So excited to introduce Paula Pant. She has an amazing podcast called Afford Anything. And she actually filmed and recorded several of the sessions of her podcast at this conference with some people who were speakers at this conference. Her podcast has had 30 million downloads, which is a lot. If you look at the top-ranked investment podcasts, because I do, because I have an investment podcast, Paula is usually toward the top.

She is a leading light of the FIRE movement. Many of you saw her in the session yesterday, the panel discussion. She's a former newspaper reporter, but she's also an alumnus of the Knight-Bagehot Fellowship in Business and Economic Journalism at Columbia University, a very, very prestigious fellowship. And we are so excited to have her speak to us today.

Paula has a presentation for you, and then we're going to take some questions from all of you. So if you have questions for Paula, you can put them on the cards. Paula, come on up. Thank you. I'd like to start by showing you a very short video. This is only 17 seconds, so blink and you'll miss it.

But it's a 17-second video that illustrates what I love about coming to a Bogleheads conference, what I love about a weekend like this. Let's take it away. Ready to fight. And this is the only room where people understand that. So what's wonderful about a conference like this is that we can spend the weekend debating Roth versus trad and talking about how to optimize, if you should execute Roth conversions, and how and when.

And we can talk about optimization. And we enjoy those conversations. But the core idea that we have learned from Jack Bogle is that at the end of the day, particularly if you're in the accumulation stage, money is not that complicated. To be directionally accurate, as Jack Bogle has taught us all, low-cost, buy-and-hold index funds, ideally in a tax-advantaged account when appropriate.

Oh, thank you. Hey, look at that. Ideally in a tax-advantaged account when appropriate. Focus on making bigger contributions to the extent that you can. And if you do that, you directionally are in the right place. And then we can later talk about optimizing. And we can talk about particularly when you get to decumulation and withdrawal.

But it's not rocket surgery. And I chose that, by the way. I chose this not rocket surgery specifically because I knew that this is an audience that has a lot of physicians and also at least one person, Bill Behnken, who is a former rocket scientist. Two people, two people, former rocket scientists.

So many of you have done or either are in or have been in professions that are very complicated and that are very high stakes. And what we've learned from Jack Bogle is that the simplest course of action is often the best. Don't try to beat the market. Meet the market.

Be the market. We also know that the answers are out there, particularly within this community. The answers are often abundant if we take the time to look for them. But it can be easy, particularly with a deluge of information. It can be easy to just ignore all of the answers and to end up doing things in a way that's a little bit harder.

And so the question in my mind was, why? Why is it that often we contradict our own investment thesis? Oftentimes-- and I will raise my own hand. I am guilty of this. I sometimes make money moves that are against my own better judgment. I know better, but I will sometimes take that ill-thought-out, risky, proverbial water cooler investment on a lark.

Or I will not make as many contributions as I know I should. It's the financial equivalent of eating that second slice of chocolate cake, or the third slice, or the fourth slice. You know better. We absolutely know better, and yet we do it anyway. So why? And what it comes down to, the answer to that why, is that we have been led to believe that money management is simply tactical.

It's all about numbers. It's all about spreadsheets. It's the hands. That money management comes from our hands, meaning tactics, logistics. But in reality, it isn't tactical. It's emotional. It's psychological. If you think head, heart, hands, it's our cognitive biases in our head, and it's our psychological realities in our heart that influence what we do with our hands.

And so the reason that we often make decisions that go against our own investment thesis, that go against our better judgment, is because we often get in our own way. Our behaviors are suboptimal. And largely, that's because we are either anxious, we are avoidant, or we are obsessed. And so what I want to talk about today are each of these three.

And by the way, I want to give credit. These ideas very much draw from the research of Dr. Brad Klontz, who is a financial psychologist. He actually formed four money mindsets, but I condensed them into these three. But anxious, obsessed, and avoidant. And we see this not only in ourselves, but we see in the way that life imitates art, and art imitates life.

We see depictions of this in traditional media. I know social media gets a lot of-- when we talk about money, social media gets a lot of finger pointing at it. But there's a lot that we can see in traditional media as well that illustrates some dysfunctional relationships with money.

And since sometimes it's hard to read the label when you're inside the jar, it's easier to recognize behavior when it's presented as an archetype or as a character type on others, I'm going to walk through a few examples that we see in popular media of dysfunctional relationships with money so that we can see the ways in which that mirrors in ourselves.

