#224 – Decoding Market Psychology with Dr. Daniel Crosby

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Investing for the future can be daunting. And while many of us assume the key is mastering the market’s financial aspects, a persuasive argument says the behavioral side is perhaps even more critical. How we think about money can significantly impact our journey to financial freedom in retirement. But where exactly is that intersection of mind and markets?

Dr. Daniel Crosby is the Chief Behavioral Officer at Orion Advisor Solutions and a leading voice in decoding market psychology. His books always seem to hit the NY Times Bestseller list or win some kind of investment award, but the truth is that his PhD isn’t in finance or economics but rather in Clinical Psychology.

By applying his research and analysis to everything from financial product design to security selection, he helps others grasp economic behaviorism so they can reap the long-term benefits of making healthy, self-aware decisions.

Read The Full Transcript From This Episode

(click below to expand and read the full interview)

  • Wes Moss [00:00:03]:
    I’m Wes Moss. The prevailing thought in America is that you’ll never have enough money, and it’s almost impossible to retire early. Actually, I think the opposite is true. For more than 20 years, I’ve been researching, studying, and advising american families, including those who started late, on how to retire sooner and happier. So my mission with the retire sooner podcast is to help a million people retire earlier while enjoying the adventure along the way. Feel free to be one of them. Let’s get started. Daniel Crosby here on the retire Sooner podcast.Wes Moss [00:00:38]:
    Doctor Daniel Crosby. How many years? We met probably a decade ago, and I think it was around the laws of wealth, which was not your first book. What was your book before laws of wealth?

    Daniel Crosby [00:00:51]:
    Before that, I co authored a book called Personal Benchmark with Chuck Widger, the founder of Bringer Capital. So, yeah, the laws of wealth was my first solo book. I see it right here, and I’m thrilled.

    Wes Moss [00:01:01]:
    That’s true. We have all of our favorite books.

    Daniel Crosby [00:01:03]:
    Here in studio, front and center. I love it.

    Wes Moss [00:01:06]:
    Okay, so it was personal benchmark, and then it was. That was New York Times bestseller, and then it was laws of wealth. It’s probably around when we met.

    Daniel Crosby [00:01:13]:
    Yep. Laws of wealth is when we met.

    Wes Moss [00:01:15]:
    That was back in 2017. And in several of these books, that was best. Investment book of the year by axiom business. And then. And then you had another book that was best.

    Daniel Crosby [00:01:26]:
    The behavioral investor won the same award. Yeah.

    Wes Moss [00:01:30]:
    So what’s your journey on these? Is it a year and a half to two per book?

    Daniel Crosby [00:01:37]:
    How long does it take me to write them? Yeah. So it’s funny, I get asked this all the time, and really it’s about having the idea is the hardest part sometimes, because when.

    Wes Moss [00:01:47]:
    100% agree.

    Daniel Crosby [00:01:48]:
    Yeah. Cause, I mean, it’s been five or six years since I’ve written a book, and it’s a, you know, once I sat down to write it, it didn’t take me so, so long, you know, six or nine months. But it took me years and years to have something to say. Maybe that doesn’t speak well of me, but I think, you know, you have to be filling your mind, you have to be filling your cup that whole time, encountering new ideas, new research, new research, new perspectives, or else you just don’t have anything compelling to say.

    Wes Moss [00:02:18]:
    Yeah. It’s just, I know that feeling. It is. It’s almost as though the, once the epiphany hits and, you know, this is going to be, this is an idea worth writing about spending the next year. And that’s really the magical moment. But until you get to that point, it’s pretty tough. And I know some authors are constantly prodded to say, hey, well, when’s your next book? When’s your next book? You’ve got to have your next idea before you do it. But your work, though, is so important for the.

    Wes Moss [00:02:48]:
    I think that there’s been more and more understanding over the last decade, and you’re part of this movement that investing, as complicated as it is, I think we know now that the behavioral side of it is perhaps the more important side than the dollars and the cents and the numbers and the analytics. They’re both obviously a big part of the equation. But how we control and we think about money has a dramatic impact on our journey to be able to have financial freedom and retirement, and we cover that here on the retire sooner podcast. So you are certainly here in the southeast and maybe nationally, really kind of the front runner on behavioral finance and the psychology behind it for our listeners. What did you study on the psychology side? And did it have anything to do with money back then when you were in school, or did you merge that later?

    Daniel Crosby [00:03:43]:
    Yeah, it had nothing to do with money. So I have a PhD in clinical psychology. So I went to school to be a shrink. I mean, I went to school. I went to school to be a clinical psychologist, to be a therapist. And about three years into my doctoral program, I just burned out. Candidly, I just, I was 23 years old when I started my doctoral program. A fine time to be giving life advice, I think, to other people.

    Daniel Crosby [00:04:12]:
    And I just had poor boundaries. I was taking my work home 40 to 50 hours a week of talking to people who are having the worst week of their lives, and I just couldn’t do it.

    Wes Moss [00:04:22]:
    So when it came to becoming a therapist or a clinical therapist, sitting down with folks, you were like, wait a minute, there’s no way I can’t deal with this for the next 30 years of my life.

    Daniel Crosby [00:04:33]:
    That’s correct. And so I went to my dad when I was 26, 27, and I said, look, I love psychology. I love psychology and I even love my PhD program, but I don’t think I can do this in a medical setting. I can’t do this in a clinical setting. Let’s look for some business applications of this. And my dad, who was and is a financial advisor, said, hey, well, there’s a ton of psychology in my work.

    Wes Moss [00:05:01]:
    And this is what, 20? You go back like late nineties.

    Daniel Crosby [00:05:03]:
    This is 20 years ago? Yeah, yeah, this is 20. Oh, no, it would have been like 2006 or 2004. Something like that. But, yeah. So my dad, an advisor in north Alabama who doesn’t know the word behavioral finance, right, says, hey, there’s a ton of psychology in my work. And that comment put me on a path to explore what are the psychological applications to the world of investing. And it was, you know, it was at a time when, when people like Kahneman and Tversky were writing and publishing and getting recognized for their work, but it hadn’t trickled down like it.

    Wes Moss [00:05:39]:
    What was it? So when you’re talking about Daniel Kahneman, what was, for our listeners, what was the work there that started at the snowball around.

    Daniel Crosby [00:05:46]:
    Yeah. So Kahneman and Tversky pioneered this idea of prospect theory, which, in simple terms, is this idea that we have asymmetrical risk and reward preferences. We’re a lot more upset about losing $100 than we are gaining $100. Right.

    Wes Moss [00:06:01]:
    Yeah. Two times, three times.

    Daniel Crosby [00:06:02]:
    Yeah. Two and a half times as upset.

    Wes Moss [00:06:05]:
    About pain of loss is two and a half times the good feeling of gain.

    Daniel Crosby [00:06:09]:
    That’s right. That’s exactly right. And, you know, standard economics had always modeled people out as being perfectly rational and utility maximizing, like, people would always do what’s in their best interest. Well, any psychologist knows that’s not true. And so we see that with money, too. People make profoundly stupid choices with their money, and they were starting to apply these things to the world of economics and the world of finance. But it hadn’t trickled down to folks like my dad, who are, you know.

    Wes Moss [00:06:40]:
    Like, who was a long term advisor. Was it big firm?

    Daniel Crosby [00:06:43]:
    Yeah, big firm. Wire house advisor. Big firm. Big bank firm. And it hadn’t trickled down to folks in Alabama doing the work every day in the trenches with clients. Yeah. So that’s the gap that I’ve tried to bridge in my career.

    Wes Moss [00:06:56]:
    And then your first book, though, was when?

    Daniel Crosby [00:06:59]:
    2013, maybe.

    Wes Moss [00:07:01]:
    So you started doing research around this, then you published it, and then that has set you on this journey. And now we see you speaking at any big financial conference. Somebody’s trying to pull you in as a keynote or. And what you’re speaking. Athenae, futureproof.

    Daniel Crosby [00:07:17]:
    I am speaking at future proof. Yeah.

    Wes Moss [00:07:19]:
    Which is the. And again, that’s coming. I don’t know whether when people are listening to this podcast or not, but that’s a 4000 person financial conference in Huntington beach in California.

    Daniel Crosby [00:07:30]:
    Yeah. 4000 advisors. Yeah.

    Wes Moss [00:07:31]:
    So your latest book, soul of wealth, it’s funny. I’ve got this. I was writing questions as I was reading this. I was doing it on my iPhone, so I had emojis right there. So I have a lot of these questions I have that have smiley faces next to them because I was doing this on my iPhone in my notes app so I could have emojis. And I’ve got some laugh. I love this. Money kinda sorta buys happiness sometimes.

    Daniel Crosby [00:07:56]:
    Yep.

    Wes Moss [00:07:57]:
    The Joneses aren’t that happy. The Joneses aren’t even that happy. Well, if they’re not happy. So how I would describe this book, it’s really a collection of essays, which is a cool way to do it. So it’s 50 essays, 50 reflections on money and meaning. The soul of wealth is the book. And to me, this was not a book that I just went from front to back. I kept finding topics within the content saying, oh, wait, I’m going to skip to that.

