2150: Empowered Investor Cruise! Train Your Brain to Notice: How to See the World with Fresh Eyes with Cass Sunstein

Welcome to the show. This is Jason Hartman, your host. And every 10th episode we do something kind of special, kind of different. What we do is we go off topic. So regardless of which show it is on the Hartman Media Network, whether it be one of the financial shows, economics, real estate, investing, travel, longevity, all of the other topics that we have, every 10th episode we go off topic and we explore something of general interest, something of general life, success, value. And so many of our listeners around the world in 164 countries have absolutely loved our 10th episode shows. So that's what we're going to do today and let's go ahead and get to our guest with a special 10th episode show. And of course, on the next episode we'll, we'll be back to our regular programming. Here we go.

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The last few months have affirmed something you said years ago that was just so, so true, and I don't think people appreciated it at the time, is that the mortgage is an asset. But now, given where interest rates are now, to think, oh man, I got this sub 3% mortgage, why would I ever, ever, ever sell? It's tremendous. It's much more valuable than the house itself.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants, and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now, here's your host, Jason Hartman with the complete solution for real estate investors.

It is my pleasure to welcome Cass Sunstein to the show and he is the author of many, many books, including the one we're going to talk about today, which is entitled Look Again, the Power of Noticing what Was Always There. So, Cass, welcome. How are you?

I'm great. Thank you so much for having me.

Good. It's good to have you on. Tell us a little bit about your body of work, if you would, and then let's dive in deep to the book.

Okay? Well, my body of work has too many pages and it has too many words and it has too many volumes. That's what I'd say. But I've enjoyed every single one.

Yeah, good, good stuff. So noticing what was always there. Tell us about that, if you would.

Okay. So the basic idea is fundamental to our species and actually every species is habituation. Which means that people really show decreasing sensitivity to stimuli. Which means if you go into cold ocean, maybe in Florida, the first minute is going to be really awful unless you're insensitive to cold. But the 10th minute will be completely fine and you'll be asking your friends to come on in. If you go into a room that has smoke in the first minute, you might think, why have I gone into this smoky room? But after about 20 minutes, you will show decreasing sensitivity. On a vacation, the first day is going to be good. The second day is going to be really, really good. And it's going to be amazing thereafter. That's because people habituate to the wonderfulness of vacations. And this is true for money, by the way. It's true for investments, it's true for everything.

Yeah, you know, I guess the positive side, it's not really positive, but your last example about vacation, you know, it reminds me of something I talk about a lot, which is hedonic adjustments and how we just sort of become accustomed and our expectations get higher, ever higher and higher. So that's something we need to guard against because it really precludes the idea of gratitude, which is an important factor in life. Right.

Okay, that's great. So let's think of hedonic adjustment as being specified by the idea of habituation. So let's suppose you have a leg that doesn't work and the first month is really terrible. You can't run anymore. But after a while you will show hedonic adjustment. And the negative effect of a leg that doesn't work on your well being will be a lot less than you anticipate. Or suppose that you gain a ton of money and you have a really nice place to live and the economic situation you're experiencing is something that would have thrilled you two years ago. And now after a while, that's basically life. One problem is habituation can make us too immersed really into the amazingness of our lives. So the things that we should be thrilled by and astounded by are things that we are just kind of nodding to. And I love your point about gratitude, because the gratitude works when it does is that it dis. Habituates. It takes us away from the thing that we're Immersed in. And we say, how did I get so lucky? As to now, the idea of gratitude rituals is a little too sentimental for my personal taste. But they really work. And the reason they work is exactly what you said, that they take adaptation to what we are experiencing and put a barrier between those things and us.

Yeah, absolutely. And you know, I might be making a mistake here, but as you speak and you know, I look at the information about the book, I sort of want to place a value judgment on it and that might be a mistake or maybe it's a good thing, I'm not sure. But in some ways this is good. Right? Because progress would involve us getting to one plateau and then expecting more and expecting more. And that makes us move forward. Right. But also it can keep us from being grateful for what we have. So how do we kind of reconcile this cast?

