Welcome to How to Money.
I'm Joel and I am Matt and today we're talking overcoming your Scarcity Brain with Michael Easter.
Yeah, that's right. We are joined by Michael Easter. So he's the author of Scarcity Brain, and we are pumped to have him on the podcast today. And so we're talking about scarcity, right, And even though we know what the word means, scarcity is likely a concept that a few folks listening to this podcast have much experience with, at the very least in our quite developed country. We have enough food, we have enough shelter and clothing on hand that the vast majority of folks haven't felt the
true impacts of real scarcity. And in fact, most of us have more than we need of all of those things, plus the countless cardboard boxes of stuff that we can also purchase to fill in any remaining containers and closets that aren't already bursting up the seams. But we are talking with Michael, and he has traveled the world. He's observed tribes and the jungles of Bolivia. He studied addiction
and bombed out hotels in Baghdad. He's spoken with the top researchers of psychology in order to understand the human mind, and we're gonna be talking about how it is that we can shake some bad habits in order to live more fulfilling lives, and hopefully we'll have some great takeaways on how it is that we can view and pursue money in a more satisfying way as well. Michael, thank you so much for joining us today on the podcast.
Yeah, thanks for having me. Guys. This should be fun.
Yeah, we're looking forward to it, Michael. The first question we ask anybody who comes on the show is and it reveals a little bit about them. But, like Matt and I, we like to save and invest money for the future, but we also like to spend money in the here and now on things that matter to us. Craft beer is one of those, and so we always like to ask our guests what's their craft to beer equivalent?
What are they spending money on intentionally, maybe more so than most people would think is wise while they're doing the right thing with their money too.
Yeah, I would say my most obscene purchase is probably a nice watch. Now, I will say it's because one I just like well made watches, kind of a watchdork. But two, I also rationalize it as a business expense because in some of the places I travel for my work, having a nice bargaining chip if you find yourself in
a pickle is a good thing. And certain certain brands it's like, I mean, they'll that'll get you out of a pickle pretty quick if you're like, hey, I'll trade you my watch for X y Z. So that's how I rationalize it.
Okay, it's so funny.
Matt just stumbled upon at a bar recently, a watch club and I.
Swear local restaurants, so it's called red bar. Do you have one of those one of those clubs over there?
Well maybe I don't. I nothing that I know of.
Okay, but if Matt's going to get into any hobby, I'm predicting it's going to be fancy watches.
So I would I would. I would tell you to avoid it. You'll save a lot of money.
I do feel like I am resisting. Like Joel talked me into getting this garment, which actually maybe we'll talk about this later on as far as technology and gamification, but they were on sale at Costco, and I have been pretty happy with not only the time it keeps, but also some of the health data, the stats that it feeds me. It's amazing how much it gives you for one hundred and fifty bucks. Yes, yes, say that
I'm trying to avoid the chronographs, actual fancy watches. But Michael, I feel like now is as good a time as ever to talk about habits here towards the beginning of the year. But you say that this is a quote, it doesn't matter how much gas that we give our good new habits if we don't resolve our bad ones, we still have our foot on the break. Talk to us about what you mean by that and why you're kind of obsessed with individual human behavior that's actually in our own worst interest.
Yeah. Well, I mean it's rather simple that we kind of live in this world where there's all the information about all these things we should do. I mean, I'm kind of more in the health wellness psychology space, and you know, you see, it's like adopt this new specific exercise routine, add this food to your thing. We're always trying to add the next new good habit. But when you look at what actually moves the ball farthest downfield for people in terms of improving their life, improving their
well being. I would imagine the exact same thing follows for finances. It's to stop doing the stuff that hurts you most. Yeah, so it's to cut out the foods that are your triggers and are leading you to gain weight. It's to stop making that purchase that is putting a massive dent in your finances. Usually, all things equal, taking away bad habits is going to move the ball a lot farther downfield than is adding good, new, shiny habits.
Because if you are giving gas to those good new habits but you still have your bad ones, it's like you just got the car and with the emergency breake on.
Yeah yeah, and you're just like reving the engine. You're not going anywhere. You're doing a lot of damage. At the same time, give me the elevator pitch for your book, Scarcely Brain, Like, what is it that you were trying to accomplish with this one? Because you've I mean, I was telling you before we start recording, I read your book The Comfort Crisis before I read this one. Talk to me about Scarcly Brain and what made you cause what caused you to write it?
Yeah, I mean, so the underlying question of that book is, you know, everyone knows that everything is fine in moderation, and yet everyone sucks at moderation. So and so why is that right? And what is it that we can't seem to moderate? And when you look at it, the behaviors that people have trouble with is they usually fall into a handful of silos like eating too much food, buying too much stuff, information, binges online, etcetera, etcetera, etcetera.
And these are all behaviors that in the past would have helped us survive. So a lot of my work it takes in evolutionary lens in our modern problems. So if you think about all the things we crave today, usually in the past they were scarce, were hard to find, and if you would have sort of overdone them, that
would have given you a survival advantage. But in today's world, where we have an overload of information, where we have an overload of food, where we have Amazon Prime and a billion items that we could buy and get in twenty four hours all at our fingertips, that is not always so good for us. So we tend to we tend to overdo these things in a world where it ultimately Backfuyers.