We'll start with-- oh, go back one. We'll start with feeling anxious about money. And the clear example of this is Ebenezer Scrooge, the fictional character from A Christmas Carol. Ebenezer Scrooge had a lot of money but was so cheap that he would not even heat his own office. And he made his employees shiver inside of their office.

And what I like about this example is that oftentimes there's this myth that to be quote unquote "good at money," you simply don't spend. That being good at money means being frugal. But Ebenezer Scrooge is a great fictional example of how that idea, taken to its extreme, becomes dysfunctional.

It becomes antisocial. It becomes counterproductive. This is a guy who neither he could not enjoy his money, nor could he use his money as an expression of his values. He didn't even know what his values were. That's the entire plot line of A Christmas Carol, is revealing to him what matters and why values ought to be the North Star.

And then money can be the physical manifestation of his direction towards that North Star. And you'll notice his catchphrase, "Fah Humbug." When did he say that? He said that any time that he was presented with the proposal to spend some money. His answer, "Fah Humbug," was his way of deriding or dismissing the idea that he spend a little bit of money to make the lives of the people around him better.

And so here's someone who is wealthy, but anxious about money, miserly. Now, another example, and this is a different type of anxiety about money, Monica Geller from Friends. So Monica, and the reason I wanted to highlight both of them is because these are very different types of financial anxiety, right?

Scrooge was cheap. Monica isn't cheap towards her friends. You know, she's a good friend. That's the name of the show, after all. But Monica was just very anxious all the time. She, I mean, didn't have a catchphrase per se, but she would often, at multiple times during the show, she would say, "Oh, do you know how much these things cost?" as her way of expressing a little bit of stress around money.

And over the, I don't know how familiar you are with Friends, over the span of the show, she ended up in a fairly good financial situation. In the beginning, she was kind of working lower-paying jobs, and she had a little bit of career insecurity, but then towards the end, she had a great job, she was happy in it, she was making good money, but she was always anxious.

And that anxiety would come out in the way that she fixated on costs. It's a different form of money obsession, which we're gonna talk about next. It's this pervasive scarcity mindset that says, "I'm not sure that more money "is going to come my way, and therefore, "I feel the need to clutch onto every penny." Monica wasn't, she's not Scrooge.

She isn't cheap towards her friends, but she is anxious. And so, to the extent that either of those characters can show a mirror, what are the ways in which we feel anxiety, even when external circumstances do not warrant that worry? That's the question to reflect on. What are the ways in which old scripts, old behaviors, memories of times in the past when we might not have had enough, what are the ways in which that has stayed with us, even though our actual financial reality today is quite different, but the scars from back when we had less remain, and therefore, those dysfunctional relationships with money also remain.

Those are the questions to ask yourself as we look at some of these characters. All right, let's move to money obsession. This is my favorite. Montgomery Burns from The Simpsons. Now, his catchphrase, "Excellent." When does he say that? He says it when he is harming others in order to make more money.

That's when he says the word, "Excellent." There is an episode in which, so Montgomery Burns, for those who aren't quite as familiar with the topic, he is, in The Simpsons, the owner of Springfield's nuclear power plant and the boss of Homer Simpson. And there is an episode in which he literally blocks out the sun from Springfield in order to force the residents of Springfield to buy more energy from his power plant.

There is an episode where he dumps all of this nuclear waste into the river and then the river springs up a bunch of three-eyed fishes. He famously has a bunch of hound dogs at his mansion and one of his other big catchphrases is, "Release the hounds." And so anytime that anybody does something that displeases him, he just releases a pack of angry dogs at them.

So he is the proverbial obsessed with money, obsessed with making more, but also incredibly isolated and lonely. He doesn't have any friends. He has an employee who is very devoted, but no real friends whatsoever. And so he stands as a, not just a character, but really a caricature, an extreme caricature of someone who has lost the plot, someone who forgot that money is a means to an end and has hyper-focused on simply the money itself and has forgotten the fact that money is supposed to be a tool that allows and facilitates for better relationships, a better impact on your community, for all of the pro-social things that it can do.

Another person who's obsessed with money, and this is a different type of character, Tywin Lannister from Game of Thrones. He is, for those of you who are not familiar with this show, he is, on the surface, appears to be a family man. Because he really is devoted to the Lannister family and he wants the Lannister family to succeed.

So, on the surface, almost looks as though he's doing the right things. And again, one of his favorite phrases, which he repeats often, is, "A Lannister always pays his debts." And on the surface, that sounds great. You pay your debts, wonderful. That's great, we should all pay our debts.

