The LA Kings holiday pack is back the perfect gift for the hockey fan in your life a three-game pack starts at just $159 and includes a holiday blanket buy today and you'll receive an additional game for free Don't miss out visit la kings comm slash holiday today today on the show.

Let's dig into our own anxiety especially Anxiety about investing my guest is a former clinical psychologist Dr. Alice boys. She's an expert on this subject. In fact, she's written a whole book on it Welcome to the radical personal finance podcast. My name is Joshua sheets and today is Wednesday, February 4 2015 You know, we are all thinking sentient human human beings or at least some of us think we are and that means we come with a whole host of Advantages and problems maybe even some of us have a few disorders or neuroses and today let's talk about how to Perhaps improve some of those things What I think you will most like about today's guest Well, one of many things you'll like about today's guest is that although she is a former clinical psychologist She knows what she's doing when it comes to the world of personal finance and financial planning and financial lifestyle design She's actually as you'll hear at the very beginning and just in about 25 seconds she is semi sort of semi retired traveling for a moment at a young age and is quite the financial hacker extraordinaire But she can also teach us a little bit about what to think and how to approach our own thinking process especially with regard to investing enjoy So, dr.

Boyd's welcome to the radical personal finance podcast, I appreciate you being with me today Hello, I've been looking forward to this since you emailed me as a listener and said hey Joshua you know, I might be able to provide some input on the psychological aspects and The I guess I mean you would have far more experience than I but the longer I walk around on this planet the more I realize what a dramatic impact our psychology and understanding of our own psychology has on Just basically everything we do everything we do.

It's hard to get away from isn't it? Yeah Yeah I mean it's been a sort of a major bonus to have done all this training and Psychology for career purposes and then be able to use it personally and there's so many different ways that I that I use it now There's actually in the financial business.

There's a massive move to integrate more of the research and more of the Guess the research that people like you and you're a former clinical psychologist and there are a lot of people who there's a major developing field and fairly developed probably at this point called behavioral finance and I actually love what?

One guy in that field says he says that Here's to the death of behavioral finance meaning that there is no such thing as a special brand of finance it's just finance and it's all driven by behavior and the more we start to understand the Things that influence how we approach I think we can make we can make a lot of progress But I'd like to start if you'd be willing I know that you in your bio you said that you were a former clinical psychologist and you're not currently practicing How did you figure out how to get out of the business?

We're that's that's the type of topic that we're very interested in around here. Yes I mean the way that I ended up finding your Podcast was through the mr. Money mustache blog and Noticing that you're having some guests on who post on that those forums and what happened for us is my my spouse had a had a year off got a year off from work where she was able to take a year out to travel with with the Comfort of knowing that she could go back to her job You know after that year and so we started traveling and during that time.

I got my book contract And we basically at some point realized that we weren't Going backwards with our finances at all that we that the kind of small location Independent income streams that we had and the fact that we were renting out a house back in New Zealand Meant that we were sort of more than covering our costs and that we actually didn't need to go back to work after that After that first year, that's so cool.

How long have you been traveling now? So we live we live New Zealand at the beginning of May 2013 and so My spouse is a medical doctor and doesn't want to kind of give up her Doesn't want to get too out of touch with her skills. So she's just been back in New Zealand for for three months practicing And so that's kind of the plan from from here on and it's just sort of to not work for the bulk of the year and To What to have this small income streams coming in through the bulk of the year But then for her to sort of keep her hand and with her with her work How is she able to?

Do how is she able to work in medicine for only three months of the year and still keep connected? Yeah, it's kind of tricky So she still does all her continuing competence stuff throughout the year and she has You know various things that she needs to do And of course, none of those systems are set up for someone that only work wants to work For part of the year.

So she's figuring all of that stuff out was quite complicated But we did but we did it. Okay, so but it wasn't You're saying that she's back working in order just to do the bare minimum It's not like she has she's able to find a contract for three months She's just going to make sure she stays current.

Is she volunteering or she actually getting paid? She's a she's a GP. So she's a locum. She's a locum GP. So she's working Like a differs a couple of weeks or a month and different different practices. So it's actually quite It's quite convenient from that perspective that she can pick up a few weeks of work or a month of work when other GPs want to go on vacation.

So it works. It works well for that Okay, that that's what that's exactly what I was asking is because that was what I was imagining if somebody who is a general practitioner You know If you if a doctor wants to go on vacation and you've got your client base same thing for a financial advisor If you want to go on vacation, you've got your client base You got to figure out how to serve your clients while you're gone and the trouble I mean it's easier as a financial advisor simply because a you can do some work virtually and be you can schedule most things but if you're a physician and you have a Class of patients.

I mean you got to make sure they're squared away. So very cool. That's it. That's a really neat I Guess career design and you and she your plan to do that long term we have a Five-year plan at the moment So we the plan is to to try out what we're doing for five years and then and then reevaluate things After that point so and as I said, we're already You know, we're I guess almost two years into that five years Very cool.

So let's get to the meat I won't I just I'm always fascinated at people who are taking some of the ideas and the principles and then figuring out how to apply apply them in their own life and One of them that I think is powerful is just simply taking shorter distributed I do you know distributed retirement or just pulling back a little bit working in more of a Ebb and flow type of arrangement than trying to work your whole life like crazy and then retire exhausted when you're too old to do anything Fun.

Yeah, and it's completely fascinating and there are just so many different ways to go about it I love hearing that other people's stories as well You're coming out with a book and it's entitled the anxiety toolkit strategies for fine-tuning your mind and moving past your stuck points and you have some experience with applying that to Finance and to investing I'd love you to start by just sharing with us Where would you begin if I'm nervous if I have anxiety over the topics of money and investing?