Talk to us about scarcity, Ques, Michael, because you say that they can be they can be big, but they can also be small and subtle, you know, even down to our neighbors, like buying a new car. You know, is that keeping up with the joneses like a queue in this case, you know, just the felt need to not lag behind others, our neighbors, our friends, even if it ends up meaning that we end up going down the path of falling into consumer debt. Talk to us a little bit about scarcity, Ques.
Yeah, So scarcity queue is a piece of information in our environment and we encounter in our environment that makes us feel as if the resources that we need to sort of thrive and survive are scarce. So I'll give the example of, you know, neighbor buys a fancy new car.
What tends to happen is that this is a this is a sort of threat to our status almost So the scarcity que is that we don't have enough status because now people buy cars, yes, to get from point A to point B, but also because cars would become a sort of status symbol. And it can be something as simple as that. A good big example that I
think everyone can identify with would be the pandemic. So when the pandemic first set in, you know, all of a sudden, everyone goes, oh, I'm not going to have enough food, I'm not going to have enough toilet paper, I'm not going to have enough xyz. Right, this big scarcity que. So what does everyone do. They go to the grocery stores. They brawl in the aisle, they buy all kinds of food that they're never going to eat. Right, It's like, oh, we've got to have one hundred and
tens of spam. Definitely throw that.
The twenty five pound bag of rice from Costco came and clutch Michael.
I believe it. But they don't have to beat that big either. I mean, there's this it's really interesting research from Vanderbilt that found that even when people have a scarcity queue, like running out of ink and a pen something as simple as that, they will make decisions that sort of let's show hoarding behavior. So they'll be like, Okay, I need multiple pens, and like they start kind of
freaking out inside. And so I think that you see this, this is basically an evolutionary survival thing we have right in the past. If you had this cue that like, oh maybe I'm not going to have enough food to survive. Oh no, it would totally make sense to go out and try and hoard as much food as possible. But today it's like food is never really that's scary exactly right.
I mean we throw out about a third of the food that we produce in this country, and so and this and this all obviously applies to a lot of different areas in our lives, and I think it ultimately leads people to make decisions that don't exactly make sense in the context of today.
So how do we connect our brains to kind of the scarcity queue? Maybe that's tapping into some sort of primal urge that might cause us to do something that's not in our best interest because times have changed. And guess what, Like I don't necessarily need to go buy a twelve pack of pens just because I ran out of ink in the one and actually I probably have three more in the drawer somewhere that I just haven't
looked for yet. Is there a way to kind of overcome that scarcity Q that kind of gets brought to your attention, but it's almost like subconscious Yeah.
I think we need pretty much we need to use full heuristics. So I'll give you an example with possessions. So there are effectively four reasons why people buy stuff. The first is because stuff is a tool, Right, you use tools to accomplish something. That's how things have pretty much always been. But you can also buy stuff, like I mentioned before, for status. You buy it because it elevates you over someone else in the social hierarchy. The
third reason is because possessions can help us feel belonging. So, for example, you buy a Utah jazz jersey because you're a Utah jazz fan and you want to identify with that the jaz fans, Right, it's part of this like collective thing. And then fourth is boredom. So you see that when people get bored, we go looking for escapes from it, and today we usually go on our phones.
And what we look at on our phones, I mean we're seeing advertisement after advertisement, and it's never been easier before to click that ad, click through to the buy button, and then buy this thing that you go, wait, did I really need that? So in the context of this, I think you need to when you're sort of feeling like you want to say, make a purchase, you need to ask yourself what am I buying this for? Is it for status? Is it because I want to feel
some sort of belonging. Can I get that elsewhere? Or am I just bored? So I run things through the
heuristic of gear not stuff. So gear gears is possessions that we use to achieve a higher purpose, right, We're using them to accomplish some bigger thing that gives us deeper meaning, whereas everything else stuff is sort of like, yeah, I'm going to buy this brand because I want to look cooler than my neighbor, or I want to do this because I want to feel some belonging with this random you know, corporation, whatever it might be, or I'm
just bored. And so I think trying to figure out get to the root of why you're doing what you're what you do is the key to starting to unpack larger behavior changes.
So as you kind of run a purchase through that set of criteria, are some of those do you think inherently better than the others? Obviously, Like when you say something is a tool, it sounds cool, or you know, like it's it's it sounds like justified, it sounds noble, you're like, oh, no, I'm using this to accomplish something, whereas obviously boredom is that sounds like a terrible reason. But I feel so I feel like the two in the middle, right, status and belonging, I feel like those
are a little squishier. I feel like, in my mind, those are a little more gray. And would you push back against anybody who would be critical of somebody for buying something in order to fit in with a group, you know, for that belonging, or even to signal to others that maybe they're better, right, Like, that's basically that that conspicuous consumption that you're talking about, or that's what luxury goods are, all right, almost totally.
So I think that my I'm definitely not here to pass any value judgments. I would rather just people be aware of why. Okay, So you know, I always like to say, you know, for example, let's take behaviors of using your phone too much. It's like, I don't care if someone wants to spend nine hours a day on Instagram. I really don't care. But what I want people to be able to do is make the conscious decision about them doing that, because often today we do things without
really understanding what the underlying motivation is. So if you want to buy that, you know, whatever it is, certain, I'll take myself that certain watch brand. Yeah, because it's also a status symbol. It's like, all right, but I
just want you to know. I just want a person to be aware of Okay, this is one of the reasons I'm buying it, because I think we try to make these rationalizations in our mind where we go, oh, no, like this is blah blah blah blah blah blah blah, and we talk ourselves into purchases that maybe we otherwise wouldn't have made if we were being honest with ourselves.