But under the hood, he is someone who actually is chasing status. The reason that a Lannister always pays his debts is because that's how he maintains power and status and control. The reason that he wants his family to succeed is because he wants the ego gratification of the Lannister name to continue on, but he doesn't actually care about the individual members of his family.

And without spoiling anything in the show, his obsession with the Lannister name actually ends up driving a wedge between him and his children. It actually ends up, ironically, harming his relationships with the very legacy, the very offspring that he purports to want to help. And so here's another person who, on the surface, appears to care about his legacy, but actually destroys the underlying relationships within his legacy in an effort to make his name prominent.

And these are two examples of money obsession. And it's really, it's an obsession with status at the expense of relationships. And then we move to avoidance. And you might think, all right, well, we're at a conference about money, so clearly we're not avoidant. Clearly, that can't be an issue that plagues any of us.

But, and I'll speak for myself, there are certainly elements of my financial life that I pay close attention to, and elements of my financial life that I don't really want to think about, right? In the broad scope of overall financial planning, there are parts that are more interesting than others.

And so it can be entirely possible to be a good steward of your money in certain domains, but also avoidant about your money in other very specific domains. So a couple of examples of people who are avoidant of money. So this is Ron Weasley from Harry Potter. And he is very dismissive of anything that seems to relate to money.

He calls it rubbish. He seems a little bit intimidated by it. And money avoidance largely stems from, again, a similar thing to money anxiety, there is this sense of scarcity. There's this worry that money might go away. And so we don't want to think about it because it triggers this fear.

Another avoidant person actually is Homer Simpson. And I chose this photo intentionally because Homer often has, how many of you are Simpsons fans here? Excellent. Homer often has these get-rich-quick schemes that he's chasing. So he has had across the span of the show, I think 400 different side hustles that he's chased.

He's always looking for a quick buck, as you can see in this photo. But he actually doesn't do anything to try to learn about money, to grow his investments. He is, even though he's constantly chasing get-rich-quick schemes, he's avoidant. And that also stems from the scarcity mindset of I'm afraid that money might not be there.

I worry that I myself am not taking care of it well enough. I kind of want somebody else to do it for me. Let me chase these get-rich-quick schemes. All of that can play into ways that we are avoidant. Maybe not with our entire financial lives, but maybe with specific elements of it.

So money anxiety, money obsession, and money avoidance. Those are all ways in which we can sometimes get in our own way and sometimes do things that are counterproductive. And so the major lesson that I want to impart is to take a look at some of these examples. You know, and in the way that life imitates art and art imitates life, ask yourself what resonates.

You know, maybe not, obviously you're not a caricature, but what elements of those pieces resonate with specific areas of your life, even micro areas of your life? You know, how do you see these things showing up in you? And then, how can you overcome that so that you can get out of your own way?

Thank you. (audience applauding) - Thank you, Paula, that was fantastic. So we've just gotten a few questions so far. If you have questions for Paula, please do put them on a card and there'll be someone walking around collecting them. Here's a great question. The person is curious if you have resources for, or strategies for couples who are of two different types, e.g.

the avoidant, married, the obsessed person, or the anxious is partnered, or the parent of an avoidant. So tactics for relationships where you have different personalities. - Oh, that's an excellent, excellent question. Now I can't say excellent anymore without excellent, excellent question. So if one person is avoidant, what I would do, I would start not with the money itself, which is a tool, but rather with a vision that you want to co-create together.

So what is the ultimate end game, what is the goal? Maybe as a couple, the two of you really want to retire at a certain age, but why? Like retire and then do what? Maybe you want to travel more, maybe you want to spend more time with your grandkids.

Like be very, very clear on what that end goal is because especially to somebody who's an avoidant, money might sound like a solution looking for a problem. The point of paying attention to money is not necessarily immediately clear to somebody who's avoidant, but the point of getting out of a job that you dislike and spending more time traveling and hanging out with your kids or grandkids, that's immediately clear.

So you start with that end goal and then work together on working backwards from that end goal to show how money is a resource that facilitates the end goal. But you keep the end goal as the focus and money is sort of as a tool that facilitates that. - I have a question about the avoidant and whether people who are inert, who just don't do anything because they're busy, are they also avoidant or can you just be too busy to get into this stuff asking for a friend?