    Wes Moss [00:08:25]:
    I’m going to go to. You might be solving the wrong problem. Wait a minute, I’m starting there. I went to page 34, and then I kind of jumped around and went through all of these different essays. And I want to try to bring that out today to help our listeners on what I think maybe be the most helpful.

    Daniel Crosby [00:08:42]:
    Yeah.

    Wes Moss [00:08:43]:
    As the introduction to this, maybe quickly tell the story around the man who ended up sitting on a pile of pearls. And that’s the other thing I love about the book, is that behavioral finance a is oftentimes more interesting than just a book about numbers. So that in itself is interesting. And then the stories you bring to it, like the Alexander the Great story, which I’m going to ask you about, the man sitting atop pearls, is kind of the crux of why we need to have. Money’s obviously just not enough. So tell our listeners what the man on the pearl story.

    Daniel Crosby [00:09:18]:
    Yeah, so it’s actually from a story within a story. In the kite Runner, it was the.

    Wes Moss [00:09:24]:
    Kite Runner, which, by the way, I’ve never read or I never watched the movie, but. Yeah, yeah, yeah.

    Daniel Crosby [00:09:28]:
    So it’s a story within the story, and it’s talking about a man. I believe it was a magical chalice, the myth of this man. And it was like this cup would turn tears into pearls. Right? And so this man comes in possession of this chalice that will turn tears into pearls. But his life is good. Right? So he’s a happy guy. He’s a happy guy. Like, he doesn’t cry much.

    Daniel Crosby [00:09:51]:
    And so it’s kind of all for naught. And so we fast forward and, like, here he is. And he’s, like, killed his wife, basically. And he’s sitting on this mound of.

    Wes Moss [00:10:01]:
    Pearls because so he gets so he gets a tear.

    Daniel Crosby [00:10:04]:
    Yeah.

    Wes Moss [00:10:04]:
    And it turns into a pearl. And he said, wait a minute, I’m gonna try to make myself less happy. Another tier, another pearl. And then he almost gets addicted to the money side of it, and he’s trying to make himself upset.

    Daniel Crosby [00:10:18]:
    You broke it down perfectly, right? Like, his life is too good. So he starts bringing heaping pain upon himself to get these riches. And when I read it, I just thought of all the ways that I’ve done. Less dramatically, of course, like, done the very same thing where I have brought all this pain and things that I didn’t want into my life in the pursuit of greater wealth. And that’s in the introduction, because that’s what the book is all about. It’s about money and meaning and about what is true wealth, what is holistic wealth, and how can we get it without a chalice full of tears?

    Wes Moss [00:10:54]:
    Well, all right, so then, which leads me to wealth is not about the numbers. And this is the other thing I love about this topic, is that we always struggle, I guess, just humans in general, is that we want to work hard, we want economic freedom, we want to accumulate wealth and freedom from the wealth, but there’s always this tug of war on the price of that. I don’t know if that’s ever really solvable. But the reason I like the topic is that if we can be aware of it, then we can maybe keep ourselves from too much of an extreme one. Extreme is, hey, I want to totally enjoy my life. I don’t want to ever do anything, and then I end up with no money, and that’s not good. But on the other side, I also don’t want to pursue wealth. So much so that it ruins the rest of the world.

    Wes Moss [00:11:41]:
    Which leads us to Alexander the Great. So tell us about that story.

    Daniel Crosby [00:11:45]:
    Yeah, so Alexander the Great is, by most measures, the second richest person to ever have walked the earth. Right? Like, only Genghis Khan has him beat. Genghis Khan also fathered, like, half the earth, right? So he was. He was. He was really a go getter. But, you know, Alexander the Great, second richest person ever, if you take the ten richest people today and put them together, he was vastly richer than them by even the most conservative estimates. So, you know, Zuck, Buffett, bezos, all these guys stack them together, he’s, you know, ten times richer.

    Wes Moss [00:12:19]:
    So he was. He was a multi trillionaire on a relative basis.

    Daniel Crosby [00:12:22]:
    Yeah. I mean, more money than God. A gazillionaire, like, couldn’t ever spend it.

    Wes Moss [00:12:26]:
    Literally, a gazillionaire yeah.

    Daniel Crosby [00:12:28]:
    A gazillionaire is the scientific term, right? So he’s one of the richest people to ever live. He has all the power you could ever want. I mean, he goes, I believe it’s 14 or 15 years without ever losing a battle. You know, he. He owns half the world, right? This guy is as accomplished in sort of the traditional sense as anyone who has ever walked the face of the earth, and he is completely undone. When his best friend dies, that is the beginning of the end for him. He unravels his life, falls apart, and he eventually dies. Stops taking care of his body, stops taking care of himself, because his best friend dies.

    Daniel Crosby [00:13:12]:
    And I think so many of us, right, we spend all this time and effort trying to accumulate, and then life is what gets us. And indeed, his friend died in one of his battles, right? I mean, he was yet another prize.

    Wes Moss [00:13:30]:
    He wanted to conquer.

    Daniel Crosby [00:13:31]:
    That’s right.

    Wes Moss [00:13:31]:
    Other island or some city that he just had his eye on.

    Daniel Crosby [00:13:34]:
    That’s exactly right. And he enlisted his friend in this. He lost his friend, and then he.

    Wes Moss [00:13:38]:
    Lost his life, really, which brings us to regrets. And you talk a little bit about how the regrets we have as humans upon our death are typically what.

    Daniel Crosby [00:13:51]:
    Yeah. So a woman named Bronnie Ware, who’s a palliative care nurse, has done this fascinating research on the top five regrets of the dying. And I talk about in the book, right? Like, think about how you spend your life. Like, what percentage of your time is spent trying to accumulate wealth, gain some sort of financial security. Like, I mean, it’s a pretty big.

    Wes Moss [00:14:13]:
    Pretty big percentage.

    Daniel Crosby [00:14:14]:
    It’s a big number, right? Like, it’s. It’s a big number. And then at the. At the time of death, she interviews all these people who are about to pass, and she has these top five regrets. And work only comes up once. And the way that it comes up is, I wish I had not worked so much.

    Wes Moss [00:14:31]:
    So much, right?

    Daniel Crosby [00:14:32]:
    And so, like, work scarcely enters the equation at all, and when it does, it’s negatively. And so, you know, the. The shrink term for this is an existential boundary experience, right? When we. We all know cognitively that we’re gonna die. But then you have moments when you lose someone in your life or when you have a. A brush with death yourself or something, where you go, oh, like, now I. Like, no, no. That I’m going to die.

    Daniel Crosby [00:15:01]:
    And everything gets a little different. I had one of my best friends in the world last week. He calls me and he goes, I got some good news, and I got some bad news. For you. And I’m like, okay. And he goes, good news. I’m about to sell my company for $61 million. Guy a couple years older than me, right? $61 million.

    Daniel Crosby [00:15:21]:
    And I’m like, bro, incredible. Like, you’re set. You did it. You won. And he goes, second piece of news. I have cancer. And that’s. That is life, right?

    Wes Moss [00:15:31]:
    That is.

    Daniel Crosby [00:15:32]:
    And now, you know, I I’m praying every day that he’s gonna make it, but, you know, if and when he pulls through, he’s gonna have this new perspective, right? And he’s gonna spend that money very differently because of what he went through. Through and that close shave, right. I mean, he will spend it very differently. Before we were talking, we’re both big watch guys, and he’s like. We’re talking about what watches he’s gonna buy, and now he’s like, I’m gonna help a lot of people, right?

    Wes Moss [00:16:03]:
    Totally different. Totally different.

    Daniel Crosby [00:16:04]:
    Totally different.

    Wes Moss [00:16:05]:
    So the idea, and that’s called an existential boundary.

    Daniel Crosby [00:16:09]:
    Boundary experience is what?

    Wes Moss [00:16:11]:
    Like that we all have, whether it’s us, our loved one, a friend. It’s a smack in the face.

    Daniel Crosby [00:16:18]:
    Yeah. You almost get in a car wreck, and you go home and you hug your kids a little tighter. Right. You know, you get a scare at the doctor, and the biopsy comes back negative. And you. I mean, you live your life a little differently, but it’s hard to hold on to those. So I think there’s a lot we can learn from people who’ve gone before.

    Wes Moss [00:16:35]:
    And you also talk about how work. You know, we have this motivation to be able to not have to work, but you also. Because the majority of people in America don’t love work.

    Daniel Crosby [00:16:46]:
    Right?

    Wes Moss [00:16:46]:
    Isn’t that as well documented? It’s like, what, two thirds of people really don’t like what they’re doing.

    Daniel Crosby [00:16:51]:
    Yeah.

    Wes Moss [00:16:52]:
    So we generally don’t like work. However, it’s got this major benefit. Right? It’s the socialization, the engagement, it’s the purpose. It’s all of these things. So we’re. I guess, to your point earlier, it’s one of these cognitive. I don’t know if you would call it cognitive disconnect. It’s like we’re trying to run away from something that really does.