Yeah, it's funny.
It makes me think about how Matt always talks about using text messages. I have some friends who communicate solely be a text message, and I haven't actually talked to them and had a conversation or met with them in real life in quite a while. And Matt, the way he talks about it is like, no, it's always to facilitate in person hangs. And so if you're gonna text me, let's come up with a plan to actually make the real life hike or beer hang. Actually, you know, actually happen.
Is that maybe a good way to think about it, using these digital platforms, using shot and it makes me think about buying a shirt for a bowling league is like one sort of consumption that helps you fit in versus buying that Utah jazz jersey that you mentioned and having like the three different versions but watching alone on your TV at home, but you kind of sort of feel like you fit in, but you don't really fit in.
I don't know.
I know that there's like like one leads to a more ultimate community, yeah, versus one that feels a little more virtual and like a little more artificial. Yeah exactly.
Yeah, Yeah, I think so. And I think if it's facilitating actual interaction between people, that's great, and maybe it
is online that's totally fine. But I do think that you see this a lot, you see I think where it gets a little weird is when you see corporations sort of use this as a means to get people to buy so a lot of times today, you know, certain brands have become almost a sort of religion where people buy into them because they symbolize some other social thing that they're trying to claim, yet they're not actually doing anything social behind that behind that purchase.
That's right. Okay, So I guess while we're kind of talking about buying stuff on the shopping front, like there's research saying that, like with a website, it's got one of those like stupid discount wheels that you spend like that, folks end up spending more money. There are just some of these different types of ways that were incentivized to be parted with our dollars. How have you seen that play out in some of the research that you've looked at.
Yeah, so I got so I live in Vegas, and I got really interested in slot machines because this is sort of the extreme end of people who just can't seem to get enough. Right, So, Las Vegas, there are slot machines everywhere and people play them around the clock. Like I can go fill up my car with gas and go into pay and there's slot machines in the gas station. There's people playing them around the clock, and you're just like, this doesn't this doesn't make any sense.
So long story short is that I start this, you know, deep dive investigation into slot machines, and I end up at this laboratory that is on the edge of town in Las Vegas. But it is a sort of casino laboratory hybrid. So it's this fully working, brand new casino, but it is funded by not only the gambling industry but also big tech, and it's used to figure out what gets humans to gamble more, to buy more, to
do all these different behaviors. And while I'm there, I end up talking to this guy who's a slot machine designer, and he tells me about this thing that I call the scarcity loop. And it's basically this three part behavior loop that is really good at pushing people out of moderation. So it's got three parts. It's got opportunity, it's got unpredictable rewards, and it's got quick repeatability. So one, you have an opportunity to get something of value that will
improve your life. Two unpredictable rewards, you know when you will get that. You know you'll get that thing of value at some point, but you aren't entirely sure when, and you don't know how valuable it's gonna be. And then three quick repeatability. You can immediately repeat the behavior to try and get the rewarding thing over and over and over. So if you think of a slot machine. It's like you can win some money, you play a game.
You're not sure on any given game if you're gonna lose, if you're gonna win a little, or if you're gonna win a lot, but then you can repeat that game over and over and over and over. Now, the reason why this is important is because this exact same architecture that's in the slot machine is also being put into all sorts of different products and services and media stuff today. So it's really what makes social media work. It's being put into some personal finance apps, it's what makes dating
apps work. So well, there's just element elements of it all over our lives right now and giving people those unpredictable rewards. To bring it back to your question, so when you put a wheel in front of someone with a discount and they spend that wheel, there's this moment of suspense where they're not sure if they're going to get the big discount, the little discount or what. And when that lands, that's exciting and that tends to compel behavior. So you see a.
Six even if it's just ten percent off.
You know, even if it's ten percent off, and you see a sixfold increase in conversion rates when companies put the gambling wheel on their websites to sell something.
Yeah. What's interesting too, is you spend a lot of time in your book talking about like dopamine and how oftentimes that is confused with like, oh, dopamine, it's the feel good chemical. But you clarify and I feel like more research has been coming out recently that's talking about
how no, dopamine is the anticipation drug. Like it's it's the chemical that's released as we are pursuing something or as we are anticipating something, and oftentimes it's it's almost like the chase, you know, being better than the reward. Perhaps that that oftentimes we're so addicted to. Is that what we're seeing.
Yeah, So there's there's different systems of the brain. Basically, there's the liking system, which is a system that is different than dopamine, but that is what actually gives you the pleasure. And then there's the wanting system, and this is what dopamine is involved in. So dopamine basically just helps you pursue the pleasurable thing. And it's also somewhat complicated because dopamine is involved in all these different processes in the body, So things can get kind of oversimplified
to just like dopamine made me do it. It's like, not really, it was just kind of there, you know.
Yeah, So you mentioned the scarcity loop, and you talked about gambling, and you mentioned how all these other sorts of things in our in our society are built kind of based on this some of these same wiring to try to get us to do things that might not be in our own best interest. And makes me think of an app like robin Hood, which is great democratization of investing for all, except for this potentially fatal flaw that causes people to invest their money or gamble their
money thinking they're investing. It also makes you think of sports gambling. Do you have any thoughts on that? Like it's it certainly seems like the rise of sports gambling. And there's one thing about going and playing at a machine, even at a gas station to where you live or something like that. There's something very different about that than having it in the palm of your hands, like hyper optimized and targeted to try to get people to gamble away as much of their money as they possibly can.
