who are looking to potentially time the market, and the
solution to that is to just simply dollar cost average
into the market. But what are some of the tools
that Betterment's offering to just accommodate for our flaws to

(19:41):
make it to where we are over the course of
the long run winning right? Like And that's I guess
that's the difference here too, is that like in the
short term, it may not be as winning of a
proposition for the business right for Betterments, but it's almost
like an altruistic approach to the customer and to business
generally speaking, because it's like, look, over the long haul,

(20:01):
you're going to vastly outperform what you would have done
on your own.

Speaker 3 (20:05):
Yeah. I think both for us and for individual clients
people who are looking to invest, it can get exhausting
to chase whatever fat is out there, and it is
much better to be consistently thinking what is a core,
evergreen thing that we want to be doing, and how
do we invest and spend time to have that available.
Keep going back to the Jeff Bezos quote, if we

(20:27):
had a good quarter this quarter, it's because of decisions
that we made two or three years ago. And I
think that is true for us as a business, and
it's also true for individual investors. It's not month to month.
It is I'm going to make a decision now, and
hopefully it's going to pay off well in two to
three years. So a few examples of how we try
and make the boring, straightforward dollar cost average, low cost

(20:49):
diversified investing interesting and fun and not the boring. Option.
Number one is goals. So you think about it as
envelopes or buckets or just ways to separate out your money.
The idea is that I have a goal that is
I want to send my daughter to college. I've got
roughly fourteen years left in that how much do I

(21:10):
need to save every year when I put it into
this portfolio that's going to glypath over time in order
to make sure that she could go to college if
she wanted to, or a new car, or a house
down payment, or the biggie retirement. So the ability to
separate out individual pockets of money has a lot of benefits.

(21:31):
Number one, the more that that goal has a meaningful
emotive purpose for you, the better behavior're going to be
around saving and investing in that goal. So my daughter's
college fund, it has a picture of her. You can
upload individual pictures to betterment, and it's got a picture
of her actually at a graduation ceremony for my wife.

(21:54):
And so every time I see that goal, I'm reminded of, like,
I want to invest for my daughter's future. I want
to go to her graduation ceremony many years from now.
This is what the purpose of this is, and I
really want to make sure that I continue to save
into it and know I'm not going to get distracted
by what the market's doing over the next two months
or three months, because this is a goal that I
am investing in for fourteen years. So gold based investing

(22:15):
and making it evocative and meaningful for what the person's
trying to achieve is one of the big wins.

Speaker 1 (22:21):
Can you elaborate on evocative and meaningful real quick? Like?
And humans, there was what that Fidelity study a number
of years back about taking a selfie and using the
age yes, the aging yes yeah, like, So visualizing yourself
at a thirty years down the road makes you more
inclined to sympathize with older you, whereas thirty year old

(22:43):
individual is likely just to prioritize living for the now. Yeah,
how important is it to kind of connect those tangible
future realities to kind of our current living experience.

Speaker 3 (22:56):
So this is one of the coolest parts about being human.

Speaker 2 (23:00):
You know.

Speaker 3 (23:00):
Sometimes we talk about like how are humans actually different
than other animals and so on. Humans spend a lot
of time thinking about and imagining the future and imagining
like the past that might get them to different futures.
And the more that we spend time thinking about, like
I'm here, what do I want to have happen? What's

(23:20):
going to be required to get from a to BO
on that path, the more realistic we can actually say, like, Okay,
if I want to have a warm house this winter,
then I need to go out and chop wood now
so that I have it prepared for when the winter
is cold. It is superpower. It's this power that we're
kind of constantly a little bit living in the future.
We care a lot about our future selves, and that

(23:44):
works against the kind of the nawism, the short termism
of like how does it feel right now? What would
relieve me when markets are going down. It feels anxiety.
If you're paying attention to it, it pays. It feels
anxiety provoking. You feel like you have to do something,
you have to feel like active, you have to react
to what's going on now. The more that you start
thinking about I'm talking about Okay, I'm in this for

(24:05):
twelve years for a purpose, which is my daughter's education.
It is not to make money. Sort of addressing your
question directly, we people can like name their goals whatever
they want for them. They can attach images to them,
or you can keep it as the default. And I
think the default name is something like build wealth, which
is very generic and sounds good, but it's not very evocative.