    Wes Moss [00:17:12]:
    It’s so beneficial for so many ways.

    Daniel Crosby [00:17:14]:
    Yeah. So a great framework with which to kind of break this down is developed by Doctor Martin Seligman, the father of positive psychology.

    Wes Moss [00:17:22]:
    The perma.

    Daniel Crosby [00:17:23]:
    Perma model. Exactly.

    Wes Moss [00:17:24]:
    Tell us about that.

    Daniel Crosby [00:17:25]:
    Yeah, so the perma model is this five part model. It’s basically the formula for human flourishing, right? And so the P in perma is positive experiences. This is going to Disney, going to watch a movie, eating ice cream. Like what? It’s just doing fun stuff. It’s like fun and leisure. And when we think about retirement, that’s what we think about. We think of the P. The p is the positive experiences.

    Daniel Crosby [00:17:47]:
    And we deeply, like, over index on the P and perma. The e is engagement, which is deep, meaningful work. The r is relationships. Right. Like being tight with. Being tight with friends and family. Well, work gives you a lot of that. As it turns out, the m is for meaning, working for something bigger than yourself.

    Daniel Crosby [00:18:08]:
    It could be religion, spirituality. It could also be being part of a team at work and, you know, trying to accomplish some mission objective at work. And the a is for advancement, getting better to, you know, being better today than we were yesterday. Growth, like personal growth. Well, to your point, work is good.

    Wes Moss [00:18:29]:
    For four of the five.

    Daniel Crosby [00:18:30]:
    Yeah. Right.

    Wes Moss [00:18:31]:
    So if I draw a pie chart again, according to Seligmande. Yeah. The balance of life is those five things. And so it’s positive emotion, engagement, relationships, meaning, accomplishment or advancement, advancement. And to have a well balanced life, we want to have all five of those lighting up at any given time.

    Daniel Crosby [00:18:52]:
    They’ll even have you draw it out like spokes on a wheel and kind of go think about five sort of spokes radiating from a center. And they would say one to ten, how are you doing to. And sort of visually, the wheel rolls funny if they’re not all at the same place. Right. So think about your life kind of one to ten. Those. So, yeah, you need all five in.

    Wes Moss [00:19:15]:
    And work is four to the five.

    Daniel Crosby [00:19:16]:
    And work’s four of the five. And we’re constantly running from this thing that kind of serves us very well.

    Wes Moss [00:19:23]:
    So tell us about the studies that talk about the impact of our well being on us creating wealth for ourselves versus us sharing that wealth and influencing those around us.

    Daniel Crosby [00:19:35]:
    Yep. So one of the things that I talk about in the book, when you’re writing a book like this, that’s all about sort of wisdom, right? Wisdom with respect to money. One of the things that I was always looking for was points of consensus in the faith and wisdom traditions. So if you look at, you know, religion, philosophy, whatever, through the millennia, there has always been this idea that if you’re charitable, if you give money away, more comes back to you. And that doesn’t. Like the math. Ain’t math in, right. Like, why.

    Daniel Crosby [00:20:08]:
    Why is it that giving money away would. Would cause more to come back to you. And yet, when you look at the research on financial wellness, there’s two primary predictors of whether or not someone is sort of rates themselves as being financially well, the first one is imminently logical. It’s how much money do you have? Right. You know, of course. Right. Yeah. People with more money feel more financially well than people with less money.

    Daniel Crosby [00:20:36]:
    Duh. Right. The second one is, how charitable are you? So people at every income stratum, the more they give away even people who make, you know, well below the mean or median, you know, wealth or salary, regardless of income. Regardless of income. Regardless of wealth. The more charitable you are, the more financially. Well, you are. The only thing that is a better predictor is literally how much money you have in the bank.

    Wes Moss [00:21:07]:
    So it’s. It’s really kind of number two on feeling.

    Daniel Crosby [00:21:10]:
    Feeling wealthy, feeling wealthy. Yep. Feeling well off, feeling wealthy, being charitable, being giving is the second best predictor of that. And what’s wild is you would find people, like, if. If you and I sat down and looked at a bell curve of a wealth distribution or an income distribution, we would go, well, these folks aren’t well off, but they would tell you that.

    Wes Moss [00:21:34]:
    They are, hey, we are.

    Daniel Crosby [00:21:35]:
    If they’re charitable and there are people with millions and millions and millions of dollars who are quite stingy, who. We would go, wow, this person is objectively rich. And they would tell you, no, I’m not. And they’re greedy.

    Wes Moss [00:21:48]:
    In the financial planning work that you do, do you encourage charitable giving in relation to this work? I mean, I.

    Daniel Crosby [00:21:57]:
    Yes.

    Wes Moss [00:21:58]:
    Okay.

    Daniel Crosby [00:21:58]:
    Yeah. And a specific.

    Wes Moss [00:22:00]:
    It’s almost like it’s a little bit of a third rail. It’s like you don’t want to tell somebody, hey, you really should be giving away money. It’s like, wait a minute. But you have. That’s part of your.

    Daniel Crosby [00:22:11]:
    I’ve owned it now. I’m over the awkwardness. And I just tell people, because the science is unequivocal, that there’s only a few ways that money can buy you happiness reliably. There’s a few ways that you can spend money to make your life better. Okay. One is to buy yourself novelty. Right? Like, if I’ve never been to Japan, I really want to go. If I flew to Japan today, I’d have a great time.

    Daniel Crosby [00:22:36]:
    And those memories would linger because it’s new sights, new sounds, new tastes.

    Wes Moss [00:22:40]:
    Okay, so I’m going to skip to this a much later question, because I want to just go into this. Money can kind of sort of buy happiness, but one, money can buy happiness in the form of novelty.

    Daniel Crosby [00:22:51]:
    Novelty? Yeah. Because stuff where money doesn’t buy happiness is stuff we get habituated to. And we’re really good at getting habituated to stuff.

    Wes Moss [00:23:01]:
    Meaning like I’m used to a really nice dinner, so.

    Daniel Crosby [00:23:04]:
    Exactly.

    Wes Moss [00:23:05]:
    It doesn’t move the meter anymore.

    Daniel Crosby [00:23:06]:
    Doesn’t move the needle. Right. So it’s like my house, the house I live in now. The first time I saw it, I mean, I melted. I’m like, this is gorgeous. I’m going to raise my family here. I can’t believe my blessings. And now it’s just like where I throw my socks, right? It’s just my house.

    Daniel Crosby [00:23:26]:
    It very quickly becomes just the backdrop of your life. Right.

    Wes Moss [00:23:30]:
    And what do we call that again?

    Daniel Crosby [00:23:31]:
    Habituation.

    Wes Moss [00:23:31]:
    Habituation, yeah.

    Daniel Crosby [00:23:33]:
    And you know that trip to Japan though, you know, you go once, maybe twice in your life, that memory stays with you forever. And frankly, it gets better over time because of the way that we sort of pump up our memories and misremember things in a positive way. Buying novelty does a lot to buy happiness, getting out of stuff you hate.

    Wes Moss [00:23:55]:
    And by the way, novelty does not include. Well, is it new? Anything like a new watch? Can that be or is that a really short.

    Daniel Crosby [00:24:04]:
    The watch you’d get habituated to quickly now, the novelty for the period of novelty. Yes. You would have some period of novelty where you would really admire that watch and think it was incredible. And then that would quickly wear off. A car.

    Wes Moss [00:24:21]:
    A new car.

    Daniel Crosby [00:24:21]:
    Yeah, a lot. It’s really novel. Experiences would be a better way to say it.

    Wes Moss [00:24:26]:
    Okay, so novelty one.

    Daniel Crosby [00:24:27]:
    Yep. Two.

    Wes Moss [00:24:28]:
    Tell me how else we can buy happiness.

    Daniel Crosby [00:24:30]:
    Let’s buy happiness. Let’s buy some happiness.

    Wes Moss [00:24:31]:
    I love this.

    Daniel Crosby [00:24:32]:
    Getting out of stuff you hate. Yeah.

    Wes Moss [00:24:35]:
    What do you call that?

    Daniel Crosby [00:24:36]:
    That’s just what I call it. I’m from Alabama, dude.

    Wes Moss [00:24:38]:
    That’s just getting out of stuff you hate.

    Daniel Crosby [00:24:41]:
    Getting out of stuff you hate. Yeah. I will never mow my lawn again. Right? Like I’ll clean a bathroom, I’ll clean my house, I’ll clean the dishes, I’ll cook.

    Wes Moss [00:24:51]:
    Well, did you grow up being a landscaper or.

    Daniel Crosby [00:24:53]:
    No. Well, I just grew up where it was hot and I had to mow my big lawn over and over and over and over.

    Wes Moss [00:24:58]:
    When I get older, I’m not doing this. Yeah, yeah.