Okay, that's fantastic. So I'd say the main theme of the book is science. My co author is a neuroscientist and I play a scientist on tv, though I'm a lawyer keenly interested in scientific facts. So the main question is with respect to things that are fantastically good, let's say a nice house, a nice relationship, the fact that we're not starving, how can we come to a big smile or a big sigh of relief that those things we happen to get lucky enough? And how can we disabituate to things that are bad, like let's say cruelty at work or inefficiency at work, or let's say something that's not going so great in our town, people tend to habituate to these things and that's not so great. A lack of freedom, people can habituate to a lack of economic opportunity, people can habituate to. And how can we just habituate? These are kind of scientific questions. On the value question, you're completely right that habituation, let's say to something that's really good so that we're not amazed by it anymore, can make us search for something different and even better. So if you're thrilled by your entry level job for, let's say 70 years and you retire at 90 in your entry level job, that's probably not a full life to get spurred by the, let's say, tedium that habituation produces is a very good thing. With respect to the balance, I think we've given dis habituation short shrift and that the evolutionarily mandatory phenomenon of habituation is. Is something against which we should take a somewhat tongue in cheek stand, saying that all of us need to disabituate and be able to see the pixie dust on the things we've taken for granted that are positive. And all of us need to dis. Habituate so we can see things that aren't so wonderful. Even, let's suppose in sunny climes or even in amazing Massachusetts where I'm right now, to see things that are not so good for what they are and not as the furniture of our lives.

Yeah, that's, that's great point. So it makes me wonder, you know, and I don't know if you discussed this, but is this a survival mechanism in some way? Did we evolve this way for a reason? You know, is there, tell us about a theory on that?

Okay, completely. So let's take your great, great, great, great ancestors who happen to be mine too. So we're related. Hi cousin. And that's because our, our ancestors were not as cult. They didn't speak, they could swim. And our ancestors were extremely attentive to change. They'd start swimming really fast. If things were constant or changing slowly, they'd say stationary. Those are unicellular organisms that are all of our ancestors. And that's evolutionarily a good thing. Because if you are a unicellular organism or if you're, let's say in ancient times in a hunter gatherer society, if things are constant or staying slowly, there's no surprise signal. Ste, it's okay. But if you just hear instead a roar of an elephant or see a shadow of a predator, then the surprise signal kicks into the brain and you run. And that suggests that there's limited mental bandwidth for knowing what to do in a moment. And if something is novel on the scene, that surprise signal our brain offers us is extremely adaptive. If we didn't have the surprise signal, or if we had the surprise signal all the time, things would go, as they say, south. Yeah.

You know, I remember learning a long, long time ago about the, you know, maybe this is more your co authors area, but about the reticular activating system, you know, and that's the, the system in our brain that keeps out the trivial information. Right. And makes us focus on, hopefully on what's important. Right. You know, we've got to have a filter because there's way too much stimulation coming in all the time. And you know, folks listening, it's very easy to just do this experiment, just sit outdoors ideally sometime and just really listen. There's a lot more sound, especially in a place like Florida where you've got birds and insects and Everything here, you know, there's a lot more going on than you're paying attention to. I remember. And this maybe speaks to the gratitude thing. One day I was messaging someone when I lived in Scottsdale, Arizona. I was messaging one of my remote workers in Canada, and she lived in Alberta. It was a voice message. And she said, oh, wow, that's so nice to hear all the birds chirping in the background, Jason. And I thought, I'm not even paying attention to the birds chirping. I didn't even notice them. But she noticed because it's the deathly cold of winter where she is right, no birds. But in Arizona we had the birds. So this filtering mechanism is what you were alluding to. Can you tell us more about that and how to use it better?

