Hal Hershfield: Your Future Self (Season 3, Episode 8)

Welcome to Take the Long View with Matt Hall. This podcast reframes the way you think about your money, emotion, and time. The goal? Helping you put the odds of long-term success on your side. Hey, before we get started, I just want to let you know there are a number of great reviews about this podcast on iTunes, and I would love it if you would give an authentic review too. Now, Now, if I were really good, I would know how to help you magically end up in the review section of iTunes, but I don't know how to do that, so you'll have to do a little work. Go into your podcast app and figure it out, but I hope you can and I hope you will because I think it makes a difference for potential listeners. Okay, next, I may have found my person. No, not romantically found my person. I mean someone who actually does the research that is connected to the mission of this podcast. He's just as obsessed as I am with helping people make better long-term decisions. In fact, he said, "My research asks, how can we help move people from who they are now to who they'll be in the future in a way that maximizes well-being?" Hmm, that's a quote from today's guest, psychologist Hal Hirschfield. As suggested in the opening quote, Professor Hirschfield's research concentrates on the psychology of long-term decision-making and how time affects people's lives. Perfect given the purpose of this podcast and the fact that Americans are living longer and saving less. One of Hirschfield's most well-known discoveries suggests that when people are confronted with their future selves, they experience an emotional sense of connection that can influence long-term financial and ethical decision-making. Hal Hirschfield is a big deal. He's marketing behavioral decision-making and psychology professor at UCLA's Anderson School of Management. And Hall publishes in top academic journals and contributes op-eds for the New York Times, Harvard Business Review, and the Wall Street Journal. He earned his PhD from Stanford University and his undergraduate from Tufts. And when he isn't teaching— and oh, by the way, he's received big awards for teaching, not to mention he was named one of the 40 most outstanding business school professors under 40. This is a few years back, but by a group called Poets and Quants. What a great name for a group. But when he isn't researching or writing or teaching, he is collaborating and consulting with successful businesses, often in the financial industry. Hal, welcome to Take the Long View with Matt Hall.

Hey, thanks so much, Matt. It's a pleasure to be here.

Let's start with a, a big question.

Sure.

How did you decide to dedicate your professional life to helping people make better long-term decisions? Where did this original inspiration to commit yourself to this line of work come from?

I love that question. When you look back, you want to have some sort of common theme and a thread and say like, well, I, you know, when I was 19, I knew this is exactly what I wanted to do. But of course, you know, I assume I'm like a lot of people that when I look back, there's a bunch of twists and turns along the way. And I feel in a way like I've kind of fallen into this and it's something that I love, probably to some extent in a very practical way. When I was in graduate school, I was studying the psychology of time right around the time when the financial crisis happened. And, you know, I was always interested in how people think about themselves over time and how people think about the past and how they try to essentially capture the past and form memories and project that into the future and these sort of deep psychological questions that were exciting to ask as an undergrad. And, you know, when you have the time to sort of think about these things, but When I got practical with some of these questions, it really led me into thinking about what sort of decisions can we make that really can take into account who we are at the core and who we want to be and how we can really sort of balance things out over time. And that, that it's admittedly kind of an abstract question, but 2008 rolls around, financial crisis, and you start seeing all these people with decisions they've made and decisions that others have made that have really impacted their lives in a profoundly negative way. And I wanted to know, how can we prevent things like this? How can we help people make these choices that will allow them possibly to avoid some of that pain and on the flip side maximize some of the, the positives? So that's like my kind of abstract but true answer.

Well, you're known for, or at least I think one of the most important insights you seem to be connected to, is this notion of understanding and connecting to our future selves. And I've been thinking a lot about this as I've read your work and prepared for our discussion. And I must admit, I hardly feel like I know my present self. I'm working on that. I'm working on that elusive objective even now. But I think one of the core takeaways as I've read your work is we have to feel some sort of connection to our future self, because if it's vague and abstract, the whole idea doesn't really work. And I want to know, and maybe this is a great place for us to jump in, is how do you think you can help us figure out how to better understand or connect with the future self?