Where would you begin in counseling somebody through that? Yeah, so I mean this isn't something that I would have worked with clients about so the types of problems that clients would come To see me for would be would you know wouldn't be this but basically what I found is that so, you know, so many of the same principles apply to apply to investing and and and You know my spouse and I've had to get over we're both kind of anxiety prone and we've had to figure out ways to get over that fear of investing and There are so many different ways that the same concepts apply And there and the investing space you know in terms of looking at the different thinking biases and stuff that that trouble people with anxiety in different areas of their life that also mean that they can hold back from from investing and an effective ways Or could hold back from investing at all.

I just never get started What is it? Why are people anxious? Is it fear of what they don't know? Is it? I mean, what would be some of the reasons why people are anxious in the first place? And then what do you do to help them? Yeah, so a lot of it is it's just it's people's temperament is that they have is So, you know the things that I'm talking about a kind of aimed at people who have a more more anxiety provoked prone temperament So one of the things is that just you know, virtually all of us find losses Really aversive so losing a dollar feels equivalently worse then Then gaining a dollar feels good.

So we all tend to be like that and for anxious people that that tends to be even more pronounced so people with anxiety have Tend to be what they call prevention focused which means that they are Naturally mostly focused on wanting to avoid things going wrong and wanting to avoid making mistakes as opposed to someone who's promotion focused who is more focused on reaching out for new opportunities and reaching out for new rewards and isn't as concerned with Avoiding mistakes and things going wrong So when someone has that kind of natural focus and that natural style it can make it really hard to get started with investing Want to ask you throughout the course of this interview?

I'm gonna ask you some just some about some opinions that I have and I don't know if they're true or not But I'm interested since you are more familiar with the actual literature and the actual research Mentioned just to see if you say I'm right or I'm wrong or set me straight is there such a thing as an anxiety prone temperament and In what I mean is I feel like that was that's probably me I don't I don't know what the triggers that a professional would look for but I remember just being so Nervous and scared about basically anything in life.

I'll give you one example I do a podcast now and so my show is heard by a lot of people and I'm more comfortable with that now But when I was in high school I remember that I specifically didn't want to be either valedictorian or salutatorian of my class because I would have to give a speech and I had a sister who was valedictorian I had two brothers that were I think both of them were salutatorians of their class and I Had been to enough high school graduation speeches And I knew if I was valedictorian or salutatorian, I wouldn't I I would have to give a speech Thankfully I had stiff competition and I graduated I think number four or five So I don't even know if I could have or would have done it But I know that I was just so nervous about the idea of speaking So is that not anxiety and so but yet I've overcome it or is there something that?

Am I not anxiety prone or there are other people who have something that I don't have? Yeah, that's That's very typical for someone that's anxiety proven. So yeah, so it is helpful to think of it as a temperament factor and the difference between an anxiety disorder and being anxiety prone is basically the Definition of having a disorder is that the problem has to be just stressing and or impairing to you So if you are stressing and or what?

Impairing. Okay. I don't know. Is that a clinical word? I'm period accent I MPA Oh impairing Accent. There we go. Forgive me. I might your is not quite tuned Yes, some words are difficult for me to to say in a beer and a beer and quote-unquote American Yeah, we've ruined the English language.

So okay. So that's the that's the that's the differentiation that just because between somebody who's actually has a Clinical disorder versus something that's just a maybe a more normal part of life. Yeah, so like personally I'm incredibly anxiety Prone, but it doesn't get in the way of my life and in any way at all anymore so And we and when you get to that point with with your anxiety It's you know, it starts to feel a lot less A lot it's a lot easier to identify as someone who's anxiety prone when you've when you overcome and it doesn't cause you any problems What about mistake avoidance that was what you just mentioned that you know we have some of us are very prone to just want to avoid the mistake versus Being focused on promotion.

I have a theory about that and I don't know if it's total bunk or not But I think that's probably learned and it's probably learned due to schooling because I don't know I mean, I look at my son. I have a he's almost one and a half He doesn't care a bit about making mistakes He just tries and tries and tries and tries and he fails and he tries and he fails and he trade tries But I look at myself over time, you know through the schooling process of constantly told, you know, this was bad This was wrong and being over corrected Academically, and I wonder if that's not learned.

Do you think it's learned or do you think that that's more of an inherent trait? I think it's a bit of both I think a lot of it as inherent and you know Some of the reasons why it doesn't show up till later will just be you know in terms of brain development that we don't that some of those that That tendency to be self-conscious doesn't develop Till paper and people's brains until they're a wee bit older so that sometimes why you're not seeing it and younger and younger children that tendency to be Concerned with how others perceive you maybe doesn't develop till later So it's a bit of a it's you know, it's certainly learning can play a part, but there's also a big temperament factor Which is why it's important for people to know how to kind of work with their own temperament and to understand that really well So that it doesn't cause them in any problems and so that you can use it to your advantage How would you start to?

Understand what your actual temperament is I have a big chapter in my book So, you know for people that are anxiety prone To kind of understand that but there are you know, just I guess just from from reading around different From You know, sometimes it's not the most useful thing to understand well, there are a few there are a few different aspects of temperament that sometimes people find particularly easy to particularly useful to understand but you've kind of got a But you know just googling temperament factors or that kind of thing won't Often won't be that useful for people.