Yeah, So I think what we're talking about here really is the quick repeatability angle, so to your point, so that's the third part of the loop. So with with the slot machines, it's like the slot machine is always going to stay in the casino. You have to physically go to the casino in order to play the slot machine. But with sports betting apps, you can do that at
any time for whatever reason you want. Right, And another thing that I think is really interesting with sports betting apps is they've further increased the quicker peatability by allowing people to make in game bets. So through the casino industry's eyes, one of the issues with sports betting is that you make a bet and then there's this time
delay until the game is over. Right, So a person could make one bet, but then there's three hours until they might make the next bet based on whether or not they won or lost their bet on the previous game. So in order to shorten that interval, because speed is exceedingly important to the casino industry, people started a lot of the companies started allowing people to make bets on Hey, well the team score on this play. Are they going to score a touchdown? Is the next basket going to
be a three pointer? All these different things that happen throughout the game, so people can make these really quick bets over and over and over as the game evolves.
That's right. Yeah, and again sort of like you're saying earlier, this isn't necessarily to say that, hey, all sports betting is bad, but like you said, to be a way where as to what it is that's going on behind the scenes and how I mean, I feel like at the core of what you're writing about here with your book is that these companies are they're looking for ways to make money, whether it's through selling product, getting you to gamble, whatever it is, and as you found, they
are using how it is that our brains are wired against us to cause us to continue to do that thing whatever it is, Yeah, that they're wanting you to do. But Michael, we've got more to get to with you. We got plenty more questions. We'll get to all that right after this. All right, we're back.
We're still talking about overcoming our scarcity brain with Michael Easter. His new book is just fantastic And if you want a little or a lot of insight on how your own brain works and then how you can fight back against some of the ways that advertisers and companies and
technology companies in particular are trying to hijack that. This book is incredible informative, Michael, I want to keep talking about, like some of the problem that in some of the ways in which companies are ever so insiduously impacting our ability, our desire to spend to part us from our money, maybe that we hadn't planned on being parted from. You've
talked about some of the newer Chinese websites. There's one called Tamu, and it's funny, Matt and I we haven't talked about these sites a whole lot, except for to say that some of the stuff that it seems like there's cheaper stuff being sold on a lot of these sites. But you call them the crystal meth of shopping, and so I'm like, okay, cool, I feel like I need to do a little more digging. What makes them so addictive, what makes them so dangerous?
Yeah, they use the scarcity loop probably better than any
other sites. So it is the unpredictable rewards. So when you log onto Tamu, unless they've changed their site for some reason, there's immediately you can get that pop up like I just talked about with the wheel, right, and you spin the wheel and you learn you get some discount, and so then it's like, oh, I've just learned that I'm going to I'm the winner, right, And I said, you always get the big one on TIMMU, like there's no actual gamble here, So then you're incentivized to purchase.
But then they have all these They use scarcity cues really well. So it's like, we only have X number of these items left, and then there's a timer going. So this leverages scarcity and urgency, which are two of the best sales tools that you can use. Right, we only have one and by the way, you got to make a decision in the next five minutes. That'll get someone to make a purchase, better, better than anything you
can really use. But even even Amazon uses this. So when you go onto Amazon, if there's a short supply, it'll say only three left or only five left right, because that leads people, it makes people more likely to click that buy button. I mean, there's a good Amazon doesn't do anything on accident. They're not just being like, hey, heads up. They know that that'll lead to people making purchases.
Probably, So it's really being shipped to an Amazon warehouse as they as that exists on the website, but still they want you to make you want it, to make you feel like you got to buy it now.
Yeah, exactly. And you know with all these with all these levers that get pulled, and you know, they get pulled that buy all different companies for all different means to lead us to you know, eat more food, to lead us to gamble more, to lead us to buy more.
I don't necessarily blame the corporations. I mean, their job is to make their job is to sell stuff, So it really becomes up to us to figure out, Okay, how can I interrupt this loop and how can I take some agency here exactly to help myself, because you know, I don't see a future where all of a sudden, the government is regulating all these shopping websites and regulating whether you know, food companies can make, how delicious their food can be, and whether gambling companies can do X
y Z. I mean, gambling's pretty heavily regulated, but you know it's always going to be there. And you know, frankly, when you think of something like take social media, what makes videos compelling is that they're really exciting. They leverage on elements of the scarcity loop, and so in order to sort of slow people down watching say, YouTube video after YouTube video, you would need to ask the YouTube creators to make videos that were more boring. And it's like,
do we really want to do that? No, it's like you really need to kind of kind of figure out some simple tactics that you can use to live better in this kind of strange but amazing world we live in now.
Yeah. Yeah, So, as you're talking about YouTube, that made me think about like one of the anecdotes you give in your book is about a professor and he's like an architect and he was building legos with his kid, and the way his son went about solving the problem was vastly different than how it was that he was trying to solve that problem. A go ahead and share that story with folks, but then be what is it? Well, yeah,
let's start there. Share that story because I want to follow up with what you said about the YouTube content creators and potentially creating less stuff and how that's not the solution. But yeah, can you talk about specifically that lego anecdote?