    Daniel Crosby [00:25:00]:
    I’ll just never do it again. Knock on wood. Right. Let’s hope I can stay. Let’s hope people buy the book and I can keep paying somebody. But yeah, like, I hate mowing my lawn. I don’t hate a host of other chores. I hate mowing my lawn.

    Daniel Crosby [00:25:13]:
    It’s too hot. I hate it. And I’m very happy to pay someone to do it. That truly buys me happiness. You know, whatever. Your mileage may vary, whatever that is for you, if you can use it to buy yourself some time and buy your way out of something you hate, do it. The other thing is to spend money on relationships, right? So that could be, again, you could pair it with that novelty that trips, like family trips, trips with a spouse. These things pay off.

    Daniel Crosby [00:25:39]:
    Biggest we also see, there’s fascinating research. People who buy cars, right? Like, if I go buy a Lambo, like, if I go buy a Lamborghini, that buys me happiness for a week or two. But if I buy a Lamborghini to be in the north Fulton County Lambo.

    Wes Moss [00:25:58]:
    Club that the Pate Le Monde racer.

    Daniel Crosby [00:26:01]:
    Yeah, yeah. That actually does buy a lot of happiness. Cause I get some buddies out of it, and every Saturday, we can pop our hoods and drink our coffee and, you know, look at our engines and talk about life. So people who buy cars to join a car club, a lot of happiness. People who buy cars to stun on their neighbors. No, no. Last for five minutes, no happiness. Yeah.

    Daniel Crosby [00:26:27]:
    What else am I missing?

    Wes Moss [00:26:28]:
    So we’ve got novelty. Oh, and charity.

    Daniel Crosby [00:26:31]:
    And charity, yeah. Giving money away. I’m gonna forget the exact stats, but in the book, they gave people, they had this condition where they would give people some money, give them 20 or $50, and in one condition, they would say, go buy yourself something. Go buy yourself something with this $50. In another condition, they would say, you’ve got 24 hours to look for a way to give this away. Then they said, which do you think will make you happier? 90 something percent of people thought that buying myself something would make me much happier than giving money away. And they are wrong.

    Wes Moss [00:27:10]:
    The inverse, probably dramatically, it’s really 90% of people enjoyed giving it away more.

    Daniel Crosby [00:27:17]:
    Yeah. It’s dramatically high. Like, almost everyone prefers giving it away to spending it on themselves. Because, again, memories, we have something called rosy retrospection. Right? If I’m. If I’m giving. If I take $50 and I do something nice for someone to need, I buy a friend a meal or, you know, give it to someone who needs it, right? The memory of that stays with me. And not only does it stay with me, it gets better with time.

    Daniel Crosby [00:27:43]:
    I’m just like a fish story, right? It just. It gets better with time. And the details get a little fuzzy. Right? Like when you. When you take your kids to Disney in the moment, it’s a nightmare. Like at any given moment on that trip to Disney, you’re like, I just paid $10 for water. Like, what’s happening? But the memory of that trip is incredible.

    Wes Moss [00:28:05]:
    It gets better with time.

    Daniel Crosby [00:28:06]:
    Gets better with time. So things get worse with time. Memories get better with time.

    Wes Moss [00:28:13]:
    If you’ve ever done a Jane Fonda workout or if you remember as a kid rocky running the steps, and if Michael Keaton is still mister mom to you, then guess what? It’s officially time to do some retirement planning. It’s Wes moss from money matters. Weren’t those the good old days? Well, with a little bit of retirement planning, there are plenty of good days ahead. Schedule an appointment with our team today@yourwealth.com. dot that’s your, yourwealth.com dot. One of my favorite pieces of research on, I’ve done multiple studies of money and happiness. And can it buy you happiness? This is a topic I’ve studied now for a long time. It is an interesting, I guess it’s not surprising, particularly now, but just seeing the data come back on trips with friends is one of the biggest happiness.

    Wes Moss [00:29:08]:
    It’s kind of the sleeper happiness multiplier that I’ve written about that came back in our research is that if you’re taking at least one trip a year with friends, it’s a big multiplier on happiness levels, reported happiness levels. So I’m a huge agreement with that. But I kind of like this, the novelty, getting out of stuff. You hate spending money on relationships. I’d say that, aka trips with friends, charity. Let’s get to though the, in the, in the chapter around money can kind of sort of buy happiness sometimes. There was the famous study, the $75,000 a year you’re happy up to that point. You’re happiness increase up to that point.

    Wes Moss [00:29:49]:
    I like that you just said with inflation it’s 100 grand. That same number. Because that was a 1520 years ago study. But you talked about two different pieces. First of all, there’s that research and then there’s the, is it Killingsworth? Matthew Killingsworth said it goes, he’s from Penn, I think. Right. He says that goes to 500k. But don’t you have kind of two pieces of that one was a, yeah.

    Wes Moss [00:30:16]:
    What are the two pieces of money by?

    Daniel Crosby [00:30:18]:
    How? It’s complicated. That’s why the chapter got that title. That’s why the title of the chapter is funny. Um, okay. So the first thing we have to know that there’s there’s two sort of salient points here. I’ll start with the smaller point. One is that for about 15% of people, no amount of money bought happiness. Ever.

    Daniel Crosby [00:30:36]:
    Ever, right? So that’s like one thing to know that, like, wherever you go, there you are. So if you are just an unhappy person intrinsically, and you are chasing money, it’s not going to work. Like, if you suspect that you are in this 15%, you are, and if you suspect this of yourself, you probably are, and you need to go to therapy.

    Wes Moss [00:31:03]:
    Yeah, I was going to say, what’s the answer?

    Daniel Crosby [00:31:04]:
    Yeah, yeah. I mean, you need to go to therapy and work on your relationships and work on the way that your mind works, and work on the way that you interpret stimuli and things like that. Like money is never going to scratch that itch, ever. Right? So that was one of the things that came out of the sort of the round two of that Kahneman Deaton study. The study. The second thing is, it matters a great deal how you measure happiness. In some of these studies, what they do is they give you effectively a pager. Like if you think back to the eighties, right? They give you a pager and they page you five, seven times a day.

    Daniel Crosby [00:31:42]:
    And they have like a rating scale, right? A rating scale.

    Wes Moss [00:31:46]:
    Is this the mappiness project or is this different than that?

    Daniel Crosby [00:31:49]:
    I don’t know what that is.

    Wes Moss [00:31:50]:
    You heard of the Mappiness project?

    Daniel Crosby [00:31:51]:
    I don’t know what that is.

    Wes Moss [00:31:52]:
    The mappiness was UK based. And it’s funny, I read the PowerPoint and they have the very old iPhone, it’s like the iPhone one. And so I think it was like in zero seven or 20070 eight, whenever the first iPhones came out and they pinged you. And that’s where they said, like the people that were close to the water, because they were geographically, there was a huge bump up in happiness if you were near the water or you’re outside in general. But anyway, keep going.

    Daniel Crosby [00:32:21]:
    So keep going about this. So that’s where you see the plateau in happiness. Cause that moment to moment, hey, how you doing? People who don’t have much money, they are acutely uncomfortable, right? Like their house is cold, their house is hot, they’re scared about their kid going to a bad school, they can’t afford insurance for their, you know, whatever ails them. So there’s a point at which that just moment to moment physical discomfort is elevated in people with low level income wealth. And then it just goes away, like over 100, because about 100 grand a year is what you need to, like, you know, eat good food, be healthy, send your kid to a good school, etcetera. Now, the other thing.

    Wes Moss [00:33:06]:
    So it’s really the elimination of bad stuff.

    Daniel Crosby [00:33:09]:
    That’s correct. Right. It’s really like the absence of wealth can reliably buy you misery, right?

    Wes Moss [00:33:15]:
    The absence of wealth can reliably buy you misery.

    Daniel Crosby [00:33:19]:
    Yeah. And a certain level of wealth can buy you physical comfort. Okay. So, like, if you’re trying to measure happiness that way, you’re gonna get, I think, some false positives. The other way they measure it is to just do self report. Like, hey, Wes, how’s your life? Like, write a paragraph for me about how’s your life doing? And they measure that up to half a million dollars a year. And they found that it was just like, up and to the right all the way to half a million dollars a year. Like, when you talk about what they call subjective well being self reported.

    Daniel Crosby [00:33:50]:
    Self reported.

    Wes Moss [00:33:51]:
    It’s almost always self reported, though.

    Daniel Crosby [00:33:52]:
    Yeah, yeah, yeah, yeah, yeah. Self reported. Subjective well being. Like, hey, how you doing? People’s, you know, people’s self appraisals and their stories get better all the way to the top.

    Wes Moss [00:34:04]:
    Well, up to 500.

    Daniel Crosby [00:34:05]:
    Up to 500.

    Wes Moss [00:34:06]:
    And then it does plateau for after.

    Daniel Crosby [00:34:07]:
    Well, there’s nothing after 500. Cause, I mean, then they don’t measure it past 500 because then they’re. I mean, there you’re talking about, you know, half a percent of the population.

    Wes Moss [00:34:16]:
    I wondered about that. So they just stopped at that level.