(laughing) - Well, the great thing about low cost buy and hold index fund investing is it doesn't actually take that much time. - True. - And so again, it goes back to the 80/20 of it being directionally, particularly if you're in the accumulation phase, being directionally on the right track is, if you follow the Bogleheads philosophy, very relatively simple.

Low fee, index funds, good asset allocation, good asset location, rebalance periodically, and you're done. - Great. Here's a good question. If one of these characteristics helped you be successful, but they no longer serve you, what suggestions do you have to enact change to serve you better going forward? - Ooh, which character?

Was it Tywin Lannister? There's an expression, what got you here won't get you there. So oftentimes there are strategies that we take on that are helpful in a given context, but that become even counterproductive in a different context. So let's look at money anxiety, for example. Maybe being Monica Geller and being hyper fixating on every penny at a time when you just don't have that many pennies, that can be very, very advantageous.

Being ultra, ultra, ultra frugal, being that Monica Geller character can be very advantageous when you don't have a lot, but as you get more and more money, your time becomes more valuable, and then you end up underselling your time for what is not very, relative to where you are now, not very much money.

And so what I would suggest doing is think of every resource at your disposal, not just your money, but your time, your energy, your focus, your attention, all of which are related but different. Think of each of those as limited resources, and you're trading each one limited resource for another.

And so your goal is to figure out what is the right trade-off of time with money. - I think this is a related question, Paula. You mentioned the sense of scarcity can linger long after one's circumstances have improved. Do you have any guidance or steps one can use to get over the sense of scarcity and the attendant anxiety?

- Yeah, that's a hard one. I struggle with this one a lot. Again, it comes back to really placing a high value, not just on your time, because it's easy to lie to yourself about your own time. It's easy to be like, "I'm quitting sleep, I'm done, "I'm giving it up." It's so easy to lie to yourself about your time.

I think it's harder to lie to yourself about your focus, your mental concentration, 'cause even if you push yourself to stay awake later or to wake up earlier, at a certain point, you just can't focus anymore. Everything kind of turns blurry, and then you end up, people blame social media, but before social media, people still built those paperclip chains.

People still built paperclip chains. People still stared vacantly out the window or at the ceiling. That preexisted Instagram. What I would do is really try to be a capital allocator of your concentration, because that focus and concentration is maybe the most limited thing that we have. - And how do you capital allocate your concentration?

Do you have any tips on that front? - It's a matter of, I write things out with paper and pen. Here's everything that is in my brain dump, here's everything that's in my brain, here's everything that could be going on, and then I just, with paper and pen, I start ranking.

The reason I do it with paper and pen is I know that if I open a screen, I'm immediately gonna be like, oh, look, cat videos. (laughing) And so paper and pen eliminates that distraction. - What is the name of the financial psychologist you mentioned? - Oh, Dr. Brad Klontz, K-L-O-N-T-Z.

- How do you view real estate investing as part of your financial life and profession? I know it's part of what you've done to become financially independent, so talk about that. - Yeah, for me, it's one of many things that I have invested in, so I invest in index funds, I invest in real estate.

What's interesting to me is in terms of the attention that the real estate component of my portfolio gets, and I should say my portfolio is about 50% real estate, 50% public market investments, and those market investments, personally, I hold all equities, I don't have bonds, but I have a barbell allocation, equities, and cash.

So my portfolio is 50% market investments, 50% real estate currently, and then there's a tiny sprinkling of individual stocks, but that's, I don't know, a small percentage. What's interesting to me about real estate is that it's tangible, it's visceral, it's discreet, and it's a little bit different than the norm, and so that tends to get, I think, not an undue amount, it may have maybe an undue amount of attention, perhaps because of its tangibility, whereas fewer people ask me about my index funds because, like, big whoop, everybody's got index funds, even though I actually have them in equal proportion in my portfolio.

So I view, personally, I view real estate as the fixed income portion of my portfolio, which is the reason that I don't have a bond allocation. So in that regard, I guess I have maybe a bit of a overly conservative portfolio because if I'm viewing real estate as fixed income, then that means, functionally, I'm 50% equities, 50% fixed income, which would be conservative at my age.

- What should people know, I mean, what should they be cut out for in order to have real estate as a, like, tangible real estate as part of their portfolios? What characteristics should people have before they do that? - So I think that, number one, don't do it if your reason for doing it is FOMO.

Like, if your reason for doing it is, well, everyone on TikTok is doing it, that's a bad reason. Do it if you have what I call minimum viable curiosity. And so what I mean by that is, you know when you were a kid and you were in elementary school and there were all these subjects, there was reading, there was history, there's chemistry, there's biology, there's, you know, math, yeah.