Yeah? Yeah, So this guy his name's LIGHTI Klots and he's a professor of engineering. He's probably one of the best engineers in the country. And he's playing legos with his son and they're making this bridge. And once they go to connect the bridge, they got the two pillars, and then they connect the span to the two pillars, they find that the bridge is wonky because they have one pillar that is taller than the other pillar. So
this thing is the span is in an angle. So, you know, mister engineer goes, all right, I mean, we can solve this problem. He turns around and he starts rifling through the lego bucket to find the you know, the blocks he needs in order to elevate the second span. But when he turns back with the legos, he realizes that his son has done something really interesting, and that's that he solved the problem by simply removing blocks from the taller span. Now, this solution did not occur to
him in the least, like, not at all. He immediately went, oh, we need to add more resources to solve this problem. So he wonders, you know, I am I a weirdo? Am I unique? What he does is he gets the bridge and he makes it again, so it's kind of wonky with the taller and shorter pillar. And he starts taking this around UVA campus and when he has meetings with other professors and with grad students, he'll pull out the bridge and he'll say, all right, fix this, and
he'll have you know, legos on the table. Every single person tries to solve the problem by adding more legos, by adding more resources, even though taking away legos is a better solution because then you have more resources. Right.
So he long story short is this leads him to study this phenomenon, set up a bunch of different experiments, and he finds that basically people are programmed to add, so when we try to solve problems, we typically throw resources at them if we can, even when subtraction is the better. So it's not that adding or subtracting is any better. But if we aren't even considering subtraction, like,
that's not good. Right. We want to have all our options on the table, and yet we tend to add, and as we get more and more resources, we tend to just pile on and pile on and pile on.
Yeah. Yeah, And that that kind of alludes to the scarcity to bring So the reason I wanted you to share that is like, as you mentioned the YouTube creators, I guess I started to internally wrestle with man. Yes, institutions, creatives, publishers, writers, We're not necessarily going to slow down in this stuff that is created out there in the world. And so on one hand, you have creatives, and you've got companies
and institutions that are going to continue to produce. But on the other hand, we have just as much time in our limited days, like we have just as much money. It's almost like, in one hand, things are going to continue to exponentially caliper in quantity. But it means I guess that on an individual level, it's more important than ever for us to figure out how it is that we can say no to a lot of that stuff.
Would you say that that's true, how we can say no to just the quantities of solutions at our fingertips are food or media, right, like the information you spend a chapter talking about that there's so much that's at our fingertips. It seems like it's more important than ever for us to figure out how to regulate heart take.
Yeah, yeah, totally, And I mean I think one great way to do this is, so I told you about the scarcity loop. If you interrupt or change or remove any of the three parts, that tends to reduce the frequency that you will do a behavior. So I'll give you a couple examples. Availability, so opportunity. If you can just take away the opportunity to do something, that will
reduce the amount of time to do it. So a simple rule of saying, look, I'm only going to make purchases in person because that's a huge barrier to entry, or saying like I have a problem with this young food. It's so simple, but it's like, well, don't keep it in the house, right. You can change how rewarding something is.
You can change the unpredictable rewards. So there's some fascinating research on cell phone use, and one of the reasons that cell phones are so interesting and compelling is the rewards through the bright screens and all the different colors you see. So when people put their phones into grayscale, that reduces how rewarding and stimulating the phone is, and people's cell phone time tends to drop by about an hour a day in studies. And then finally you can
slow down the behavior as well. There's an app that I really love for people who spend too much time on certain apps, and it's called clear Space. And basically what this app does it leans on behavioral psychology and it inserts a pause before you want to use any app.
So it goes, I'm sure you want to use this app when you go to open it, and you have to go yes, and it goes, okay, let's take a breath together, you know, and you have to take a breath for ten seconds, and then you have to go and then it asks you how long do you want to use the app? Because now it's like it realizes you're going to go off the rail, so you go to okay, I'm going to use it for ten minutes,
and that will. I mean, it's laning on psychology that we've known work since the forties, and it definitely reduces the frequency of app use. And so I think it's finding useful tools and tricks to get around the scarcity loop are the way to combat it.
Really to help us do the things we actually want to do over the long term, as opposed to the things we think we want to do right in the.
Heat of the moment.
Because the truth is there's a lot of things I want to do in the heat of the moment that aren't really helping me in my bigger goals. And that is what getting sucked into twenty minutes of doom scrolling is for a lot of people. At the end of the night, it's like, that's not how I expected or hoped to spend my evening. It just kind of became the default and the easy thing to do, and that's what our phones are. The data also finds that thinking
about long term consequences can help cool cravings. Right, so thinking maybe about out how doing something like that, doing something negative, going down that rabbit hole could seeing how wait a second, that might actually help or hurt me in my ability to achieve the thing I want to achieve ten years down the road. How do we connect
those dots. It makes me think of like a Fidelity did this study back in the day about if we just looked at like a picture of ourselves that was thirty had thirty years of age on it, where Matt and I look like we're grandpa's instead of like, you know, geriatric millennials. How that makes an impact on how much people save and invest for their future and it has a real, real impact. It helps people connect the dots.
Are there other ways that we can kind of connect those long term dots in our lives?
Yeah, I think it's The research on smoking is really interesting, so scientists will have smokers even just think about the long term consequences of smoking cancer things like that, and smoking behavior tends to reduce I mean, I think really it is. It is a little bit of an uphill swim because we are surrounded in so many stimulating things.
And I'm also not saying that no one should ever have any fun ever again, but I do think trying to insert pause and make sure you're doing behaviors consciously is really the answer. And again, it's like people really get just trapped in this scarcity loop. It's what makes people zone out to phones, is what makes people zone out to slot machines. All these different behaviors and understanding the mechanics of that is one of the first ways to stop it exactly.