(24:28):
It's kind of weird. I want more, you know, I'm
the Scrooge McDuck. I want more of what I got.
And so if your only benchmark for our things going
well is do I have more than I put in,
it's very it's very thrashy. Sometimes you're up, sometimes you're down.
It's very emotionally volatile. On the other hand, if you're

(24:48):
looking at okay, I am on track to send my
kid to college, and I am saving and I'm investing
in a way that it keeps me on track for it,
and I still have a I don't know, seventy eight
percent chance of hitting that amount in ten years. All
that anxiety and that thrash goes away, and you're kind
of like comforted and relaxed because you're I know the
future that I am building for is going to be correct.

(25:08):
I'm not reacting to the present. I am building for
the future. So much stuff, so much stuff around our interface,
around the way we think about things is how can
we help people focus on and build for the future.
How can we give them the tools to say, what's
the range of outcomes I can expect over a year
if I'm in this portfolio in the future, how much
do I need to save if I want to hit

(25:30):
this goal six years in the future. Instead of if
you log into a brokerage or something, what hits you
is the past you log in, it's just like, here's
how you did over the past five days, here's how
you did over the past three months. It's a fact,
but you can't change it and there's no planning for it.
So the more that we can help people, we give
them those tools to say, like, let's focus on the

(25:50):
future and focus over the things we can control and
change to make the future better. The better they invest in,
the better we do as a company.

Speaker 1 (25:56):
I love it.

Speaker 2 (25:57):
Yeah, it makes so much sense. All Right, We've got
more dumb decisions to talk about and how it does
that we can that we can avoid those and like
Dan said, build our wealth. We'll get to all of
that and more right after this. All right, we're back.

Speaker 1 (26:15):
We're still talking with Dan Egan. We're talking about financial behavior.
And the truth is us humans exhibit a lot of
poor financial behavior so much of the time. But there
are ways that we can, yeah, fix that and Dan,
Dan is an expert at this. And Dan, I'm curious,
like unique human beings. I like to think of myself
as a unique individual, and I think most.

Speaker 2 (26:36):
People do, right, snowflakes.

Speaker 1 (26:38):
Yeah, it's not in a strong way, that's right, that's right,
A very strong snowflake. I mean, I think most people
like to think themselves that way. They don't like to
think that they are one in a crowd of many.
How does like behavioral finance maybe not just help mitigate
common flaws, but how does it speak to specific personality types?
It does it have that level of sophistication, It does.

Speaker 3 (26:58):
It's definitely more work to make use of it. And
also what's tricky about it is how well can you
do it sor right we put it out of sample,
you know, like how well can I predict what behavioral
biases you are likely to have without following you around
for a year or two to actually like get the
data and run it off there. And this is something

(27:20):
that we're getting better at, and we're getting better both
at knowing when we can do it and when we
can't do it. So, coming back to some of the
things we talked about before, I was looking at data
around kind of thinking about like who do we need
to talk to and how do we need to talk
to them when markets are getting choppy around to specific
news events. You can think about elections or the FED

(27:43):
changing rates, or I don't know, some like you know,
China trade deal, et cetera. Things that are likely to
cause markets to be volatile that people never coming up.
And so we were looking at trying to predict who
was going to be the type of person, not the individual,
but the type of person who was going to de
risk their allocation ahead of a scary event. And we

(28:06):
were building up this model which was something on the
order of like how old are you, what gender do
you identify as, how long you've been with us, what
type of gold do you have with us? And then
two factors which were very powerful, more powerful than a
lot of the other stuff. Do you use our mobile app?
And how often do you log it? And so you know,

(28:29):
like I wasn't necessarily trying to figure out for a
specific person, but I can go off of some demographics
as well as a little bit of the observed behavior
for you that I have and build out a model
that it was I think it was like sixty or
seventy percent accurate. It's saying who was going to come
in and do something that we were worried about, so
that we could target just those specific people with communications
and not hit the people who weren't so much of

(28:51):
a risk with those communications. So I think it is
a cutting edge area. I think the hardest part about
it is either having the specific behavioral data of the
person themselves or being able to predict it based upon
other people like you.

Speaker 2 (29:04):
And there are just so many stinking factors that go
into that as well. But so you're talking about the
app and just I guess the frequency at which folks
are opening the app. It makes me think about neuroticism.
And I'm not sure if you were referencing the study
you're talking about, that German study, But was that the
same study as the where you addressed the Meerkat effect
versus more of the Ostrich approach and putting your head

(29:26):
in the sand. Okay, No, there are two different things. Oh, okay, gotcha.