Yeah. So that's an incredibly perfect example where if you're hearing birds all the time, you might even not hear birds at all. And if you hear the birds not at all, and then hear the chirping, you might think, that's really nice. Where is that coming from? That's perfect. Let's talk about the brain in a moment, and let's just start kind of more qualitative that if you are hearing things in your room that are steady or constant, and I have a little, I think a heater on right now, but I didn't notice it except for our exchange just now, actually notice it at all. My brain is filtering it out because, and this is evolutionarily a very good thing, my limited, my case, very limited mental capacity is being directed to our conversation and not to sounds that I'm used to. And therefore I needn't be concerned about the focus we have in our book. And that I would place here is on the amygdala, which is a part of the brain that fires when there's emotional arousal. And that means that the amygdala might be triggered, for example, by a taboo or by a threat. And I'll give you an example from our own research done by, in this case, by my co author, Tali Sharat, that if people are incentivized to lie in a setting where lying is kind of remunerative, they'll get funny. If they lie, they will lie, people will lie. But for their first lie, the amygdala in the brain is firing. It's issuing a loud, no, we don't lie. And people are agitated by that. But as the day goes on, the amygdala starts to quiet. And then that red light it's giving inside the human Brain starts to turn yellow and then green. By the end of the day, the amygdala is saying, okay, I guess we lie. And the weakening of the amygdala's reaction is associated with more and bigger lies. This is a lab experiment, but it's suggestive of your point about filtering in, filtering out, though it's going after the part of the brain that filters in saying, attend attention.

And that will quiet if the behavior is repeated. Which means that there will be decreasing sensitivity. The spheres on risk taking, by the way, economic, otherwise, where people take a lot of risks, after a while it's just not registering for them. And that can be good if they're risk with high expected values, but they can be not so good if they're losing more and more money.

You know, it kind of simplistic, maybe cliche on that is that people who lie all the time just believe their own lies after a while. And that sort of speaks to that, I think. Right. That it just gets easier to just lie more and more. Right.

Okay, that's great. And as you said it, my initial reaction was that the phenomenon of lying all the time is weakening of the moral. Let's say taboo in the head because of habituation. But I think what you said is actually deeply true. And let's go at it from another stream of research church. It's called the illusory truth effect, where if you hear. I hadn't thought of this, by the way, until you said it though. So particular. Thanks. Though the illusory truth effect is in our book. The illusory truth effect means if you hear a lie a couple of times, you tend to believe it. It's a very powerful effect where if people hear something said twice. Let's say Tom Brady is the second greatest quarterback of all time. That's because Patrick Mahomes has passed him, which means he's the second greatest. I just lied twice. I'm a big Tom Brady fan. Mahomes is fantastic. He's not there. But having said it twice, people who listen to it, sorry, everybody will have a part of their mind that says maybe Mahomes has passed Brady. And that's a phenomenon. Lie twice or more. People find it easier to process it. The surprise signal is isn't going off anymore. Tend to believe it's true. Which is why I think that what you said is right. If people lie a lot, it's often said they tend to believe their own lies. Why would that be? We now have what in my mind is a novel account, because people lie A couple of times are showing the illusory truth effect with respect to own statement. They've said it and heard it a few times, so they believe it, which is welcome to humanity. We easier truthier.

Yeah. You keep making me think of depositions and legal proceedings and courtroom testimony. Because I think part of it, Cass, might be that the. Once the person speaks the lie and the world didn't end or they didn't get called out on it, they just kind of keep doing it right. You know, and it's pretty. Pretty interesting stuff.

And their own moral horror benefits that. I mean, I had a friend a number of years ago who cheated on his taxes, and the fact that he cheated on his taxes surprised me. The fact that he talked a lot about cheating on his taxes shot not a good idea. Well, it was a little. Not prudent. But the fact that he talked so much about it was, I think, a product of exactly what you said, that he did it a lot. And. And the signal in his brain that this is morally not a good idea as well as a very.

Yeah. So he was like he had habituated not only to lying, but to lying to the government. Yeah.

Wow, that's. That's risky. You know, the IRS has a whistleblower rewards, folks. So don't be bragging about lying on your taxes if you're gonna do it, but don't brag about it.

So, you know, taxes, it's almost tax day. Honesty.

Exactly. Exactly. So, Cass, one area that I think this maybe changes for all of us is over the course of many years in our lives. You know, certainly the idea of a midlife crisis. Right. We've all heard that movies have been made about it, books have been written about it, countless marriages have ended because of it. Both men and women have midlife crises. Men, I think it's maybe more noticeable because they buy a sports car. Certainly both parties do. How does this play into that concept of different sort of decades of our lives, if you will?