Plus, you know, going in for that elementary school presentation when they brought the lungs in suspended in all to hide, you saw the oh, you saw the lungs that were the smoker's lungs, and then the lungs that were not right, Michael, Well, that's totally talking about smoking.
It makes me all the changes that have happened, one to cigarette cartons, two to where cigarettes are kept in a gas station, think about what happens in Europe, like the way they label the cigarettes over there, and all of those extra roadblocks essentially to buying cigarettes are participating in the smoking community. I think has is part of what's dramatically led to a reduction in smoking. So you
can't necessarily throw it all on like one thing. Oh it was it was abstinence smoking, abstinence talks in elementary school or something like that.
All scared straight, right exactly.
It's maybe some of that, right, But then it's all these other things too that just kind of remove smoking from consciousness and make it more of like kind of a rebrand it in like a grotesque sort of way. So yeah, that's fascinating. But we got a few more questions to get to with you, Michael, specifically about like how to use gamification maybe to push us on our path to achieve the things we want instead of having it prevent us from doing that.
We'll talk about that right after this. All right, we are back and again we're talking about how you can overcome your scarcity brain with Michael Easter and Michael, like Joel mentioned before the break, gamification is really interesting because it can I feel like we've talked about just all the bad ways that gamification is being used against us, but simultaneously it can be a really positive thing. I mentioned my brand new garment watch that Joel talked to
me in the game. But it's got this this score that I'm looking at right now. It's called VO two max and it's this singular number that I'm able to look at, And man, do I want to game my watch so that I see that number grow? By the way, It's not even possible. Come on, But yeah, talk to us how gamification how it can be so effective when it comes to our ability to change our behavior, whether for negative or for good.
Yeah. Well, one thing that I'll start with, because this audience is interested in finance, is that numbers are pretty new in the grand scheme of time and space. There are are actually still some tribes in the world in the Amazon that don't use numbers. So researchers think that humans basically evolved thinking being able to count basically up to three and then everything thereafter we would use small, medium, and large designations for all different things. Yeah, so numbers
get invented. I think it was about ten thousand years ago, and this very much changes our behavior and what we do because now we can quantify things, We can be more precise, and numbers allow us to really just take a big swath of some big concept and make it simple. Right, So, if you think about I'll use your VO two max. Thing. Why we care about VO two max is because it's a marker of health, it's a marker of fitness, and allowing being able to put a number on it basically
just tells you how you are doing. But really, when you look at the big picture, it's like, okay, well why do we care about health? And how do we define health? And what is fitness to us? What do you mean? Right? It's a big, complicated concept with a lot of different answers. It's really murky. So what numbers just allow us to sort of understand things very quickly.
And so when I think about it in terms of gamification and how it can help us, it can help people do behaviors that they want to do and easily measure their progress along the way. So with you, it's like, if you can get that, if you can do these things that are going to get that VO two max up that number, you can be rather sure that you've done some things that are probably going to move you away from disease. For me, it could be like, I
don't know. I'm sure there's finance apps out there that are using gamification to get people to save more or to invest more, or to you guys would know better about those than I would. I think the problem is when we focus on the number only without asking, well, why do I care about this number in the first place?
Yeah?
Right, So, well that makes me think of like there was a credit union in Michigan, and then there was a bank that launched something really similar or it hasn't taken off quite as much as I would have hoped, but instead of paying higher savings rates to everybody, it had like a lottery sort of aspect to it. Right, So everybody gets paid instead of five percent, maybe they
get paid two percent. But then there's winners every single week where if you hit certain savings targets, you're eligible you can win a thousand bucks, five thousand bucks, ten thousand bucks stuff like that, and that actually, even though maybe less money overall is going out to the average person, because there's a gamification aspect to savings, it pushes people harder in that direction. And that's the kind of stuff that like, it's not making companies as much money as
let's say, getting people to spend. It's not going to get funded in nearly the same way. But I love to see stuff like that on the gamification side that push people towards like the good habits that we want to see them express.
Yeah, totally, And I think it is you know what I think about it from a financial perspective, It is like the reason you care about saving in the first place is that you don't want to end up in a position where you are more constrained where you end up, you know, older, and you're out of money, and now
you've got all these problems. At the same time, when I think about salary, it's like, we all want to see the salary number go up, But then the question is why right, because ideally it allows us to live more free or a better lifestyle. Now. At the same time, pushing the salary number up over time, over time might actually require you to do things that make you less happy, that make you less free, right, so that number. Wanting that number to go up can start to constrain you.
The bigger question is like what is this what does this number stand for? Overall? Like why do we care in the first place? And unpacking that, I think everything from the number on your fitness app to the number in your bank account, to your health scores, to all these different ways that gamification gets used. It's realizing that you can use that number, the gamification as a tool
to incentivize better behaviors. At the same time, knowing what the bigger meaning of that better behavior is and why you're doing that in the first place, I think is important, so you don't start just chasing the number for the sake of the number and actually have the behavior backfire.
Exactly. That's true.
I mean, like even with saving or investing, you can overdo it. That's something we talk about on the show here too, And so you can you can max out your four oh one K every single year for a decade and then and find that you've squandered relationships because you were working too hard and you were too focused on investing. And so that's possible too. Right, you can have the wrong short term view and hope of this like long term supposedly good ideal, But why are we
maxing out our four O one K in the first place? Yeah, yeah, maybe we should be, but maybe you shouldn't be.