Speaker 3 (29:30):
Well, but to us was informed by the former. So
years ago, probably about fifteen years ago, I was working
with a company that had an online brokerage for their clients,
and we were likewise running this longitudinal study that said,
like every quarter, we're gonna come out and we're going
to ask you some questions about the decisions you made,
about how you invested in, what you're looking, what your

(29:51):
forecasts are for the next quarter. And interleaven with these
various sort of practical investing questions, we asked them some
personality questions, one of which the Neuroticism scale, which is
a very well established Big five personality scale that we
thought might be linked to specific behavioral aspects and a
base model that we were building off of. There was

(30:12):
a research paper that was done by I believe George
Lowenstein in some colleagues years back that said, how do
people when do they pay attention to their accounts? And
it was a very easy model that was like, well,
they want to pay attention when it's going to make
them feel good, and they're going to not pay attention
when they think it's going to make them feel bad.
So they predicted whether or not people were going to
log in to check their accounts based upon how well

(30:32):
the market had been doing recently, and they found, you know, yes,
it's true. People log in more when it's doing good
and log in less when it's doing bad. And they
coined it the Ostrich effect. There's less attention paid when
it feels like things are going to be bad. They
did this with Vanguard client data and love Vanguard. Wonderful company,
wonderful clients. They are a very specific type of client.

(30:55):
You don't get day trader active management clients at Vantage.
So we had access to online brokerage clients who were
the counterpoint, people who for whom volatility and day trading
were the reason that they were there. And so we
found a mix of things, you know, like some people
were high neuroticisms, some people were low neuroticism. In almost

(31:17):
all cases on our platform, when returns were bad, people
also logged in more. So it wasn't like the ostrich.
It was a mere cat. Whenever there are big moves,
whenever there's danger, you're more likely to pay attention. So
hence we called it the meerkat effect contra to them.
But also we found that the higher neuroticism was, the
more sensitive to it you were, the more of a
sort of anxious personality type that you had told us

(31:39):
you had, the more likely you were to log in,
especially when things aren't going well, and likely to react.
So it's a great example of like, yes, if we
have good dimensions that we can kind of measure you on,
like neuroticism, we could give you a pre screener to
learn about you and say, okay, this person's at more
risk of this kind of behavior, we should help them
out more in this specific setting.

Speaker 1 (32:00):
That yeah, I mean, I guess you could run some
sort of personality tests for everyone signing up for the platform,
and then you'd be able to cater to them more directly.
But that also might be a like they might not
want to sign it on the platform.

Speaker 2 (32:11):
It's like yeah, yeah, you gotta find the happy medium
between like finding the best data to collect from people,
but at the same time, like you said earlier, if
they don't want to be helped in that way, well
then you're just turning people away at the door.

Speaker 1 (32:22):
Like I'm gonna go somewhere else where. They're not asking
me all these weird questions exactly. Yeah, I was struck Toure.
I was reading on your blog and you write something
the effect of purely rational people have a really hard
time making decisions, which I thought was interesting too. We're
talking about, you know, neuroticism, but the flip side of
that is like incredibly rational people. It seems like the
opposite would be true. And then you go on to

(32:43):
write about the role of faith in investing and how
important that is, and I was like, I don't know.
I think I need Dan to explain that some more.

Speaker 3 (32:49):
It sounds fascinating, though it is absolutely one of I
don't know, like what are the foundational papers or ways
of thinking about how we make decisions. Demasio is the
researcher's name, and he has some very technical name for
like the somatic mirth hypothesis I believe, which is basically

(33:09):
that there are some people who, unfortunately, for one reason
or another, the part of their brain that kind of
like tells them if things feel good or bad has
been disconnected. They don't experience pleasure and playing to the
same degree that you or I would. They're still perfectly rational,
they can do math, they can have conversations, et cetera.
So you can almost think about these hyperrational Spock people,

(33:32):
And in studying them and working with them, he noticed
that they had a hard time making decisions because they
couldn't kind of like be like, well, what do I want?
What's going to make me feel good? Because I don't
have that internal representation of good or bad or pleasure
or pain. So they would hem in hall on endlessly
about like, well, you know, like this has these good qualities,