    Daniel Crosby [00:34:19]:
    They stopped at 500. So, theoretically, do you think it would.

    Wes Moss [00:34:22]:
    Keep going up at a million and 2 million and 5 million?

    Daniel Crosby [00:34:25]:
    I’m so here. This is the gospel according to Daniel. I’m going to say, I’m going to predict that it rolls over at some level. I don’t know what that level is. But, like, when you’re a billionaire and you’re in the public eye, you can’t go out to eat. Like the media. Like, there’s people hiding your bushes, you know? I mean, I think there is a level of. Well, I think there’s an optimal level of wealth that’s probably the north of 500,000 a year, but, you know, well south of what the richest people in the world have, because your life just gets complicated.

    Daniel Crosby [00:35:01]:
    But there’s a level of wealth where you can fly private, eat, you know, go wherever you want, do whatever you want, and not get hassled. That’s where I’m going to hypothesize the.

    Wes Moss [00:35:11]:
    That it would stop. It would stop going up, but it wouldn’t be going down. Then you get to billionaire status and you’re under attack.

    Daniel Crosby [00:35:17]:
    Yeah. It’s like it rolls over at some point because life gets complicated.

    Wes Moss [00:35:21]:
    Then there’s this research about. From its. I don’t know how to pronounce it. Sonia Lumberski and Ken and Sheldon. That our happiness is really a or half is determined by our genes. The other 40% is choices. Choices. And then the ten is what our life circumstances.

    Daniel Crosby [00:35:40]:
    That’s right. Yeah. So this is. This is always kind of like a good news bad news study. And this is. This is really well validated. This is stood up to replication and everything, that when you look at a host of traits, like psychological traits, about half of it is down to your mom and dad, like. Right.

    Daniel Crosby [00:35:58]:
    So if you want to be happier, you know, pick better parents. I don’t know. That’s the biggest. Yeah. That’s the biggest thing you could do is have better parents. Like have better genese. So that’s about 50% of it. So we’re gonna write that off.

    Daniel Crosby [00:36:13]:
    Cause they’re not a darn thing we can do about it. Right. Of the remaining 50%, most people assume that it’s primarily your circumstances. Most people assume that it’s like, primarily your circumstances. But there’s this famous. There’s this famous research about the paraplegics and the lottery winners and, like, all this stuff where people who have really good stuff and really bad stuff happen to them tend to return to relatively stable rates of happiness. And that’s. Of the remaining 50%, about 80% of what remains, 40% writ large, is the choices we make and how we interpret events and how we think them through.

    Wes Moss [00:36:58]:
    When you say the choices we make, are you referring to how we choose to respond?

    Daniel Crosby [00:37:04]:
    Yes.

    Wes Moss [00:37:05]:
    Which is something we can change, but that’s not easy. Right. As a psychologist, that’s like. That takes some work.

    Daniel Crosby [00:37:10]:
    No, no, it takes some work in sort of the Victor Frankel sense, right. Of, like, between stimulus and response, there’s a space, and in that space lies our growth and freedom. Right. That’s. That 40% is what Frankel’s talking about in that quote that I got mostly right there. I think.

    Wes Moss [00:37:27]:
    I think it was mostly right. But I think maybe what I like most about that is that you say that the way we spend our money has. It’s the way we spend the money that may have a real impact on its ability to buy us some contentment, which goes into novelty. Getting out of the stuff you hate spending money on, relationships, charity, et cetera.

    Daniel Crosby [00:37:49]:
    Yeah.

    Wes Moss [00:37:50]:
    All right. Let’s go, lighter topic. Okay, let’s go. The Joneses ain’t happy. Even the Joneses. The Jones. I love the story about, like, where did they come from? Like, a comic strip or.

    Daniel Crosby [00:38:00]:
    Yep.

    Wes Moss [00:38:01]:
    What was the. There’s a couple theories of who the Joneses really are, but either way, we’ve all grown up with. Keeping up with Jones is only recently it’s been Kardashians.

    Daniel Crosby [00:38:11]:
    Yep, that’s right.

    Wes Moss [00:38:13]:
    So you’re highlighting that. We all think. I guess we think that other people are happier, and we think that if we try to keep up with them, we’re, to some extent, that would buy us some happiness. But instead, we should be focused on a whole host of other things. So, personal growth, relationships, community, is there anything we can do about this?

    Daniel Crosby [00:38:33]:
    Yeah, it’s tough. I mean, none of this stuff is.

    Wes Moss [00:38:35]:
    Easy, especially now with Instagram.

    Daniel Crosby [00:38:38]:
    Well, okay, so you make a great point, right? If we go back a couple thousand years, like, you and I would have known about 100 people, right? And we would have been indexing our success relative to those hundred people, because things like wealth and success are absolutely relative concepts. Now, I can compare my bank account and my car and my abs and whatever to professional athletes, to musicians, to superstars, to billionaires, to trust fund babies. Our ability to compare and index our lives relative to other people has never been greater. I know we’re supposed to be keeping it light here. It’s landed us in this weird spot like, this is the wealthiest the world has ever been. When this country was founded, 95% of the world to include this country, was living in what is now dollar two a day, inflation adjusted, backbreaking poverty. 95% of the world. Today, that number is 9%.

    Daniel Crosby [00:39:45]:
    Right. The world has never been richer post world War two.

    Wes Moss [00:39:49]:
    So 91% of the world is not an above that.

    Daniel Crosby [00:39:53]:
    Two is above. Yeah, yeah, yeah, yeah. We’ve never been. We’ve never been wealthier, right? The average american home has tripled in size post world War two. Right? If you look at a house from, like, you know, the post war era, it’s just like that immediate post war era. They’re teeny tiny, right? I mean, they’re like postage stamp homes. Tripled the home size. Happiness is down.

    Daniel Crosby [00:40:17]:
    If you look at the average person now, if you start with, how old are you?

    Wes Moss [00:40:24]:
    I’m going to say not quite 50. Still got a little ways to go.

    Daniel Crosby [00:40:28]:
    So I’ll be 45 this year. If you look at people, our generation and on down, right? Our generation and on down.

    Wes Moss [00:40:36]:
    I’m an x. We’re Xers.

    Daniel Crosby [00:40:37]:
    Yeah, yeah, yeah. Gen X and on down, right?

    Wes Moss [00:40:40]:
    Well, you were almost a millennial, almost.

    Daniel Crosby [00:40:42]:
    A couple years off, you’re like year two off.

    Wes Moss [00:40:44]:
    You’re a super young Gen Xerathe.

    Daniel Crosby [00:40:46]:
    Yeah, yeah, yeah. I’m a young or a very, very geriatric millennial. Right. So our generation and on down, 51% or greater of people say that they are lonely and socially isolated. And when you look at the research on social isolation, it’s the equivalent, it’s twice as fatal, it’s twice as bad for longevity as obesity, and it’s the equivalent to smoking 15 cigarettes a day. So we’re in this crazy world, by the way.

    Wes Moss [00:41:18]:
    It’s not as bad for the boomers on up.

    Daniel Crosby [00:41:21]:
    It’s not. They’re much happier. Like, if you look at America in terms of the happiness, like, whatever, 125, 130 countries, we’re like 45th. But if you look at boomers on up, they’re like 9th, like in the world. But if you look at Gen Z, they’re like 75th. I mean, so, yeah, it really is the younger generations dragging things down. And I think a lot of it is social media and comparison because is it?

    Wes Moss [00:41:48]:
    And maybe I hadn’t thought about it until, as we’re talking this through, is that if you go back 1000 years or 1050 thousand years, kind of the survival of, hey, that camp has better shelter and I kind of would like to have the better shelter. It was really more like survival looks like they’ve got fires every night and we can’t seem to make a fire very often. So is that like this primitive survival that it’s like, hey, I wanna be. I wanna have a better shelter, better to cook. And now it’s translated, I want better abs.

    Daniel Crosby [00:42:24]:
    Well, the degrees, yeah, the degrees of freedom have expanded too, right? I mean, for much of human history, right? If you look at human history on a one year timeline, you condense it down. This country was started on Christmas, right? So I mean, it’s like for most of human history, it was like really rich people had, you know, everything. Well, they had everything, but. But being really rich, there was like one guy and it was always a guy, right? But basically everyone else, like, you were rich if you had one pair of shoes, you were poor if you had zero pairs, like kind of thing, you were rich if you had two pieces of bread and you were poor if you had one. The degrees of freedom are dramatically different now. I mean, we have people living in backbreaking poverty and we have people, you know, flying off to space because they, like, they have nothing to do with their money. Right. You know, so, I mean, the degrees of freedom, like, what’s possible is much more expansive now and our awareness of that.

    Daniel Crosby [00:43:27]:
    So the more time people spend on social media and the less thoughtful they are about their reference classes, the less happy they are. There’s research, too, in the book that talks about middle class people tend to. Middle class people tend to have upward and downward comparisons socioeconomically. Right. So they’re able to say, yeah, I got about half of my friends make more than me, about half make less. Like, I’m good. People who are really wealthy have effectively all downward comparison, and it makes them really unhappy. And what they do is.