And it's different for every person. Yeah, so sort of what Michael was saying earlier. The key to so much of this is just moderation. Yeah, and but like we are so bad at that. We're so bad at moderation when it comes to any of the different things that we allow into our lives or the different things that we pursue. But truly that is the answer, And man, it's so powerful. What you said about the numbers two is that it oversimplifies things because, like I think, we
crave simplification. We crave the ability to look at a number on a watch and be like, oh, haven't hit my steps or oh my vo two Max dropped a point. I gotta get it, get out there, get these are more running. But there was a whole lot of information
or quality perhaps that gets lost in that translation. Like one of the examples you give in your book, you talk about one of the wine magazines or wine websites, But how it used to be where when they would try to rate wines, folks would use big, flowery language. But what that meant was that it was inaccessible to a whole lot of folks because it was so snobbish. But then somebody came along and they attached a number too wines. Can you talk about that and how that sort of changed that industry.
Yeah, so you get this guy, Robert Parker, and he started Wine Advocate magazine.
Wine Advocate, that's right, Yeah, And so what he did.
Is he would start giving wines a score from I think fifty to one hundred. Now, when he did that, it's simplify this really complex thing, which is trying to understand whether a wine is good or bad. Right, Like, sure, you could read a whole paragraph on twenty different wines, or you could just look at the number and go, oh, well that one got a ninety five and this one got in ninety four. Therefore that one is better. The ninety five is clearly better, and so people really latch
onto this rating system. Now, the issue is that Parker was rating the wines, and so he's obviously has his own preferences and tastes and what tends to happen is that when he gives a wine a score of ninety or above, it tends to fly off the shelves, while wines that are say in the eighties or in the seventies, they don't sell quite as well. So vinters wine makers they notice this and they go, oh, we need to
start making wines that this guy will like. We need we need wines that are a ninety plus by wine advocate. So that's what they start doing, and it changes this wine making tradition that had been going on for thousands and thousands of years, all because this guy's tastes and his ability to put a number on things. Now, if you don't have the same taste as this guy.
Though exactly, this information is useless to you.
Ye, And like the wines that you used to like from the wine maker, now it's changed because they're trying to have it be you know, good in this guy's eyes. Now. The other problem, too, is that people usually eat food when they drink wine. But if you're trying to rate something objectively, you can't have food with it. So now this has changed the whole freaking purpose of the wine and the wine making. But it's not you know, The important point is that it is not just in wine.
You also see this in basically the scoring or rating of anything from movies, to books, to music, to you know, Yelp reviews, to all these different things. So numbers really allow us to simplify really complex data. That is good for speed, but we leave out a lot of nuance, we leave out a lot of accuracy, we leave out a lot of individual variation.
Yeah, all right, Michael, you say scarcity is the mother of invention ideas and breaking new ground. So I don't know, give me your final thoughts on scarcity and how it impacts all of us on a day to day level when it comes to our money and when it comes to just generally our happiness in life.
Yeah. There's a really interesting study that I cite in the book, and it basically took two groups and it gave them a series of problems to solve using different resources. And for one group, they gave them effectively unlimited resources to solve the problem. And so that's what the people did. They just you know, they threw resources out of they threw money at the problem, and they did solve it. Now, the other group, they had very limited resources. They had
to sort of figure it out. Mcgiver fix the problem now. They also solved the problem too, except that the way that they solved it used fewer resources. Their fixes for the problem were also de more creative, more intuitive. And so I think that what happens when we face scarce resources is, like I mentioned with that other study from the Lego study, our tendency is to just try and
throw money at it, throw resources at it. Right, But if we just put some constraints on ourselves and go, Okay, I'm going to sit here and I'm going to pretend that I have no resources solve this problem. How would I try and solve it without any resources? I think that one you can not only solve it, but two your problem will often be much better than you might have expected, and that saves you money over the long term.
When you think about the problems that people face in their daily life and the financial means that those require.
I love it. Yeah, that's that might be the best argument for less is more. Yeah, Michael, thank you so much for talking with us. Where's it that folks can learn more about you? Your book, what you're up to?
Yeah, go on my website. Easter Michael, I have a newsletter and it's got a big archive with a lot of stuff like how you can learn more about that scarcity loop I talk to, and how it applies to finances, how it applies to all these different things. So, yeah, check out my website. You can sign up for the newsletter there and get the archive, and yeah, that's probably the best place to find.
Me right on Awesome.
We'll link to all that stuff in our show notes as well. Michael, thanks for joining us, man.
Yeah, thank you very much. It was great to talk nice.
Sorry, man, what that was a great conversation. Do you think we've had any conversation that was any less about money than the conversation we just had with Michael?
More about human behavior, But simultaneously, it just underpins how it is that we handle money, just like you know, the mindset and when it comes to developing positive, good habits that are going to lead us to be able to ultimately hopefully have more money on hand to kind
of live the life that we want to live. But I thought about asking Michael at the very top, like if he knew how much people were able to put into a four oh one k or a roth Ira or something this year I assume he didn't because it was not his thing, you know, which is which it just to prove a point that, like we had Michael on for other reasons, he's like brilliant, vastly knowledgeable on all these other things that impact our money, yes, but indirectly right exactly.
So yeah, what was your that being said? What was your big takeaway? Are you going to try to channel it in a personal finance direction? Okay?