Okay, great. So suppose we projected on a screen a cloud of colors and put in the middle something like a fixation point, something you could look at. It might be like a T or something, and you ask people to stare at the T. What will happen? This was discovered by a European a long, long time ago. What will happen is the colors will start to turn gray. And it's shocking. If you're really good at it, the colors will turn white. And this is in our book, the display of the visual Illusion. That means you stop seeing colors if your head doesn't move. And that's a metaphor for midlife crisis, where it seems to be, the data suggests happening all over the world. Not like newly necessarily. We don't know that, but we know it's happening all over the world. Happens at different ages, sometimes in some countries, 40s and some 50s and some 60s. And a hypothesis about why it happens is that when you. Let's say you're 50 something, you have a good job or a decent job, and your family is your family, and you have a place to live, you're not on the streets, and the colors have turned gray, you don't see colors anymore. And that is the kind of phenomenology of the midlife crisis where the sports car guy or the romantically inclined married woman maybe, or guy, they are seeing gray and they need colors. And that's suggestive that while people really care about having a happy life, they want their life to have meaning. They also need their life to have color. And there are ways of getting color without having a crisis. But people sometimes go into crisis because the only color they see is gray.

Before I let you go, Cass, please tell us how we can be better at seeing colors and looking at life through new eyes. And as I have grown from living in poverty as a child, pret. To being very successful as an adult, you know, I'm noticing that about myself, you know, nothing really, like, amazes me anymore. And if you think of that great Andrew Lloyd Webber piece in Evita, you know, nothing can thrill you, nothing fulfills you. Maybe that's not from Evita, but anyway, one Andrew Lloyd Webber piece. It's really good lyric because it speaks to that, how do we value the world? I mean, after I read Walden by Thoreau, you know, that made me really try to appreciate more of these just little things that just happen all around us that we don't. I don't appreciate normally. Well, at least I didn't.

No, completely. So a hero of mine is Julia Roberts. Not only because she's really good actor, but she was interviewed a while back and said, what's your perfect day? And she said, I get up and I make breakfast for my kids, and then I get ready for lunch, and I can have lunch with someone I like, and then I get ready to get my kids, and then she stops herself. She says, it's boring. But because of my job, I'm an actor. I go away for weeks and I come back and it's surrounded by pixie dust. It resparkles. So the. The point is, for people like you and Me, you know, if you're doing well, and obviously you are, I'm. I'm out of an office and I have a job and not struggling, but to see things that are. Well, I'm struggling with my new book, but in general not struggling. You. You can have the pixie dust or the resparkling. If you take some kind of break. Now, it can be a literal break or it can be a psychological break. You know, when you wake up from a dre, you lost your job or something terrible happened. I had one last night, by the way. I had a job about some health problem, a dream, a bad dream. And then I woke up. And I didn't just think it's so lucky that I'm good at health. I felt it. And to dis habituate imaginatively or literally by taking breaks that can bring colors back.

Yeah, I think that's very, very good advice. Cas. Before we wrap it up, are there any questions I didn't ask you or anything you just want to share with the audience on either this book or any of other work?

That's fantastic. Thank you. And thank you for the completely amazing questions. I'm very grateful. I guess I'd ask. Question I ask is, what's your favorite chapter of the book? And I would say my favorite chapter of the book involves vacations and the fact that 43 hours in is the high point of the vacation.

43 hours, okay.

That's the magic point. And that's because after 43 hours, the colors are a little less bright, the champagne is a little less amazing, the hotel room is a little less surreal. And that tells us something about a challenge we all face and also an opportunity we all face to be in a place that's good or very good or beautiful. It's those things even when we've stopped noticing. And let's make a pact to have that 43 hour period where we're going to be.

Yeah, that's. That's great advice. Great advice, Cass. Give out your website. The book is available in all the usual places as well as all your other books. Do you have a website you want to share?

Well, my favorite website is the Social Science Research Network. Isn't it everybody's favorite website?

And if you put my name in it, which right now is Cass Sunstein, and I expect that's what it's going to remain. You'll find all sorts of papers, only 80% of which are boring.

Yeah.

I love it. That's very funny. Good stuff. Well, Cass Sunstein, thank you so much for joining us today.

Thank you. Great pleasure.

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