So, you know some of the different things that that that might be useful Would be more things like Like when it you know at one point that I wanted to touch on was this idea of people to have a fixed mindset versus a fluid mindset so so learning whether you're somebody that is Where you tend to see your capacities as fixed you tend to see that You know that you're not good at math or you're not good at this that now the thing but you are good at these Other stuff and that those things are just kind of inherent traits, you know versus somebody that sees themselves as Being able to improve their capacities through the through effective kinds of practice So like that's something that's kind of useful to people like learning, you know Do I tend to have a fixed mindset about things or do I have a fluid mindset?

so sort of learning about how you are How your temperament actually influences your thinking style? It's kind of more useful sometimes than learning just straight straight about temperament itself Like some of the the temperament factors are things like how easy is it for you to adapt to change? So that's something that people That can be quite useful for people to learn about so You know, are you someone that just reacts negatively or has a big kind of internal reaction to any suggestion about changing plans or Doing or doing something new or you know doesn't like Surprises and kind of naturally has a negative reaction or feels really stirred up When you're out of routine so that's a temperament factor that people that can be quite useful for people to understand but generally people want to kind of Learn more about how they're about their thinking style More so than just this this straight temperament like it's not that useful just know that you're an introvert or an extrovert sometimes Versus you know how that influences the way that you think in the way that you act do you mean by thinking style?

Do you mean learning style like? verbal learner Kinesthetic learner visual learner auditory learner that type of thing or do you mean something different? Yeah, I mean something different I mean stuff like whether you've got that promotion focus or the or a prevention focus like whether you're someone that is Super attuned to avoiding mistakes and losses or whether you're someone that's got a with you someone that tends to Think about have to have negative expectations of how things are going to work out.

So some sort of You know some people just automatically assume that they're going to try something and it's not going to work and learning to balance out those thoughts so that you also think about the So that you also think about the positives or if you're someone that's kind of doesn't think about those negatives as much like learning how you can Kind of train yourself to do that if that's not your natural thinking style Focusing on the loss On the promotion focus or the prevention focus, so I'm interested.

I don't have any idea What where I would fall on that scale myself? I've never done that introspection or taking any tests How what would you ask me to figure to help me figure out whether I'm more prevention focused or promotion focused? Yeah I should say that that one of the researchers who's done some really great work around this is a woman called Heidi Grant Elvison so if people Google her She's got a bunch of like Harvard Business Review articles and things that people are interested in that topic.

They can kind of Look there. But one of the questions that you can use is to Is to to look back at your regrets and ask and and if I see well I kind of what's your biggest regret and if your biggest regret is something that you wish you'd done But didn't do you're probably more provoke promotion focused If your biggest regret is something where you kind of regret making a mistake you're probably more prevention focused, but it's more it's more complicated than that and the The really complicating factor is that some people can be high and both so you can be high and from you can be both high and promotion and in prevention focus and those people tend to have a particularly hard time because they tend to like Have this real conflict would conflict between their accelerator and their brakes So it can you know if you're high and both it can be really useful to understand what you know What's going on for you?

interesting That that does help. I mean just to that question if that's a good starting question that does help because I'm certainly Even when I started radical personal finance It was it was I was I just got to the point where I was more scared of regretting By not doing it then I was of doing it and failing.

I was like well, whatever so I do it and fail You know people fail at things all the time big deal You know I've worked with enough rich people who've been bankrupt that you know I can get through that But you know if I continued doing what I was comfortable with and staying in my comfort zone and missed out on Something that I saw that needed to be done then that was what I feared and what was one of the things that pushed me over the decision Yeah, and what you know one of the things that you said there was really key this idea that you could cope with something that So you're imagining You know a negative scenario.

So You know for something so somebody's big fear might be going bankrupt or something like that And if people can imagine themselves actually being able to cope if that horrible thing happens Like obviously they're gonna do everything that they can and not make silly, you know I'll try and avoid silly decisions that so they're not gonna end up in that Position, but it's really important for people to build to actually think through How they would cope if that worst fear Happens like you know, so whatever your fear might have been for starting the podcast you know, whether it was nobody listening or Getting really negative comments or whatever it is But so people need to identify what their worst fear is and then actually think through how they would cope With that so people that are really high warriors people who have worry disorders Avoid doing that they avoid actually thinking about how they would cope if their fears eventuated interesting, I think I had a bit of a Had a bit of a Advantage of probably anybody else in this regard because I bet you when I started financial planning when I was younger I thought there was a I had the impression that there was a certain thing that I needed to do And I think I probably would have been more on the prevention side Meaning I went to college because I needed you know, I felt like that was what I should do I started putting money in my retirement accounts because that was what I thought I should do and I had read all these charts about the importance of compound interest starting early And so I wanted to make sure I didn't miss out and I wanted to make sure that I was doing what I was supposed To do but then as I started doing financial planning I met with You know over a thousand people from all different walks of life And I recognized that even if somebody started at 45 and was totally broke their life wasn't over and here I was at In my early 20s thinking my life would be over if I was 45 and not rich and here's someone just getting started Again on their financial plan or rebuilding their fortune or trying to figure things out They lost it all and I realized that it was it was okay Not to I guess be perfect from an early age and it really affected my thinking over time But I had the luxury of being exposed to so many people some of whom were winning some of whom were not You know currently experiencing great abundance on all different parts of the scale and that helped me to change my my focus Yeah, and I mean that's one of the you know that for me as well.

That's kind of being A hugely helpful life lesson is to realize that the people are sick who are really successful They often have just succeeded at a heck like really big at a handful of things right, so you look at people that are successful and they'll have tons of of things that that flopped, you know that might might have either been negative or might have just They might have just been like non reward, you know, they started something and it you know, it didn't have any catastrophic Consequences, but I just it was a bit of a non-starter But but most if you look at most successful people they have heaps of things like that And you know, maybe just a handful of things that actually worked out So, how could we teach people?

I know you're probably not supposed to say that one is more positive than another but to me it would seem like it's more useful To be promotion focused than prevention focused. Can we teach people to be that way? It's it's useful to have a balance like it's useful to be able to kind of switch your thinking Just like it's it, you know, it's useful to be able to switch between Optimistic thinking and pessimistic thinking rather than then only have kind of one train of thought It's useful to hold those things in balance.