    Wes Moss [00:44:02]:
    What do you always say the people that are wealthy have all downward comparisons?

    Daniel Crosby [00:44:06]:
    Well, yeah, because everyone’s poorer than them. Yeah.

    Wes Moss [00:44:08]:
    And why does that make them unhappy?

    Daniel Crosby [00:44:10]:
    Well, because it leads them to sort of excuse their wealth and to go, oh, hey, well, they have to justify it. Does that make sense? Like, well, how did I get here? When all these other people are wanting or struggling? Well, it must be them. And people who are looking way up have the same problem. People who are very poor or unhappy, because they’re always, they’re envious. Right. They’re going, well, why does that everyone have this? Everyone’s ahead of me. So we find that your reference class matters a lot, like, who you’re benchmarking to is very important.

    Wes Moss [00:44:45]:
    So you’re talking about these levels of happiness. So boomers have done a good job of staying relatively happy as a group. The millennials are really Gen X and lower as a lonelier generation. And I don’t know if you’ve done any or if you’ve read any studies about this, but I think it was maybe Dan Buettner from blue zones commented around the average number of close connections, or just, let’s call it friends, has actually dropped over the course of the last 25 years, almost coinciding with social media. So is it social media’s fault? I don’t know. Have you seen any research around that? Like, we don’t have as many close friends as we did even 30 years ago.

    Daniel Crosby [00:45:27]:
    Yeah, I have seen that. And there was a. I think there was a time where the average number of close friends, or, sorry, the modal number of close friends. So the most freak, not the average, but the most frequently occurring response was zero. Right? Was, I have zero close friends. That’s kind of where we are now. Gen Z, better than.

    Wes Moss [00:45:47]:
    But it wasn’t that way 50 years ago.

    Daniel Crosby [00:45:49]:
    No, no, no, it wasn’t that way. It wasn’t that way. And I think there’s a lot at play there. I think social media is part of it, because social media has the look and feel of connection with none of the substance. Like it’s sort of a counterfeit. And really, the day I quit, I quit Facebook about a decade ago. I’m still. I’m still giving them my eyeballs through Instagram.

    Daniel Crosby [00:46:13]:
    But I quit. I quit Facebook about a decade ago when I saw a Facebook friend at the grocery store. We passed each other and we didn’t acknowledge.

    Wes Moss [00:46:22]:
    You didn’t say hello.

    Daniel Crosby [00:46:23]:
    We didn’t even say hello. And I was like, this is stupid. Like, this is not a real friend of mine. It was like this awkward panic that we saw each other and we knew we were connected, and yet I. There was no real connection. And I was like, how stupid is this?

    Wes Moss [00:46:37]:
    But I think, again, why I love this topic around money and happiness and the Joneses aren’t that happy, is that I think it’s just a constant reminder. Cause it clearly this is falling by the wayside is that we really have to make in the world we live in today, a concerted effort, maybe more than ever, on our relationships. And I think that that’s one thing I try to remind people of. And it reminds me, too. I’m always reminding myself, like, we got. You’ve got to be able to put time in for that because it’s work. It’s time when you got a business and you’ve got kids that can. Your other social relationships can easily kind of be like kind of the stepchild and kind of forgotten about.

    Wes Moss [00:47:24]:
    As we talk a little bit more about the money side of the world, one of your chapters, we might be trying to solve the wrong problem. What is the problem? And this is maybe called the CNBC problem, which I’m guilty of, too. I watched that, that in Bloomberg 24, 24/7 yeah.

    Daniel Crosby [00:47:45]:
    Well, I think there’s a couple of ways we try and solve the wrong problem. One of them you just talked about, right, we try and optimize for wealth and not for relationships. When you go back to that Harvard longitudinal study on happiness, relationships were the ultimate predictor. Even when you go to the blue zones, research that you talked about earlier, when you look at the nine elements, the nine sort of facets of what predicts longevity in life, three of them are social. When you’ve got people in Italy eating processed meat, smoking unfiltered cigarettes, you still do that living to be 100 years old, because they just have such tight knit social networks. And it sort of defies belief. And yet they do it. There’s another way back to the CNBC Bloomberg thing, that we try and solve the wrong problem, though, which is that we try and maximize returns and not sort of maximize our behavior or just sort of our temperance in markets.

    Daniel Crosby [00:48:45]:
    One of my favorite studies around this was it was the best performing mutual fund of the two thousands, right? So the two thousands lost decade in the S and P. If you bought and held for ten years, you lost money. Like an absolutely singularly brutal time. It was tough. Yeah. Singularly brutal time in american investing.

    Wes Moss [00:49:05]:
    It was tough.

    Daniel Crosby [00:49:06]:
    And the best performing mutual fund of that era got 18.5% per year, per annum.

    Wes Moss [00:49:13]:
    So that was 2000 to 2010, which the market was essentially flat.

    Daniel Crosby [00:49:16]:
    Flat over that time. Best performing fund, 18 and a half percent a year. Bonkers. Like, youre doubling your money every three years. Right. And the average investor in that mutual fund lost money. And people wonder how that’s possible.

    Wes Moss [00:49:30]:
    How could that be?

    Daniel Crosby [00:49:31]:
    Yeah. And it’s because they’re jumping in and out at all the wrong times. Right. It’s like they, it runs up. They hear about it, they pile in. It mean reverts. It goes down a bit. They jump out.

    Daniel Crosby [00:49:42]:
    Yeah. It goes back up again. They go, I was wrong, and then jump back in.

    Wes Moss [00:49:46]:
    So that’s the ultimate. And what do we call, is that just crowd behavior? Is that what, what do we call that behavioral finance, where you’re kind of, you end up forced into or coaxed into exactly the wrong time? What is.

    Daniel Crosby [00:50:02]:
    Yeah.

    Wes Moss [00:50:02]:
    So there’s just following the herd.

    Daniel Crosby [00:50:04]:
    Yeah, I mean, there’s a couple of things there. There’s hurting. There’s hurting at play there. Right. Insofar as it’s a relational thing or like a social thing, there’s also just recency bias.

    Wes Moss [00:50:14]:
    Recency bias.

    Daniel Crosby [00:50:14]:
    You know, one of the, one of the things that we tend to think is, is that whatever has happened recently will sort of go on in perpetuity. And in markets, it tends to actually be quite the opposite. What’s done well tends to do poorly and vice versa. So, yeah, I mean, it’s just, it’s so hard to get through your head that performance isn’t the thing. And yet what is the thing? The thing is, the thing is patience. Right. Is diversification, patience, and focusing on other.

    Wes Moss [00:50:52]:
    Things with the fundamental belief that the broad, diversified market will go up over.

    Daniel Crosby [00:50:58]:
    Time, you know, or not. Yes. In one of the chapters, I forget what I even titled it, and there are 50, what I titled the chapter, but it was, I don’t feel bad.

    Wes Moss [00:51:08]:
    Even you don’t remember.

    Daniel Crosby [00:51:09]:
    I don’t remember what I called it. Yeah. But it was like, basically, investing is an inherently optimistic act. And that, to me, is the way I can think about it. Investing is a belief that the world will get faster, better, stronger, fairer over time, which it has imperfectly.

    Wes Moss [00:51:32]:
    Imperfectly, but it has imperfectly.

    Daniel Crosby [00:51:34]:
    But it has, like a. Investing is. Is at its core a belief in a brighter tomorrow. And I think I can be bullish about a brighter tomorrow, even if any given moment. Seeing some storm clouds.

    Wes Moss [00:51:48]:
    Yeah, there’s always clouds in the sky, right? There’s almost never any time where there’s not some clouds in the sky. I think of it as the army of american productivity. Is this just this. If you really think, how does it just keep getting better? And it’s that part of it, in the way I look at it, is that. And I’ve got a couple different categories here. But think of it as half of America just, or two thirds, 90% of America just has to work, and they have to go and be pretty good every day in order to keep their job. So we’re productive out of fear, we’re productive out of purpose in some cases, because some people do love their jobs.

    Daniel Crosby [00:52:27]:
    Yeah, sure.

    Wes Moss [00:52:28]:
    And we have this variety of different ways that we all ultimately get up and try to do a little bit better so that we either keep our job or we love our job. We get 100, and the workforce is, what, 160 million folks or something getting up every day? And they’re all part of that army of further productivity. Okay, so how about this is, again, another simple, but arguably one of the more powerful things within finance and investing, which is riches in repetition. Tell us about that. And maybe some habits about. Take us through some of the steps or maybe some examples, how to form a new positive financial habit.

    Daniel Crosby [00:53:10]:
    Yeah. So I’ve recently lost a bunch of weight, and I think that that is a good sort of metaphor for these things, because when I first started that.

    Wes Moss [00:53:21]:
    Process, what is that weight journey, by the way, just to give our audience 52 pounds. So you were what, and you wanted.