And there are certain subjects that you were, maybe there was one or two subjects that you loved and one or two that you hated, and then a few that you had, like, kind of a passing curiosity in, and there's a kernel of interest that could be developed there. You want, for real estate, you want at least that, you know?

If you have zero interest in it and you're doing it only because you feel a sense of FOMO, that's the wrong reason. But if there is that minimum curiosity and you're like, hm, yeah, no, I'm curious to know, I'd like to learn more, this engages my interest just as much as that history class engaged my interest.

Okay, then pursue it, then follow that curiosity, because what I have discovered is that the more I learn about something, the more I realize how little I know, which then fuels my curiosity and my desire to learn more, and then that becomes a self-perpetuating learning cycle. - Why do you think real estate investing has gotten so popular?

When I look, again, back to the top podcasts, half of them are about investing in real estate. What is it about this moment that has people so intrigued about that? - You know, I do think that the tangibility of it, it feels real. I think that's part of the reason why, in general, at any given time, that's an evergreen reason, but as an evergreen reason, I think at any given time, people are drawn to real estate because of the fact that you can see it, you can hear the floorboards creak, you can smell the paint dry.

That feeling of realness, the fact that it engages all five senses, particularly in an increasingly digital world, it becomes emotionally evocative, and things that are emotionally evocative tend to be psychologically sticky. I also think, particularly at this moment in history, where we have just had such high inflation, periods of high inflation, we know that tangible assets, art, gold, real estate, that's where people put their money in high inflationary periods, and so it makes sense, particularly now, coming out of a very high inflationary period, and coming out of that huge real estate run-up in 2020, 2021, that people are chasing returns and chasing an inflation protection.

- This person says, "Great talk. "This was so great. "You talked about the three mindsets, "but all of them were negative. "What is the right mindset? "What are the healthy monthly habits "that we should all follow?" - I would say that the quote-unquote right mindset, the healthy mindset, is one in which your money is a reflection of your values, so you treat your money as a physical manifestation of your values and your priorities, and you have an awareness of how your cognitive biases and your psychological fears, insecurities, hang-ups are playing a role in your decision-making.

We can never get rid of that. That's never gonna go away. We're not like, you don't wake up one morning and you're like, "I'm healed now, all done, check." That is always there. It's simply a matter of learning to recognize it and learning to not let it control you.

Fear never disappears. You just get better at seeing it for what it is. - So this question, I'm hoping the person who asked it can help clarify. What do you make of Susie Orman's pronouncement that those with only two million for retirement will burn up alive? (panelists laughing) - Are you familiar with this, Paula?

- Oh, yes. (panelists laughing) Okay, this person is referring to a 2018 interview that I did on my podcast in which Susie Orman came on the "Afford Anything" podcast and my opening question was, "What do you think of the fire movement?" And her response was, "I hate it, I hate it, I hate it.

"And let me tell you why." And then she went on to explain that unless you had a minimum of five to $10 million, you could never retire. But strangely, that applied only to early retirees and not to traditional age 65 plus retirees for reasons that she could not explain.

I tried to press her on. I was like, "Wait a minute. "So I can retire at 55 with 10 million "but at 65 with two million? "Can you math that out for me?" You know, and she couldn't. So what do I think of that pronouncement? I mean, there were a few things going on there.

Number one, she was defining retirement as the complete permanent irrevocable cessation of all income, which is a very rigid definition of the word retirement, and it leaves no room for any type of part-time income, any type of flexibility. It played to one thing that was going on a lot in 2018, which was this very semantic debate about the word retirement.

So I like to, particularly for early retirees, I like to kind of avoid the word retirement because then we get into, you know, the internet retirement police, you know, who sit there and like they finger, "Well, you did that consulting gig. "Therefore, you're not retired." You know, like it gets into this semantic debate that then becomes a distraction from the overall point, which is let's have enough money that you are more or less gonna be okay and that work pretty much becomes optional, you know?

So I think that was one of the things that was going on and her dramatic pronouncement kind of highlighted the disconnect within that semantic debate. As to the actual claim that you can't retire with less than 10 million, I mean, the math is pretty clear that you can. So, I mean, there's just no justification for the fact that you need 10 million to retire.

- Well, Paula, we have been so happy to have you here with us today. Thank you so much for joining us. (audience applauding)