(33:54):
and these have that's good qualities and just not make
a decision. So part of the interesting thing is like
that sense of I don't know, frustration when things take
too long, or an instinctive reaction to something being good
or icky is actually a core part of the decision
making because it forces you. It gives you a real
motivation to make a decision rather than try and list
all the pros and the cons out and one of

(34:17):
the things that I've looked at a lot. You know,
probably most people who are listening to this are familiar
with investing. They have gotten over the hump of saying
I am going to invest in some fashion. It might
be through a four to one K, through the IRA,
diversified individual stocks, whatever. Most people don't get to that point.
The set of people who invest, especially in some kind

(34:38):
of a hands on fashion outside of their four oh
one K is targeted funds pretty small. And that's because
investing is scary and it's risky, and you come into
it and that first decision you have to make where
you're like, how am I going to invest? There are
so many different competing ways of talking about it, Like
I like value stocks, I like growth stocks. I have
this strategy that one et cetera. And we don't know

(35:00):
which one of them is going to do well over
the next any period of time. Right, you almost have
to say, like, I am going to put my faith
in this way of approaching things. Maybe it's the low
cost diversifies the only thing that matters, and I'll be
okay over the long run. I have faith that this
will work out so that I can pull the trigger
and get invested. Because in the absence of some kind

(35:22):
of short circuit that says like, just get in there,
just do it, have some way, we would sit there
and be like, well, I don't know, but the FED
might do this, but China's importance to doing that, but
this company's done really well. You would just end up
going back and.

Speaker 1 (35:36):
Forth endless analysis paralysis. And I think that's probably the
case for a lot of people, and they're like, well,
there's a hundred differ people telling me one hundred different things.
How do I know which one I should believe? And
sometimes the thing is just to get started and then
you can learn as you go. But part of the
part of the deal is you got to like get
the first domino off, make.

Speaker 2 (35:54):
The daying decision. Yeah, And I think a big part
of that too, Dan, I mean, correct me if I'm
wrong here, is not just making that decision, but then
sticking with the decision. And I think that's where maybe
a part of where that faith come comes into play too,
because by receiving new data, like, yes, you need to
absorb that information and take that into account, but it
doesn't necessarily mean that you're going to immediately be reactive
to the market because you've got a game plan, you've

(36:15):
got an investment strategy, and there's.

Speaker 3 (36:16):
No strategy that never underperforms no matter what is. You
have to be willing to sit there and say it
isn't working right now, but I think it will work
out in the long run. There's no strategy that has
a perfect track work, so you have to have faith
through in those tough periods.

Speaker 2 (36:30):
That makes sense. So in addition to kind of having
that game plan, that strategy that faith talk to me about,
I guess expectations of what we should expect from the
market because like a lot of folks out there preach
an average of eleven to twelve percent when it comes
to returns, even what we've seen recently, right like you
look at last year, you look at this year. It's
been great for investors. But how do our expectations for

(36:53):
our investment returns impact our decision making and how it
is that we react or hopefully don't react to the market.

Speaker 3 (37:02):
So a couple of different points. One is that it's
always nicer to be surprised to the upside than the downside.
So when we go through sort of financial planning, how
much return should you expect from the market, or maybe
how much return should you plan on from the market.
Don't go with the most optimistic figure. Don't go with

(37:23):
ten percent. Say I'm going to plan on five percent.
And one of the nice things about this is that
you know if you set that out and say I
expect a five percent growth over this many years, as
time goes on, you'll know half of it. Right, You'll
know like half of the way through your investment. Okay,
actually I averaged out about nine percent returns. I'm ahead

(37:43):
of where I thought I would be. This is great.
I can take on a little bit less risk because
I'm ahead of the game, or de vice versa. But
number one is don't focus on or try for requiring
a high expected return because that puts you into a
very fragile position, not just from a planning point of view,
but also from a I don't know, like a take

(38:06):
being being able to be taken advantage of point of view.
There's a great story by Barry Rittolets from when he
was a young advisor where he was, you know, he
had a prospective client who was chatting with him, and
the client was like, so, what are your expected returns?
And Barry was like, what like for the S and

(38:26):
P five hundred and then guy was like, yeah, yeah, yeah,
what are your expected returns? And Barry was like, I
don't know, man, like nine percent, And the the client
was like, well, this other guy I'm talking to you,
he says he thinks twelve percent. And Barry was like,
what are we talking about here, Like, what like are
we talking about who's more optimistic about the economy or
is he saying that he's going to like beat my