So There are you know, there are a lot of ways where it's useful to be Prevention focus, you know, it's really useful to be prevention focus, you know things like getting you're getting car insurance or health insurance all those kinds of things where that's super important, but It's important not to you know, just not to fall too heavily on on one side of the spectrum That's true that makes a lot of sense because it is certainly, you know as a financial planner I've learned to be optimistic and focus on the good and Funny try to so yeah, there's very interesting relationship.

I mean you would maybe I don't know. Maybe it's something like you experienced when you were in in private practice, but where you are one on one hand motivating and inspiring and trying to hold a vision of what can be in front of your client and on the other hand you're trying to pick All kinds of holes in the plan and then make them slightly uncomfortable with you know Well, if you don't cover this if you don't like you said if you don't buy car insurance If you don't buy life insurance, if you don't diversify your portfolio, then doom and destruction could be coming your way So that's the strange Balance of the two.

Yeah, it is a strange balance sometimes but it is a you know It's kind of like an ongoing project of trying to trying to get that balance And to get that balance right or as right as you possibly can With regard to investing one of the things that we in the financial business struggle over is how to help our clients have more confidence with their investing decisions and We do these investment profile questionnaires because also when you are an investment advisor and I'm not anymore But I was you it's a tremendous responsibility to help somebody choose a portfolio And so that's why we have the you know, people make fun of them But the investor profile questionnaires that that we've developed to try to understand how a person thinks and the trouble is that we usually have to be more defensive than Offensive we have to be more loss prevention focused rather than ultimate gain focused and the reason is because clients feel the loss far more Heavily than they do the gain and so in essence the investment profile questionnaire We can almost never go more Let's just stick with aggressive as a word even though it's not a very great It's not a very great descriptor of what you're actually doing in a portfolio, but we can almost never go more aggressive than How a client answers these questions because we have to have something external to help us not Apply our comfort level with investing onto a client's comfort level But I've always tried to figure out how do I help a client to become more comfortable with investing?

So that they can reap some of the greater rewards. Do you have any tools or strategies or tips that would help? Yeah, so so one of the one of the things that is kind of coming back to that idea of a fixed versus fluid mindset That I talked about earlier.

So a lot of people had this idea I'm not good at investing and I can't get good at it I guess this fixed thing that they're not good at and I mean one of the things is to is to think about the ways that you're that you're actually Sort of the Wizard of Oz principle like like how did you have that all along?

Like in what ways are you good at investing already that you might not even be recognizing as it as investing So like, you know even things isn't as you know As simple as things like you invest in ingredients to cook meals or you're investing but you know Buy a car or a bike that gets to that gets you to work that allows you to generate income So looking at the different looking at investing more holistically rather than just in terms of are you good at plunking money in the stock market like looking at the different?

you know, so the person can start to See the ways that they might actually already be comfortable with investing and some spheres of their life and also the person can you know can start thinking about return on investment and and in different kinds of ways like thinking about that in a really flexible way, so it might be something like You know investing in and LED light bulbs and you're in your house and actually running the numbers and seeing The return on investment of of that and which you know, which luck You know, what are your most frequently used lights and how long do you plan to stay in your home and those kinds of things?

or things like investing time and like, you know your time and your labor into a project that's going to generate return and might be something like It might be something like learning about travel hacking and applying for credit cards that have signup bonuses and things like that or Like one sort of random thing that I do is I buy like gift cards online at a discount So like and I don't go to Home Depot and just use my credit card I buy I go online and buy like a Home Depot gift card that's selling it like, you know, nine or ten percent off Because I see that it's you know, if it's spending I was definitely gonna do it's a return on it's a return on investment so just kind of starting to think about About investing more more holistically and Learning that you can you know, you can develop competence and confidence through You know all of those different kinds of methods as well The big thing is is really avoidance so, you know you mentioned like in your example about the Valedictorian so one of the like really striking Issues with Franchise people is this avoidance coping?

So in the heart the harder that you the longer that you avoid something the harder it becomes to do it So the other yeah, you know, the other big thing in terms of developing confidence is this idea that you that you develop? Confidence and competence from doing that you don't kind of you the idea is not to wait Until you feel confident to do something.

The idea is that you're going to gain confidence from doing it So the your behavior influences your thoughts and feelings And in some ways that link From behavior to thoughts and feelings as it's even stronger than the influence of thoughts and feelings on behavior If that is not too hard to imagine it is I mean, it's not too hard to imagine it.

It's useful one of the things I love about podcasting as a medium is I can go back and many podcasters or even writers will often leave their original episodes or their original articles or the original essays live and So you can go back and you can see what did they sound like when they first sat down in front of a microphone?

And I've often wished I don't know who is a great and famous radio announcer in New Zealand But in the US I often think of someone like Rush Limbaugh has the most widely listened to radio show And I often wish I could go back and hear, you know His first shows from the 80s to see what he sounded like because it was probably the most awful You know most awful unpolished thing ever but that gives me hope and confidence that just by doing more than I can by doing I can I can Get better and I've noticed this one of the things in financial planning where I've seen this is I've never seen a successful I've never seen a person start in the financial services business and wind up Being financially successful at it who wasn't willing just to go out and do stuff and just to learn learn through doing Rather than spend all kinds of time trying to think about how do I get it better?

there is it is important to think about things but some things you got to learn by doing and That's one of the things character qualities I wish to teach others and model just get in and roll your sleeves up and you're gonna learn and then You can deal with deal with things as it goes along is that that's along the lines of what you're talking about, right?