    Daniel Crosby [00:53:26]:
    To be, what, 230 to 178? Yeah.

    Wes Moss [00:53:29]:
    That’s a lot of work.

    Daniel Crosby [00:53:30]:
    That’s a lot of work over six months. And when I first started to do it, I mean, I basically had three rules, right? High protein calories.

    Wes Moss [00:53:40]:
    So this wasn’t just a no zempic thing.

    Daniel Crosby [00:53:42]:
    No, no, no.

    Wes Moss [00:53:42]:
    This was a good old fashioned.

    Daniel Crosby [00:53:44]:
    This is the old fashioned torture, right? Like, move your body every day. Right. Move your body every day in a calorie deficit every day. Uh, and 1 gram of protein for every pound of body weight, effectively, which is tons, right? I mean, tons of protein, right? When I started that, it was so horrifically painful. Like, I was cramping. You know, I was driving home to see my parents, and I was cramping. I felt hungry all the time. Like, I was miserable.

    Daniel Crosby [00:54:17]:
    I was depressed. I mean, it wasn’t fun. And that’s why people quit diets, right? Because the first couple of days are awesome, but really, after four or five days, it became a habit. And tracking my food in a little app, which for the first week or two felt super annoying. Like, super annoying. Like, oh, I had five crackers. Let me enter that in like an idiot. Like, you know, just so annoying to me at first.

    Daniel Crosby [00:54:48]:
    Now, it’s a joy, right? It’s a joy because I’ve seen the results. I’ve seen the positive impact. I’ve seen the improvements in my health and my performance at the gym and things like that.

    Wes Moss [00:55:00]:
    And by the way, how much better do you feel?

    Daniel Crosby [00:55:03]:
    I feel great. Yeah, I feel great. And it’s funny, I did a whole thread about this on Twitter, and it’s like, look, in some ways, nothing’s changed, right? I mean, the people who loved me still love me. Like, I mean, you know, but then the biggest thing for me is I like how I look in family pictures now. And I would avoid family pictures for years. Cause I didn’t like how I looked. And I was like, that’s sad to me. Like, I have to mourn the loss of all the pictures I wasn’t in.

    Daniel Crosby [00:55:35]:
    Cause I didn’t want to look at my double chin or whatever. Like, you know what I mean? And it’s like. And the biggest. This such a funny thing. But the biggest thing to me now is that I can be in family pictures, like, no sweat.

    Wes Moss [00:55:48]:
    And by the way, you do look good.

    Daniel Crosby [00:55:50]:
    Thank you very much. You look good. Thank you very much.

    Wes Moss [00:55:52]:
    You look like you’re in shape.

    Daniel Crosby [00:55:53]:
    But I guess my point here with habits is there’s really no shortcut. And I dug into the research here, and it was like, how many days does it take? And there’s all these disagreement, and it depends on the habit and all this stuff. But the research found that some of the best things that you can do is, first, that people with willpower, we assume that it’s something innate, like this fire burning deep within them. And what the research finds is they basically just do a better job of avoiding temptation. You know, one of the things that I have to. Had to talk with my wife about is I’m like, look, I’m on this journey. You can’t put a double stuffed oreo in my path. Like, you cannot.

    Daniel Crosby [00:56:35]:
    Like, I cannot.

    Wes Moss [00:56:36]:
    The same exact thing. They are the impossible. They are so good.

    Daniel Crosby [00:56:41]:
    They are too good.

    Wes Moss [00:56:42]:
    There’s nothing like an Oreo cookie.

    Daniel Crosby [00:56:44]:
    No. Double stuff. A double stuff. I could leave a regular Oreo alone, but a double stuff, that’s all me. And it’s just like. It’s just that you stay out of temptation’s way. It’s not that you have some reservoir of greatness. It’s that you surround yourself with making the right decision.

    Wes Moss [00:57:04]:
    But if we think about this in financial habits, and I think that you had written about how some people do take to the habit more quickly, there’s a study where some people, within five days, it becomes a habit. Some people take a half a year. So there’s that. But if we translate that to investors, and you and I have both seen this, so many of the millionaire next door families that I work with, that we’ve probably. You’ve seen many of these over the years. A lot of that is just the kind of the automatic habit of saving a little bit more than the average person and investing a little bit more than the average person, and then just doing it over and over and over again. In retrospect, it can be pretty boring, but then it’s kind of this amazing result in the end.

    Daniel Crosby [00:57:53]:
    Yeah, no, that’s well put. Because when I was on this journey, I would lose. You’d lose 1015 pounds. Very hard to do. But you don’t look all that different. Right. That’s the point.

    Wes Moss [00:58:03]:
    It’s like investing. I’ve been doing this for five years. It doesn’t seem like there’s a lot. Yeah, yeah.

    Daniel Crosby [00:58:07]:
    I mean, when you start at. When you’re 22 and you get out of college and you’ve been saving for five years, and you look at your statement, you’re like, yeah, I have $30,000. We like, you know, yay. You know? But, yeah, it’s. It. The compounding effect is powerful. So, yeah, it takes different times for different people to form a habit, but that willpower, peace is powerful. And when it comes to investment automation, automation, automation is huge.

    Daniel Crosby [00:58:31]:
    And also, you know, a behavior in motion tends to stay in motion, and a behavior at rest tends to stay at rest. Right. You’d have to pry my calorie tracker out of my cold, dead hands now. I mean, it’s just like, it’s such a habit part of the deal.

    Wes Moss [00:58:48]:
    Yeah.

    Daniel Crosby [00:58:48]:
    But at first, it was so cumbersome. And the same thing is true when. When you’re able to say no to the lake home or the boat or whatever. When you don’t have the money and you do something better with it, that becomes easier and easier.

    Wes Moss [00:59:03]:
    Easier and easier and easier. Tell us about the power of why.

    Daniel Crosby [00:59:06]:
    Why?

    Wes Moss [00:59:06]:
    Your money needs a why. And this goes back to goals based investing. Are you a hundred percent? Do you subscribe to goals based investing? And if so, how does that look?

    Daniel Crosby [00:59:18]:
    Yeah. So goals based investing, this is like my passion in life, right? So Viktor Frankl is my hero, my professional, personal hero. Right? I’m all about meaning and purpose. When you look at the research, it’s.

    Wes Moss [00:59:34]:
    I read that for our audience, who doesn’t know the victor Frankl story? Just the meaning part of that.

    Daniel Crosby [00:59:41]:
    Yeah. Yeah. So Viktor Frankl was an austrian psychiatrist, a jewish man who was a prisoner of nazi prisoners prison camps in world War two. Right. Lost everything and everyone he loved in the atrocities of the various prison camps he was put in. But the whole time, he was observing his fellow prisoners, and he found that. He quotes Nietzsche and he says, he who has a why to live can bear with almost any how. Right.

    Daniel Crosby [01:00:11]:
    So he found that the prisoners who were looking forward to something, who had some vivid dream of what the future could look like, were the ones who very often were the ones that made it through or kept their heads high enough to fight another day. When we apply it to investing, I’m talking about vivid, salient goals tied to your money. I’m kind of agnostic about what that looks like. What they are. Yeah. About what they are. Or even what that looks like. Some people do bucketed accounts.

    Daniel Crosby [01:00:44]:
    Lovely. If you want to do that. Some people, that is.

    Wes Moss [01:00:46]:
    This bucket is for this.

    Daniel Crosby [01:00:48]:
    Yep.

    Wes Moss [01:00:48]:
    And this bucket is for that. Yeah.

    Daniel Crosby [01:00:50]:
    Yeah. Some people, you know, just work with an advisor to keep that goal sort of front and center. But I’ll share a couple of people pieces of research real quick. Morningstar found that people in goals based accounts had 15% more wealth than their peers. There was research out of Canada that I just. Absolutely. They looked at a control group and an experimental group. Control group.

    Daniel Crosby [01:01:15]:
    No intervention. The experimental group, they had a bank account, and they had to look at a picture of their kids or their spouse or their kids before they made any financial transactions. And they made such better decisions. They saved more than twice as much for retirement. They were more prudent. They were less likely to go to cash, like all these things, because they just effectively recentered themselves every time they were logging back into that bank account.

    Wes Moss [01:01:42]:
    And by the way, think about the longevity of a family photo when you think it takes it even beyond retirement. When you look at your kids, you look at you and your wife, you’re thinking, okay, this is for when we’re 60 to hopefully 100. You look at your kids and you think, wow, this is for the next hundred years, hopefully.

    Daniel Crosby [01:01:59]:
    Yeah, yeah, yeah. Sei found that people during the great financial crisis were ten times less likely to go to cash to sell all their stocks if they were in a named account.

    Wes Moss [01:02:12]:
    So it’s a very named, as in, hey, this account is.

    Daniel Crosby [01:02:16]:
    Yeah, the. The west retired to the Bahamas fund versus, you know, ABC 123 account, you know, sort of a generic account. There’s just something powerful about tying dollars to life that reminds us that this isn’t just some video game with, you know, numbers pinging up and down, but these pots of money are there to fund real values and. Real values and beliefs and missions of ours.