So or no, there's two different ways. I feel like I go here, but I'm gonna say this when he said everyone sucks at moderation, and I think he's right, Like, I think it's really really hard to be a moderate
in this day and age. I mean, think about everything in our political landscape points to polarization hard left or hard right right, and or really if we're going to try to accomplish anything, it being sort of middle of the road seems like the craziest choice to make, but we think for the most ornamental most of the time, it's actually a good path to trot. And when it comes to what your goals are, well define your goals based on maybe more moderation, like do you want to
get fit cool? Do you need or want to be oral Torchen atger level fit probably not like I certainly don't, But like, what are your money goals amassing millions and millions and millions? That might not be it either. You probably don't want to just like us, you don't want to be the next Elon Musk or Jeff Bezos for many reasons.
But and that means, please, I know you want a rocket ship to.
The point I do, but not having those extreme goals is actually, I think going to lead to a happier life. And sometimes when it comes to the consumption side of things too, figure out what does it look like to maybe indulge in some of these things, know that they exist, know that these mechanisms are pulling at me, but that I also don't have to.
Go a whole hawk.
I can be a moderate Amazon user, right, stuff like that, Like I can moderately use my phone without going overboard. It's about pulling back in the ways that we that makes sense for us, so that we can live a life that more fully reflects.
Who we want to be. Dude, I couldn't agree more. Yeah, so my yeah, my big tech away kind of dovetails with that a little bit. But so he was talking about numbers and how they're relatively new, and how numbers in and of themselves are a gamification tactic or whatever it is that you're measuring, like, it doesn't matter what it is, whether you're measu how fast you can run grades.
That's something that makes me think of a recent piece I was reading the Times recently about how set scores and college yeah, and just college success rates there or with here. On the show, what we talked about personal finance. Net worth? Man, what a number that is incredibly easy to put your finger on, and we like it because it's simple, it's straightforward, and it's easy to compare, to write, not only to yourself, but man, how easy is it
to compare to others? Nothing, As I guess, you don't always know what somebody else's net worth, but the perceived net worth. And certainly when it comes to consumption, you know, oh, I don't know how much that truck costs. Truck costs as much, but that means their net worth went down exactly.
So it's kind of contrary there. But when it comes to those who are seeking after specifically fire right like financial independence, retiring early, I think there can be an obsession with it because you're trying to hit your number, Like that's the term that those folks oftentimes will use. And yes, it's it's more efficient to figure out where
you are on your journey. Yes it is easier, But man, are you missing out on so much of life that fits between in between this numbers that fits in between those monthly check ins to your net worth and figuring out sort of like what you said, what it is you want your life to look like is so important more than ever because we have so many resources at
our disposal that we can choose to chase after. But are you chasing after the things that you want to chase after in this world, in this day and age, I think is a more important question than ever before.
Well, and choosing not to decide is deciding to choose or whatever you know, you're choosing by default exactly somebody else is going to choose for you, and specifically it's going to be advertisers, it's going to be you know, the phone that's in your hand, It's going to be whoever's closest by you, Like those are going to be the things that impact you the most when it comes to what you end up actually doing as opposed to you proactively making that decision.
So couldn't agree more men.
Yeah, although slightly off topic from personal finance, like especially at the beginning of the year, given how great Michael's book is.
Well, that's what's so great too about his book is like there aren't like three clear steps that you need to leave this conversation or leave even reading his book knowing that these are the three things that you need to address, And so we most definitely recommend for everyone out there to seriously read his book cover to cover because the examples that he gives it just sheds light on humanity essentially as opposed to I don't know what feels might feel more like a cheap takeaway, but it
makes me want to recommend for folks to check out the How to Money Money Mission Statement, because that's what we're talking about here, is you asking yourself some of these larger questions. It's less the immediate tactics and strategies of how you're going to achieve those things, but from a very high level deciding for yourself which direction you want your life to be going in.
Those two things actually would pair really well together. This book and the Money missions in it, and the money mission statements free will link to it in the show notes. Yeah, and by the way, Michael is just a great writer. So that's another reason. If you want to read a book and by someone so good, who's curious, and that comes across in every inch of the text, then this book is for you. All right, now, let's get back to the beer. This one is called Nelson Double IPA
by Evergrain Brewing listener Rihanna. This is a last beer from her Big thanks to Rihanna for donating beers to the show. Matt Warrior thoughts on this beer.
My thoughts are that, so this is a single hop series and it's called Nelson because it's Nelson Hops. And all I know now is that I love Nelson Hops because, oh my gosh, the flavor it's got, like all the hot flavors that I'm looking for one hot. Well, yes, yeah, it's phenomenal. Completely agree. It's so good. Not too sweet, not too earthy, not too piny, man, it's not too one note.
Some of the other hops you're like, oh, clearly this is pine, Oh clearly this is citrusy, and this one has it runs the gamut with one hop but it really highlights the things I love about hops the most. So for Nelson, hops always stick out as a fave, and this beer does that hop justice.
Yeah, I feel like I'm slowly expanding my and you would think, with you and me being such beer nerds that for a long time that we would we would have a better handle as to some of the different flavor character profiles of some of the different hops. But I feel like I can add another one to my mental checker, Nelson, they got it going on nice.
Yeah, I love it all right. Well, that's going to do it for this episode, folks. Can't wait to see you back here on Friday for a Friday flight. And by the way, if you want links to some of the stuff we mentioned, including Michael's book and newsletter, you can find those up on our website at Howtimoney dot com.
That's right, buddy. So that's gonna be it for this one until next time. Best Friends Out, Best Friends Out.