Yeah, that's exactly what I'm talking about. So I mean one of the hard things with investing is that you know, there's there's You know, not even Warren Buffett does investing perfectly So if you know if you sort of like anxious and a perfectionist you're often, you know you often find people are just doing like a ton of research or Either they they do a ton of research and don't take any action Or they just completely give up because they feel like they're never gonna be able to figure out how to do it perfectly And it is just one of those areas where there is no, you know, there is no perfectly We all you know We all wish that we could you know buy it the the absolute bottom of the market and sell at the absolute top But that just isn't you know, that isn't gonna happen.

So it is Something that if you've got a tendency to react to things that you can't do perfectly right out of the gate By kind of doing nothing then you're gonna end up doing, you know, nothing or doing things that are suboptimal I'll give two other examples from investing.

I think people often have fear excuse me often have fear of investing in something new for example a new type of investing and One example would be something like real estate. I Really respect and admire Two writers on a real estate John Reed and John shop and a big thing they focus on both of them in their books is Here's a little bit of theory.

Here's what you need to know now You must commit within X, you know number of months that you are going to locate and buy your first property Because of all the real estate investors I know here locally that I've spoken with who've bought and sold dozens if not hundreds of properties It all started with just getting over the fear in the first one and it probably wasn't a very good deal But you've got to get over the fear of okay I'm not gonna get a great a great deal and recognize I'm just gonna get it done and Once I've gone through it once the first time even if I lose money at least I learned and I got over the fear I remember another example in my own life when I was younger I was schooled in the and basically indoctrinated in the popular finance approach that the only suitable asset you know class for people to invest in was stocks and bonds and And maybe some real estate and then I started reading about things like gold things like just alternative you know hedge funds different things and I realized that I was scared to go and buy a Goal to buy gold coins.

And so I remember forcing myself to say Joshua This is stupid this you are being an intellectual Imbecile if you're just sitting here because you're scared to do something that you've been indoctrinated against and so I forced myself to find a gold Dealer walk in plunk down my money and buy a 1/10 ounce gold coin and I walked out.

I'm like wow I survived And just breaking that barrier to say, all right I've made it I'm now one of those weird people who owns a gold coin now I can look at this a little bit more rationally and try to understand how this market is moving as compared to this other market and I can gain control.

So I've had to force myself to do it in the topic of investing Yeah, and and you just the way that you take in and process information is so different Once you once you're in the doing stage of something versus the they're just thinking about it's it's stage Okay, it really you know, the best way to accelerate your thoughts is to to start acting the best way to have new thoughts and you've Creativity and you know and all of that is to start taking some some action if you've been sitting on the sidelines with for too long And I'm definitely not Someone that believes in the idea that you should you know Kind of make this you should have negative experiences on purpose like that That's somehow, you know character building or well, you know I do think that you should do everything that you can to you know to try and make a profit on that first house that You buy and to try to try it, you know to try and You know Especially in terms of catastrophes to try and and not have those happen and do you know take sensible steps and that kind of thing but Yeah, it's there's something incredibly liberating about About making a mistake and realizing that or having a negative outcome to something and realizing that you that you coped with it and that it You know, one of the things that happened to me was that I was beginning into travel hacking quite a lot lately And I applied for a credit card and they and they declined me and it was the most liberating everything ever I've never been to class never in my whole life paid a seat I'm one of those people that's never never in my whole life paid a cent of interest on a credit card So that you know, like I've no history of ever been declined for a financial product, but you know, obviously being sort of new to the US that I He had pretty limited history here, but it was like, okay so that it was like finding the limit I was like, okay That's the limit of what I can of what I can do here.

I've just hit the limit It was so liberating to have that happen. You know, it was embarrassing like for the first for a day I felt embarrassed but then I felt completely liberated by it That's such a such a great example and it's so funny how we take these things so seriously That fear of getting declined for a credit card or that fear of a transaction not going through I can remember Recently I signed up for my wife and I she doesn't like big-box stores, but finally I convinced her I said listen, let's try it So we signed up for Sam's Club and we went down and I needed needed to shop We needed we needed to buy some stuff.

So we signed up for Sam's Club and I went there It was our inaugural purchase and the thing with Sam's Club. They don't accept credit cards. They only accept debit cards or cash and So I knew in advance that that was going to be the case and I had made sure that there was plenty of money in The primary checking account everything good to go and I had two carts worth of stuff that I was buying and it was a I Mean the bill was I think eight or nine hundred dollars something like that and I get there and my card is declined and They had swiped two carts full of stuff I mean it had taken a long time for this to go through and there's a big line behind me So all of a sudden I just start sweating bullets.

Wait, I know there's money in the account I host a financial advice podcast I'm not I'm not over drawing my account but just this intense like wave of fear like oh These people are all judging me. So I tried the other card. I think it's discover card is the one they accept now declined So I'm saying oh man, how much cash do I have in my in my wallet?

I was able to work it out and it since it was such a large purchase for the first time the for the first time at the store the My debit card and credit card company had just simply blocked the transaction and I was able to call them and get it worked out but man, I was literally sweating at the shame and the fear of Me having to go and take my two carts that I had spent hours loading and put everything back on the shelves Yeah, and and new experiences, you know that often go like that, right?

You know was the first time that you've that you've gone to Sam's Club and you know that It's so often your element Yeah, the first time you do something there's this unexpected blip with it and that's what people with you know It's it's so there's a you know There's a difference between trying to avoid a catastrophe trying to avoid like losing a lot of money or trying to avoid getting stuck And something that you you know Some kind of bad scheme that you can't get out of you should work really hard to avoid catastrophes but those kinds of Negative experiences that are really just emotional.