    Wes Moss [01:02:46]:
    What does not kill you makes you richer. Tell me about this chapter. About 65% of Americans are stressed, and there’s this giant number. This was a shocker to me. Almost like up to a third of people have financial PTSD.

    Daniel Crosby [01:03:06]:
    What? Yeah. So in the APA, the American Psychological association, does this stress in America study every year. And the most recent one, this was wild to me. Number one, stressor is money. Number two, stressor is work. Number three, stressor is the economy.

    Wes Moss [01:03:25]:
    Hold on. That’s right. I remember this. But it wasn’t health.

    Daniel Crosby [01:03:30]:
    No, I thought it would be. Relationships were forced. It was like, money, work the economy. So, like money.

    Wes Moss [01:03:35]:
    This is what we are worried about on a daily basis. It’s all about money, work the economy.

    Daniel Crosby [01:03:40]:
    Which is just really just money, money, money. Yeah. I mean, it’s just like money where you make your money, where you spend your money, and then your relationship. Right. So you think about this, and you look at the research that shows that people who work with a financial advisor are less likely to get divorced. They’re more prepared for any emergency, like including natural disasters and things like that. They have higher levels of positive marital communication. They have higher levels of global happiness.

    Daniel Crosby [01:04:09]:
    And you look at this.

    Wes Moss [01:04:10]:
    These are families that work with a financial advisor.

    Daniel Crosby [01:04:13]:
    Yeah.

    Wes Moss [01:04:14]:
    Is it because a financial advisor, ideally, or should be helping people visualize and have that goals based investment?

    Daniel Crosby [01:04:22]:
    Well, there’s a couple of reasons why. I think it’s because you get to offload it. Right? You get to put that burden on someone else’s shoulders. I think is a very big piece of it. You go, okay, well, that’s handled. Wes has got that now. That’s handled now. And I think if you get your money right, if you get your money right, it sort of lifts all boats.

    Daniel Crosby [01:04:42]:
    I think it just lifts all boats. Money touches every single part of our lives, and if we can figure that out, we’ve figured out a lot.

    Wes Moss [01:04:50]:
    No one gets rich alone. Americans love the story of the bootstrap. It’s like, oh, this person did this from nothing, which really almost never happens. There’s a few cases. Almost never happens.

    Daniel Crosby [01:05:04]:
    Yeah.

    Wes Moss [01:05:05]:
    So that kind of struck me as one of the cool essays in this book. But you also just, you think it’s important to acknowledge the role of locke to some extent, and chance, of course, along with effort. Right. Nobody’s going to question the effort side of it, but kind of an interesting realization that part of our financial journey and our investments in ourselves and our earning potential obviously is a huge part of our financial picture. But it’s not that. It’s just us in that journey, which kind of goes back to your relationship. You’re only as rich as your friends.

    Daniel Crosby [01:05:42]:
    Yeah. No, that’s right. So there’s a couple of interesting pieces of data here. Right. The first is exactly what you just said. It put me in mind of the Obama, the Obama quote about, you didn’t build that right where he was basically talking about, look, we all stand on the shoulders of giants. We’re all sort of beneficiaries of working roads and libraries and all these things that the government does for us. And you can love that comment.

    Daniel Crosby [01:06:08]:
    Or hate it.

    Wes Moss [01:06:08]:
    Or hate or hate it.

    Daniel Crosby [01:06:10]:
    Yeah, you can love it or hate it. I don’t care. The concept, I think, is a good concept to look for ways to thank people who have gotten you to where you got today. I talked earlier about my dad, who I came to as sort of a career counselor. He’s a financial advisor. He made this comment that sort of put me in mind of what became my eventual career. He wasn’t in a place, candidly, to open a lot of doors for me. Extremely well connected in the industry or whatever.

    Daniel Crosby [01:06:41]:
    And yet I still, I mean, I had to knock all those doors and make all that stuff happen. And also, I never would have had the idea without his assistance. Yeah, without his assistance. And so I think there’s, I just think it’s a good human being thing to look around and thank people. I also think there’s ways that we can rely on each other to enhance our wealth both relationally and materially. You know, I found research that shows that people who have a mentor, right, who. People who have, like, an identifiable, nameable mentor, make dramatically more money than people who don’t. People who go to therapy make a lot more money than people who don’t.

    Daniel Crosby [01:07:23]:
    It was good. It was good for about a ten or 11% bump in pay when people start working on themselves, because interpersonal EQ, right, like, interpersonal factors a better predictor of terminal wealth than IQ. And I think that surprises a lot of people. But you can. We all know, we’ve all had the experience of working with someone very bright and very awful to work with in the workplace, and they don’t get very far, hopefully.

    Wes Moss [01:07:52]:
    But if we were to look, as we kind of wrap up here, if I were to look at your collection of your writing, you’ve got multiple books that I’ve read that I’ve really learned a lot from, and I think that help a lot of people. Laws of wealth, behavioral investor. The newest book, the soul of wealth, which is these 50 reflections on money and meaning. What do you think of that collection of work? Kind of a top one or two or three, maybe one takeaway from all of that that we can take home today that would both increase our likelihood for financial success and a well balanced, happier life.

    Daniel Crosby [01:08:34]:
    Well, you know, I love how you set it up. Cause it really. That’s the journey, right? The first two, the laws of wealth and the behavioral investor are fundamentally about getting your money, right, because that is important, right? I mean, we talked earlier about how an absence of wealth is predictable by misery. Predictably. Like, your life won’t be great if you don’t have a certain level of wealth. Gandhi, I’m paraphrasing here, but Gandhi also said to a poor man, bread is God, right? We need a certain level of attainment before we even start to worry about something beyond where the next meal is coming from. If you want to worry about God and legacy and existential concerns and friendship and self actualization, that’s an expensive hobby, right? You have to sort of get your money right before you can worry about those things in a certain respect. So those two books are about that.

    Daniel Crosby [01:09:31]:
    But then we’ve got to get our heart right. And what I found, I have been, you know, in the course of my work over the last 15 years, I have rubbed shoulders with a lot of really extraordinarily wealthy people. And some people get really excited by that and impressed by that. But it has been an interesting front row seat to just how human they are just how much Alexander the great they have in them, where they have, you know, everything they could ever want materially. And yet often something is missing, and so you can’t have the one without the other right? You really, they’re both so important. So learning the fundaments of saving, investing, spending, so you can get your money right. But then once you’ve accomplished that, if you do it right, even on a fairly modest salary, you will be rich. Like, I mean, if you reliably invest ten or 15% of your income for 30 years, for 30 years, like, you will have money.

    Daniel Crosby [01:10:33]:
    Like, you will have freedom, you will have wealth. And what are you going to do with that right? Are you going to chase it as an end unto itself? Or are you going to get your heart right and understand the lessons of the soul of wealth and get your heart right?

    Wes Moss [01:10:47]:
    Well, hey, thank you for all the work you’ve done over the years as you’ve led this charge in behavioral finance, which I think really does. It just helps people in a sport that’s tough. The world, the League of investing for retirement, it’s a tough league, and not everybody can do it. And two, so that work, I think, has been really helpful to a lot of people. And I think that what you’ve shared today here on the retired student podcast, I think that it’s kind of the perfect complement to the mission statement that we’ve had in the financial firm that I work for is helping families find happiness in retirement. And that’s been our mission for many, many years. And it is where the kind of the heart and the mind meet. That’s what you’ve covered today.

    Wes Moss [01:11:40]:
    So thank you, Daniel Crosby, for enhancing our wealth, our money, our meaning, here today on the retire Sooner podcast. Thanks for stopping by.

    Daniel Crosby [01:11:51]:
    My pleasure, man. Hey, y’all.

    Mallory Boggs [01:11:54]:
    This is Mallory with the retire sooner team. Please be sure to rate and subscribe to this podcast and share it with a friend. If you have any questions, you can find us@wesmoss.com that’s w e s mh moss.com. you can also follow us on Instagram and YouTube. You’ll find us under the Handle Retire Sooner podcast. And now for our show’s disclosure. This information is provided to you as a resource for informational purposes only and is not to be viewed as investment advice or recommendations. Investing involves risk, including the possible loss of principal.

    Mallory Boggs [01:12:24]:
    There is no guaranteed offer that investment return, yield, or performance will be achieved. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors or general market conditions for stocks paying dividends. Dividends are not guaranteed and can increase, decrease, or be eliminated without notice. Fixed income securities involve interest rate, credit inflation and reinvestment risks and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Past performance is not indicative of future results. When considering any investment vehicle, this information is being presented without consideration of the investment objective, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Investment decisions should not be based solely on information contained here.

    Mallory Boggs [01:13:09]:
    This information is not intended to and should not form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment tax, estate, or financial planning considerations or decisions. The information contained here is strictly an opinion and it is not known whether the strategies will be successful. The views and opinions expressed are for educational purposes only as of the date of production and may change without notice at any time. Based on numerous factors such as market and other conditions.

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