(38:48):
portfolio by three percent? But because the other advisor gave
this sort of like strength, like just more optimistic figure
about what's going to happen, the client went with them
and they probably were disappointed when that didn't meet materialize.
So a good way to think about it, I think
is just like keep your expectations low so that it's
easy for them to be outperformed, and as that outperformance happens,

(39:10):
you'll be closer to your goal, you'll be closer to
retirement or whatever it is. It gives you more optionality
later in life to pivot and change and use the
extra money that you probably hopefully have gotten for other
things and not be in the position of saying like,
oh no, those twelve percent returns didn't materialize. I'm in
a bad place, all.

Speaker 2 (39:26):
Right, Well, steal man the argument for me, Dan, because like,
when you do look at the like the last ten
years of the S and P specifically, you're looking at
something like over twelve percent nine something, I guess when
you account for inflation. But what are the dangers then,
two folks who might be thinking that, like, hey, I'm
only going to see five percent, I could see a
downside to that.

Speaker 3 (39:46):
And I think what's the downside? It's that they save
more as a percentage now than they would have needed
tom And it's.

Speaker 1 (39:53):
Not the worst downside but the worst outside.

Speaker 2 (39:54):
But I guess you know, life is both trade offs, yeah, right,
And so when it comes to individuals, especially maybe folks
who are listening to the show, and they're the ones
out there who are really getting after it, and man,
that is awesome. We love hearing that, We love hearing
all the wins that folks are in, all the progress
that folks are making. But there's a certain amount of
life that you're giving up if you are thinking, okay, man,
i've got to see you know, a saving rate of

(40:17):
x amount in order to retire by age whatever, when
maybe there might be an ability to take your foot
off the gas a little bit, maybe do a little
bit of coasting.

Speaker 3 (40:24):
I think the good thing there is to do that
coasting when you know that you can, rather than you
hope that you can. So there's a very there's a
big difference between saying I am in a position where
I know, even if market's returned three percent, I'd be
fine because you've you've got to like you. There's such
a neat thing do you guys talk about lifestyle creep

(40:47):
at all?

Speaker 2 (40:48):
Oh?

Speaker 3 (40:48):
Yeah, okay, So there's such a neat thing about like
the triple powered impact of making sure that you save
more as your earnings grow in terms of keeping your
lifestyle small, which means you have to bankroll less lifestyle
in retirement. That just gives you this freedom, this optionality
later to say I can always increase my spending later

(41:08):
when I know I'm good, rather than now when I
hope I'm good. And I think that's the difference is
if you are saying I am counting on I am
depending on a high rate of return to make the
decision I am making today, make sense, you are putting
yourself in a position where you can end up in
a bad spot if it doesn't materialize, if this return

(41:30):
doesn't turn out that way. And you know, for most
of us that we're talking about is either like is
it ten percent or is it six percent? In the
most extreme cases, there are people who, you know, the
investment that they made was only going to make sense
that they could guarantee you twelve percent return, and you know,
they bought a house and we're trying to airbnb it
and that didn't materialize, and then they took a humongous

(41:52):
loss because they had to sell the house in foreclosure,
they couldn't afford it anymore, et cetera. One of the
big parts of pain a lot of the times is
when you have to deleverage, when you have to let
go of something that was a highly leveraged investment in
one way or the other because the returns didn't materialize,
And that's very, very painful. So again, it's it's giving
yourself breathing room and free optionality. You can always live

(42:15):
richer later if you kind of like had low expectations,
but it's very hard to recover if you had high
expectations that didn't materialize.

Speaker 1 (42:23):
I like that. I like the way you said that,
and I think you're right, And I think you might
be trying to talk yourself into being able to invest
less of your income if you're saying, oh, I'm going
to get fourteen percent returns and so I can only
invest seven or eight percent of my income and I'll
be just fine. But then you might be, yeah, setting
yourself up for failure. All right, Dan, We've got a
few more questions we want to get to with you,

(42:45):
including like do robo advisors eliminate the need for real
life advisors? We'll get to that and more right after this.

Speaker 2 (43:00):
We are back from the break talking about how you
can fix your broken financial behavior that that bad behavior
with Dan Egan and Dan, like Joel alluded to before
the break, let's talk about robo advising because I think
you're probably a bit biased. You've worked at better men.