They're really just a bit embarrassing or a bit awkward So, you know the the people that that do well are the people that are willing to tolerate those feelings So there's a big kind of literature you know big sort of research literature around the fact that that people that People are a lot more successful in their lives if they're able to tolerate a degree of discomfort you Know exactly the kind of example that you're talking about Do you think is that something that can be intentionally trained that we can intentionally train ourselves to be comfortable with discomfort Yeah, yeah, so it's much absolutely and it's much more about Like learning as you just as you say learning to be comfortable with discomfort than it is trying to eliminate all sources of discomfort from your life, but there's you know been a big shift and And in psychology towards that idea that That that comfort with discomfort is just a hugely valuable Psychological skill or willingness to tolerate discomfort as hugely as hugely valuable I mean you think about all the things that people would avoid if they weren't willing to so I know a lot of people that Really avoid the phone so that they would they really don't want to bring customer service you know, they don't want to ring around and get different quotes for their insurance or they don't want to have different trades people come over and get you know quotes from three three trades people for a job that they need done in their home or That they they'll just avoid those things and you can just say how the people that are willing to go through Those experiences where they feel a bit awkward like asking, you know asking for a raise or negotiating a salary or those kinds of things like the Cumulative effects of being willing to tolerate that small moment of discomfort just like over a lifetime They just let they leave the person so much better off Yeah as a parent I think about this As one of the most valuable things I can do for my kids and I'm thankful that my parents did it for me When we grew up We grew up camping all around the u.s and the thing I love about camping is it forces you into just these awful circumstances sometimes and You're just stuck in the car and it's been all day and you're driving across Kansas and you have 400 miles to go and if you've never driven across Kansas someday you will and you'll understand But it's just a long day in the car and you're sick and tired of it and you're upset and you're cranky and you're grouchy And then it's an amazing opportunity to learn to control your attitude and to not let your attitude be affected by the circumstances around you or You get rained out or you get hot or something like that It's just that was one of the tools that my parents used to to bring discomfort into our lives And we had a great time and there's all kinds of peak experiences as well But the discomfort is so valuable and I look at what a great gain We can how how how well we can serve young people if we give them opportunities to be uncomfortable While they're young so they can learn to control their attitude learn to control their emotions learn to control their feelings about it While it's you know while they're young rather than having to be 43 years old and all of a sudden Blowing up at somebody because they've treated you unkindly or because they've been short with you Far better to learn that when you're young For sure So as we start to wrap up here is Is there anything else on any other ideas that you have or other thoughts that you have that would be helpful to listeners who are?

Working to overcome and tame their anxiety Yeah, so I mean there are a few like just little sort of tips and tricks that people can use one of the you know specifically about investing one of the things that people can find quite helpful sometimes is to Write a letter from their future self back to their current self.

So we often feel like Like our future self like a you know that the self we're gonna be and you know 20 or 30 years time as almost like a different person from from our current self So sometimes it feels like the consequences of either You know making good financial decisions or not so good ones are gonna be almost Experienced by someone else rather than by you just an older version of you So one so one thing people can do is like, you know, maybe write a letter Back to the back to their current self from there, you know, they're 20 years older version of themselves You know saying thanks for going through that that thanks for going through those initial Stages where you really didn't feel like you were you knew what you were doing or thanks for going You know staying the course when there was that downturn in the market you felt like point, you know yanking all your money out all those kinds of things to try and sort of bridge that gap from your current current self to your future self so that they start feel so it starts feeling like all these good things that you're gonna be doing are actually the benefits are actually gonna be Experienced by you at some point in the future and not like some different completely different person.

It's a great idea I could probably be applied to far more than just finance That can be applied to what we eat and how we move and how we live our lives Yeah, and I mean the other thing is You know is to I guess to make a plan So, you know one of the things that sort of I found useful and thinking about my own like asset allocation and things was to you know to Look back and actually see like if I had that allocation back in you know 2008 2009 what would have happened to my investments and like how would I have handled that and thinking about you know, if you You want to understand what your own worry is?

like as you as you were concerned that you're gonna yank your money out of your investments if there's a If there's a downturn or as you're concerned that you're gonna maybe not yank your money out, but you're gonna not keep You're not gonna keep you contribute contributions up or kind of looking at different scenarios of From what you know about your own behavioral patterns and your own thought patterns What you know what you might be inclined to do and coming up with like an actual behavioral plan for what you do in that Situation like who would you talk to what sort of data would you look at?

Before you before you did something rash You know, those those are you know Those are a few options for what somebody could do, you know, it's it's being pessimistic and being somebody that That that thinks about what could go wrong is not a negative thing that's a you know, that's my natural temperament and you know used to probably feel a little bit and Ashamed of that being my natural temperament or like people would you know tell me to be more more more relaxed or more happy-go-lucky or those kinds of things and What I've kind of learned about myself and what you know It's true for a lot of other anxious people is that they actually feel better when they're when they're prepared for Things that could go wrong And there are ways that you can do that that are actually useful Versus and there are ways that are not useful like, you know Just doing continually doing research on a topic But never getting to the point where you feel like your plant you like your plan is perfect enough as obviously not useful whereas having like a you know, a three-point plan for what you're going to do if some Concerning thing happens is As a as far more useful I can give two practical examples from the world of financial planning of ways that I See in ways that I've learned to apply exactly what you said You said make a plan and then make a plan for being prepared when things go wrong on the making a plan thing I see that as a primary foundation of a good investment strategy is to decide in advance What your course of action is going to be?

when Circumstances happen so whether and and this would vary depending on your You know your style of investing so some people might be having a very active trading style of investing and they say and they're putting in place and they're saying well if If this company that I'm investing in if the share price moves by this percent, that's my trigger to sell The key is having that written down and on paper in black and white So that when you're in the midst of the emotion you can go back and you can look at your plan And of course, you can always change your plan But at least force yourself to be accountable and say I'm changing my plan because of this new information that I didn't have before and make sure that you're not just simply changing your plan because now you're feeling the fear or the euphoria of Whatever phase you are in a market cycle, and I think this will force you to understand your plan So that would be it could be applied by an active Trader or it could be applied.