Speaker 1 (43:19):
That's a behavior of flaw that Dan Egan has. That's
that's true that I'm assuming.

Speaker 2 (43:22):
How is this going to impact his response to this
question I'm about to ask him? But for over a
decade you've been doing this, but like, do you see
robo advisors as a solution That just completely eliminates the
need for more of a one on one relationship with
a financial advisor.

Speaker 3 (43:36):
No, absolutely not. I think they're wonderfully complimentary. That's that's
kind of like being like, do I not need an
accountant if I have Microsoft Excel? Most of us a
lot of us, And I think this is one of Also,
it's one of the tough things for humans in general
to grasp, is like when a new service or product
comes on, it creates a market that didn't previously exist.
It doesn't necessarily take away from existing ones. So I

(43:59):
think most of the growth in robo advisors has been
from people who were either not investing at all because
it was too intimidating or they weren't sure how to
do it, or DIY investors who are like, okay, you know,
time to go to the chores. It's Friday. I'm going
to go in and rebounce my portfolio. Got to get
it done. I don't think many many people kind of
like left their advisor because of robo advisors. I think

(44:21):
it just served a new space, but also betterment offers
our platform for advisors, and that's one of our largest
growth areas is advisors who you know, we're like the
more updated, powerful Microsoft exell for managing their clients' finances.
They say, why would I ever want to spend time
rebalancing or tax loss tarvesting or asset locating or putting

(44:44):
together goals and saving plans myself when I could offload
all that stuff onto a robo advisor And that means
I get to more spend more time talking with my
clients and you know, going for hikes with them, playing
golf with them, whatever is meaningful, talking to them about
like the really big prioritizations have to make in their lives.
So this is a very common model of kind of

(45:05):
like what happens when some better technology comes onto the scene.
What it does is it pushes the existing service providers
up the value chain so that they can do more
at a higher level with a more human overtone. And
I think that's really what's happened here.

Speaker 1 (45:19):
So basically robo advisors similar to ATMs, Like, they didn't
lose a lot of jobs, They just changed the jobs
at the bank that people were doing, yep. And that
was the fear right when ATMs came about, was like,
who's We're not gonna need banks anymore. People are just
gonna go to this robot and not true.

Speaker 2 (45:34):
And what do you think the future of behavioral finance
looks like? And I guess not even just behavioral finance,
because in the end, I mean, behavioral finance is interesting,
but what's most interesting, I think to individuals is how
that impacts their own personal finances. And so do you
think through behavioral finance and some of the insights and
studies and apps that that y'all are able to implement,

(45:55):
that it's possible to account for and not only account for,
but even eliminate all of the just all of the
mistakes that we tend to make as investors.

Speaker 3 (46:03):
I think the biggest issue with it right now is
figuring out the business models to allow those sorts of
things to be sustainable. So it is very hard to
sustainably tell people that they should trade less a they
don't want to pay you for that advice, and somebody
who's in a trading model doesn't want you to give
that advice either. Where I think there's some really nice

(46:24):
possibilities is that more and more we're coming up with,
I don't know what to call it, like protocols or
systems where the incentives are better aligned to allow people
to do that. So if you think about how open
source software works. Sorry, this is a very nerdy side case,
but like they aren't necessarily paid, it's not necessarily business model,
but there's a lot of kudos involved with it and
pride in like writing a package and you can add

(46:45):
to other packages over time in a way that it's
like an open source project that people can contribute to.
I have contributed to open source projects where I'm like, hey,
here's a behavioral angle on this that I think could
help and I want to add to it, and it
maintains itself because it's they're really interesting things. I actually
think Crypto had some of this, where you know, here's
the open blockchain. I'm not an expert in the stuff,

(47:07):
but here's the open blockchain. Anybody can go in and
analyze your trading records for your wallet and tell you
when you've done well and when you've done poorly. The
same thing is true if there's new like at protocols
that things like blue Sky run on. So I think
it's been historically very hard to have really good aligned
business models that serve a behavioral oversight function because people

(47:30):
don't kind of understand how to pay for it. One
of the few outstanding cases is dual lingo, which is
very behaviorally informed in getting you to come back and
keep your streak up and continue to learn the language.
But there are very few of them where we pay
people to tell us like how to behave better. On
the other hand, something where you can set up and
work off of, like publicly available data, or something that

(47:52):
doesn't require money changing hands quite so often. I think
I have a lot of hope that there's more work
that we can do there to help people.

Speaker 1 (47:58):
All right, final question, would you suggest to our listeners
who maybe they're like, Okay, cool, I'm not expecting an
algorithm or some sort of new technical feature to help
me in my pursuit of being better at my finances.
What are maybe just kind of some normal, run of
the mill things that people can basically funnel into their

(48:20):
daily lives to improve how they're handling money, aside from
the work that you do you're doing, and aside from
the work that's being done in the payproal finance space.

Speaker 3 (48:28):
The base one is a budget, and I am a
big believer in what I would consider sort of pay
yourself first or a top down budget. I want to
minimize how much regret and how much how many decisions
somebody has to make, how much self control they have
to have over the course of a month. And the
way that I find it's easy to set that up,
you know, like you sit down and you're like, okay,

(48:50):
you know roughly, how much do I get paid every month?
What are my required outgoings? How much is leftover? I
want to save this much of it and whatever is
leftover after that, after I pay myself first, I can
spend how I want. Do not sweat the coffees, Do
not sweat the movie tickets. Do not look and micromanage
the individual things of your budget, because all that matters
is that you have been saving ahead of time, so

(49:12):
you can spend how much you want on whatever you want.
And I think that that sort of setting up a
budget and saving however much you can from it a
starts to build up some really nice muscle around like Okay,
I've got a budget, I've got inflows, outflows, I know
what they're going to look like. It allows you to
build further into Okay, what are the other things that
I want to save for in the future, and how
do I trade them off? Against what I'm consuming now,

(49:34):
So I actually I think a lot of it starts
with some kind of process system, basically a budget that
makes it easy for you to spend and save intentionally.

Speaker 1 (49:46):
Very cool.

Speaker 2 (49:47):
Yeah, start with those rocks, then all that other sand
will fit.

Speaker 1 (49:51):
Dan.

Speaker 2 (49:52):
Obviously, folks can head over to Betterments. But is there
like a specific page or a new tool that y'all
are excited that about brings online soon for our listeners
to check out.

Speaker 3 (50:02):
Definitely if you want to come check out Betterment, my
work is kind of like suffuse throughout it, and I
have quite a few of our blog articles that you
can read. You can also come to my personal site,
which is Dpegan dot com and I've started to spend
some time on blue Sky with my handle is that
Dpegan dot com. So come there and heckle me and
say I need a voice coach.

Speaker 1 (50:25):
Awesome, Dan, thanks so much for joining us today. We
really appreciate it.

Speaker 3 (50:28):
Thank you very much.

Speaker 2 (50:29):
I loved it all right, Joel fun conversation with Dan
Egans for sure. I think we knew that we would
like him, but I ended up liking him so much more.
It's always a nice surprise when you feel like, truly
you could sit down. We kind of were making plans
to get beers after we hit after we hit stop
Recording's got to get plane tickets, go to New York,
I know, or vice versa the next time he comes
down to Atlanta. But do you have a big takeaway

(50:51):
from our conversation with Dan Egan of betterment to know?

Speaker 1 (50:55):
So much good stuff in here. But I love when
he said, you know, we have to admit that we're
and we have to kind of let go of some
of the ego. I think humility is a big part
of what it takes to be successful with money, realizing
that there are varied outcomes and that we don't control
all of the end results, and we can control to
a certain extent the input, but don't have the full
picture of where things are going to end up. And

(51:17):
I think actually sometimes we undersell our abilities of where
things could go, at least I think I did.

Speaker 2 (51:22):
Early on.

Speaker 1 (51:22):
I was like, well, I'll never get here or I'll
never get there. I can't imagine I'll ever get to
this point in life. And it's amazing how much just
doing the right thing over an extended period of time
will take you in that direction. Into a positive trajectory
with your money, but just emitting some clause, letting go
of the ego, staying humble. I think it's going to
allow us to have a more of a healthy disassociation

(51:43):
from the final outcome. And I think it's going to
allow us to do the right thing, even though we
might not have one hundred percent conviction. We have to
exercise some of that faith he talked about, too sure.

Speaker 2 (51:51):
Yeah, recognizing that you've got a problem or maybe that
you aren't making the best decisions.

Speaker 1 (51:55):
That's the first step.