Let's say that somebody is following a very consistent buy and hold Style of investing in this scenario then I know that my plan is to do absolutely nothing and I know that over time that will work out because The over the majority of the time my investments will increase in value and there will always be massive gut-wrenching temporary anomalies, so if I own a Portfolio of index funds then I know when the market drops by 30% I will do nothing and because I've thought it through ahead of time I know I'm not gonna change anything and then if you if that makes you uncomfortable Then with that with that thought because some people in the audience are saying absolutely and some people are squirming like how could you ever do?

That if that makes you uncomfortable, then you know, you've got the wrong investment plan You know that you're not going to be comfortable going through that. So you need a different plan that's gonna suit your natural personality As far as actual the how to apply it. I think it can be applied on the portfolio perspective But the powerful tool that I hear a few people talk about is what I call financial planning Which is how can I put some some planning in place so that I'm prepared if things go wrong in my investment portfolio?

Example would be this let's assume that I have all of my invested in all of my money invested in the general you know stock market and it's 2008 and all of my money is there and I lose my job and my wife loses her job Well all of a sudden and we don't have any savings.

That would be a key thing. Well all of a sudden I'm gonna be freaking out when my portfolio is down 30% and I've lost my job But these are these might be disconnected things or they might be connected The key is to be able to differentiate from them So I need to think of that in advance and I need to say what do I what am I going to do?

If that happens, well, it would be wise for me to have savings have assets that aren't in market If I know I'm gonna be freaking out maybe I would lower my debt burden or eliminate my debt so that I can be more Comfortable in that scenario. Maybe I will make sure that my portfolio is balanced in such a way But I'm gonna think through that in advance and then by thinking through it I can put some planning things in place today because I'm not smart enough to know exactly when the market as a general whole made up of millions and millions of people the collective actions of millions of people all of Whom are making their own individual decisions about when to buy and when to sell and what to do I'm not smart enough to predict the actions of millions of people But I can look at my life and I can plan and say if this happens then I need this in place if that happens then I need this other thing in place and that can alleviate the anxiety of What happened?

you know how of That can alleviate my anxiety if certain events happen because I've thought them through in advance and I know what I would do Yeah, I mean what I mean one of the points that I would make is that I That there may not mean if for somebody there may not be a plan So this idea that that that if you feel uncomfortable, it's the wrong plan that there are for someone That's anxiety prone who's very, you know, very conscious of any kinds of losses or you know, any kinds of mistakes they might not there might not be any version of a plan where they feel a sense of of Comfort with with you know with losses and it's I guess, you know thinking about you know What would feeling what would feeling uncomfortable feel like and what's the sort of what's the level of?

Discomfort and what types of discomfort are you able to tolerate? You know this is trying to sort of you know, especially the the And when I say American way, but like I mean sort of the way the Western world is this idea that we that we want to Avoid all all sources of discomfort and you know You were saying before about that the importance of not doing that so there might not be a version that feels that feels comfortable but Sort of separating that out and thinking what's the right?

You know, what are the what are the the right things to do? regardless of how comfortable or uncomfortable it feels and For somebody that's very anxious That might be what they need to do because they might if they spend their whole time searching for something that feels comfortable They might never ever get started because there's no perfect thing that actually makes them feel completely comfortable and even and people learning that like that even Even when you're doing the right thing There are there can be these moments of massive discomfort and learning sort of through experience that that's not in this you know that those That those anxiety feelings are not some are often false alarms are often just about the fact that you're doing something new Rather than them being kind of real Alarms telling you that you're doing the wrong thing.

I See your point It makes sense It's hard to know where that line is though because I've served I've turned away people and I've simply said listen You should not be investing in public and trade of securities Like there are some people who they can't you know, the fact of being out of control entrepreneurs as an example Many entrepreneurs thrive on this sense of control and for them.

They're just gonna make bad bad decisions And so I've often just thought you know, you're better off investing in this different this other type of thing You're better off investing in private businesses. You're better off investing in real estate You're better off investing but then to someone else who is comfortable with that you're better off, you know investing in public and trade of securities and it's always it's a challenge to figure out where that line is because I think that The whole reason why It's why it's tough because I think that both of those things are absolutely true There is no such thing as the elimination of risk.

There's no such thing as perfect safety It doesn't exist. But yet we do I think our temperament is important Yeah And how to how to meet it but not how to be a slave to it just because you know I'm not gonna invest in this type of investment because I just don't I'm scared of it I don't want to learn anything about it.

Well, that's probably not a useful character trait recognize your temperament But also recognize that you can learn something about it and you can be you can feel more confident with education Yeah, no, I mean, I absolutely agree with what you what you're saying there what I'm kind of particularly talking about as the as the person who's very anxious and Can and there's no version that makes them feel completely comfortable.

There's not starting a business. There's not investing in real estate There's not having you know 50% of their asset allocation and bonds that all of those things make them feel nervous So if you're one of those people with all of those things that make you feel nervous, you know You you want to go with that you do you want to find that the the thing about them saying?

Yeah, the best diet is the diet that you'll stick to right right about so it's kind of working. I Absolutely agree with what you're saying that it's really important to understand your Understand your temperament but also be really and it's really important that if you're somebody that when nothing makes you feel comfortable to pick something Any other tips on your list or anything else that you want to mention that would be useful to the audience Maybe Figuring out what kind of monitoring works best for you.

I think it's kind of an important part of an investing plan as well How do you like? so with a Checking in on your portfolio once a month is useful or getting email alerts when there's some kind of you know Change in the market like setting up alerts you know that if you know the Stock price drop drops by a certain amount that you know And you that's on sale and you want to buy some or just kind of figuring figuring that out I think that that can be quite important that people who are anxious tend to either over monitor or under monitor So kind of figuring figuring that out is important And I'd also just say, you know Really think it kind of coming back to that idea of thinking about this holistically like thinking about your whole money picture really whole so that you know working on the things that feel possible for you, so if you know if things like Reducing expenses by you know, making those customer service calls to get to get your insurance rates down or those kinds of things or asking for a raise or Like doing all of that seeing all of those things that you do to improve your money picture is sort of part of the same Goal of becoming of developing your confidence and incompetence and in the money arena and that you can start You know wherever you feel able to start with those types of things Yeah, the comfort level with a calculator to calculate the unit price at the store is no different than the comfort level of sitting down and Calculating what you believe to be the intrinsic value of coca-cola There's a few more numbers involved, but the steps are the same and so getting used to that method of thinking I think can Can really be a valuable?

education Anything else on your list? I Thank you for coming on I love having professionals like you in the audience because it helps me to well I love it I love it because I can air some of my wacky ideas and then be set straight or Kind of feel good about wow.

I came to that accidentally and And here is a little bit of external external corroboration. When does your book come out? It comes out much the third. So yeah Exactly a month from when we're taping this. Okay. Yeah, so we're recording on February the 3rd This will probably go out either this week or next So it kids is available now for pre-order if any on Amazon or anything like that Yep, so it's available in both paperback and Kindle version on Amazon and will be available in all the usual places That books are sold and go ahead and just give us a quick a quick advertisement on it as far as what's in it What's it about who it would be a good fit for?

Yep. So it's called the anxiety toolkit And it's really practical it covers Discrimination so over over thinking about things like, you know when you get stuck on You know Maybe you have an awkward conversation with somebody and then it sort of sticks in your mind and fun find yourself sort of lying awake At night thinking about it or driving home in the car thinking about it It covers hesitating too long before making decisions covers perfectionism Covers avoidance coping it's aimed at It's intended to be helpful both for people who have actual anxiety disorders, but more so people Who have an anxious thinking style who might want to learn about their thinking and behavioral patterns a bit more How cool that you can do your book tour while you're traveling?

And work with I would assume you've got kind of a book launch strategy and lining up the media How cool that you can be on the road? Enjoying a location independent lifestyle and still write and publish your book and do the publicity. What a cool world we live in Yeah, it's a very cool world.

I know you have a website Alice boys calm Anywhere else that you want people to know about you? Yeah, the Alice boys calm one is as a as one that I had for my practice So that's not very active at the moment the the two places that I am That I'm more active the book website, which is the anxiety toolkit Calm and also my blog for psychology today calm So I wrote my I wrote a blog on my own site up until about 2012 and then all my new articles since then are on my blog for psychology today calm Very cool.

I'll make sure that those are on here. Those are listed in the show notes. Dr. Boys I appreciate you making time to come on. Good luck safe travels to you. Thank you Perhaps I shouldn't try to do therapy for myself right live on the air But hey, it's not every day you get a former clinical psychologist to talk to you And sometimes it's nice to learn a little bit about something about yourself, isn't it?

At least I enjoy that after all it's one of the reasons why I do the show the way that I do it I get to learn something I'm not an expert in everything. I'm an expert in maybe just a couple of things But the rest of the time I'm just interested and a little bit of introspection and knowing yourself even as dr Boys emphasize can be so so useful So thank you so much as we go today.

I'm gonna read a couple of iTunes reviews And if you enjoy the show or if you hate the show, you wouldn't be here at that point But if you enjoy the show, please leave an iTunes review and make sure that you're subscribed in iTunes That is so so helpful super super helpful when you do that That it just helps it helps the rankings.

It helps all of that stuff. So let's go with Joe's review He says knowledge is power one of the best podcast outs Podcasts out there for anyone looking to learn more about personal finance Joshua educates on topics that can have an impact on your finances and life He knows this stuff isn't trying to sell anything dives deep into most topics while also being easy to listen to highly recommended Thank you, Joe.

I am gonna sell stuff in the future. I just got to create it first And I am selling you my ideas every day So I love I love selling and it's one of my favorite things to do and so I am selling stuff I just don't have enough stuff to sell Let's see stammer here says fantastic podcast of all the personal finance podcasts Joshua's radical personal finance is the most in-depth and valuable.

I've come across just an absolute treasure trove of information and insight Thank you so much, Joshua. I learned something new every time I listen. Thank you. I appreciate that That means a lot. By the way, some of you who are listening in other countries. I I see your reviews.

I haven't forgotten about them What happens is I don't have a system where they automatically show up in my inbox Where I keep these ones that I'm gonna read on the show, which is all the US based ones So thank you. I saw a review from Finland a bunch of reviews from Canada Thank you to each and every one of you who's leaving me those reviews.

I really really appreciate it That's it. Be back with you all tomorrow. Have a great day Thank you for listening to today's show if you'd like to contact me personally My email address is Joshua at radical personal finance comm You can also connect with the show on twitter at radical PF and at facebook.com slash radical personal finance This show is intended to provide entertainment education and financial enlightenment But your situation is unique and I cannot deliver any actionable advice without knowing anything about you please Develop a team of professional advisors who you find to be caring competent and Trustworthy and consult them because they are the ones who can understand your specific needs your specific goals and provide specific answers to your questions I've done my absolute best to be clear and accurate in today's show But I'm one person and I make mistakes if you spot a mistake in something I've said please help me by coming to the show page and commenting so we can all learn together Until tomorrow.

Thanks for being here Unwrap the holiday savings at Citadel outlets shop the early access Black Friday sales for the best deals of the season The all-night shopping party starts Thanksgiving night at 8 p.m Visit Citadel outlets comm for more information