Speaker 2 (51:56):
But I don't know what my big takeaway is from this.
But when he was talking about we're talking about coasting
and having enough, and I was kind of pushing back
on the five percent number that he threw out there
and something he says, so he said, there's a difference
between knowing that you can coast versus hoping that you
can coast. And he's talking about having breathing room. He's
talking about optionality, which is man, he's like speaking our

(52:16):
language like and that's maybe that's why it was fun
to talk with him, But like there is a difference
though between like, Okay, what does it mean to say
I know that I can coast. What does that mean? Well,
it means that you don't have to take any risk. Okay,
well what does that look like? It means having enough
in the bank to say, well, I don't have to invest. Actually,
I can just count on what the bank's going to
give me. Well a the rate that banks are paying.
It's varying, as you know, and what we've seen lately

(52:39):
is that is going down. But even still, I don't
think anybody would make the recommendation that you should have
all of your bank all of your money in the
bank earning interest from what the banks are paying, as
opposed to actually putting it at risk. And so I
guess what I'm saying is that, And I'm still processing
and chewing on what he said. But it's not quite
as binary as knowing that you can and hoping that
you can. There's there's a spec there's a it's a

(53:01):
dimmer switch in between, and you have to figure out
where along that continuum that you, as an individual feel
comfortable taking on the risk associated with that. So it's
good food food for thought for me, but hopefully for
all the listeners out there that maybe think about where
along that continuum they are as well.

Speaker 1 (53:17):
Yeah, no, I think that's a really good point. And
I think even you've already talking about something like Coast Fire,
where somebody has invested enough early on in their life
where hey, I don't have to invest in other diamond
I'm I'm pretty sure I'm gonna have enough money in retirement.
Well typically they're pretty sure, right, they can't be certain
because they still have decades left to go of the
growth to prove out in that account. So we're we're

(53:39):
all doing the best we can with the information we
have on with.

Speaker 2 (53:42):
The limited amount of information on hand, because we don't
know the future. Like that's the other thing, Like you
might have more than enough, but then what if something
comes up that completely derails your finances and all of
a sudden, Yeah, I don't want to go into like
worst case scenarios, but like they're out there. What about
best case scenario? You're like, man, I could have saved
lesson those earlyiers, and it's like, yeah, well you can't take.

Speaker 1 (53:59):
That back either.

Speaker 2 (54:00):
All right, real quick, let's mention Dale's American pale Ale.
What a classic. If you had a guess, when was
the first time you had a Dale's Oh my gosh,
back in the day.

Speaker 1 (54:08):
Definitely one of the first craft beers I ever had
from the good folks over at Oscar Blues, and they
forget where they're they're originally out of Colorado, and then
they have a second facility in North Carolina and Brevard.

Speaker 2 (54:19):
I think that sounds fraz because I'm not. Actually, I
don't think they were one of the ones that's actually
in Asheville, but they're like, I think they're out there
in Bravard, which.

Speaker 1 (54:26):
I love Brevard, but I haven't actually been to God's
Conjury to date to the Oscar Blues facility. But the
Dale's palel is in my mind. It's it's darker than
I remember it. It's multier vibes.

Speaker 3 (54:37):
Yeah, when we're.

Speaker 2 (54:37):
Ported, I was like, that doesn't look like a pale,
almost like a light brown. Looks like a yeah, or
at least an amber. Yeah, dude, this is in Longmont
or at least this that's where the specific camp came from.

Speaker 1 (54:46):
I'm not sure.

Speaker 2 (54:47):
I feel like I would have stuck in my mind
because that's where mister money Mustache and all of our
friends live.

Speaker 1 (54:50):
That's right, long Mont, Colorado. I know, Well, yeah, that's random,
but yeah, I mean to me. This is like an
old school pale al but it still holds up. It's
it's still tasty, even though maybe it's not as overly
hopped as a lot of the modern ones. Yeah, super solid.

Speaker 2 (55:04):
It's good American drinking. I highly recommend it. But that's
gonna be it for this episode. You can find our
show notes up on the website at howtomoney dot com.
We'll also link to a couple of the studies or
maybe some of the articles that Dan has written. If
you are I don't know, if there's a few things
that we discussed that stood out to you, you can dive.

Speaker 1 (55:22):
Deeper, put on your bifocals, and get in those white papers.
That's gonna do it, Matt for this episode. Yes, until
next time, best friends, I'm best friends Out

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Joel Larsgaard

Matthew Altmix

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Fixing Your Broken Financial Behavior w/ Dan Egan #911