Let me pick out two things there. So first off, I have to say, I used to think this is simply a matter of, you know, thinking more about your future self, considering that future self more. And, you know, you said something that really resonated with me, which is this idea, you know, do I even know my current self, who I am now? And I think as, as we get older, as we sort of progress through life, you start realizing what you know and what you don't know. And my opinion over the years has changed a bit to recognize that in some ways we can never fully know our future self because we can't anticipate all the things that will change. And in all the ways that our preferences will, will be shaped by external forces that we can't predict. So I kind of want to move away from the idea that, you know, it's a simple case of just getting to know our future selves, but rather, I think the question of how can we bond with our future selves becomes a deeper one of how can we think in deeper ways about what will happen to us as time unfolds and how our certain preferences and attitudes may remain the same and how certain other ones may change and be altered. And in what ways can we at least start having conversations with our future selves to promote— I was going to say better decisions now, but it's, it's really promote decisions now that will result in more positive outcomes over time, both now and in the future. You know, I think that to me is the trickiest nut to crack because it's not just, you know, how can we make people save more and, you know, go get a higher percentage of their paycheck? That's a big part of it. Right. But that's not going to be great if they're miserable now. Right. So it's always going to be about that balance there.

But let's go to the practical level.

Yeah, sure.

So your work suggests that if there is a connection between my present self and my future self, I may start to make decisions that contribute to the success of the future self.

I think it's really useful to start from the perspective that our future self might be considered as if it's another person. And when you take that lens, that analogy, if you will, then you can start to say, all right, fine, well, how can we promote stronger bonds with other people in our lives? How do we, how do we create situations where we empathize with them? And, you know, of course, one of the things we know is we can make the targets of our empathy more vivid, because vividness is emotional, and emotional examples drives behavior.

Wait, hang on. I think that sentence is so important. We got to say it twice. We got to do what Oprah would do, which is like say it twice. Vivid images are emotional, and emotion is what drives behavior.

Exactly. Wow. Exactly.

So you want to create a vivid image of this future self. I assume technology could do this for us, like we could all do that sort of simulation thing, maybe?

Of course. You know, and I think this is, you know, some of my earlier work we did just that, right? We've shown people what they'll look like in the future. And I laugh now looking at some of the things we did 10 years ago because they're so clearly inferior to the stuff you can do today in like a, you know, snap of your fingers on your phone. Right here where I am in LA, there's companies associated with Hollywood that can age-progress people's faces in ways you can't even imagine. And the beauty of that sort of intervention or that sort of exercise is that it is so vivid. and it creates this real concrete image to attach to when we're thinking about the future, or when we're thinking about our future selves. Now, we've tested these images out in different research studies, finding that when people are exposed to these images or confronted with them, as you said earlier, people are more willing to make sacrifices for the long term. And, you know, we've, we've just wrapped up a study looking at this sort of intervention in the field, the large bank in Mexico, finding that consumers who were shown images of their future selves were a little bit more likely to make a contribution to their personal pensions, which is like a 401. You know, I actually think it's important not to overstate the power of these things, right? This is, in a way, this is like one tool. To come back to what you were saying, right, the, you know, vividness and emotion. This is a specific tool that gets at vividness, but it's not saying that it's the only way. You know, I think that part of what I'm interested in exploring is What other ways can we get people to really create and conjure up more vivid images of their future selves? Can it be through letter writing exercises? Can it be through imaginary conversations? You know, I've heard of financial advisors engaging what they call the two-chair method, where you, you have a table and you have two chairs, and you have your clients sit at one chair, and the opposite chair, there's no one there, but they're supposed to be their future self, and they talk, and then they switch seats. And then they sit in the seat of their future self and they talk back to their current self. And it, it sounds a little, a little strange to do in a client advisor meeting, but I love the idea of it because it, it really heightens the concreteness and the vividness of a future self there.

You know, going the other direction, we had a company event about an hour away from where our office is, and I wasn't far from the home that I lived in in high school. And I thought, you know, I'm never this close to this place. I'm gonna drive through this small town in Southern Illinois and just see how that street feels. And I parked my car and I got out of the car and just kind of walked up and down the street. And it felt so funny to go back in time. And the thing that struck me was the person who lived there, he didn't know anything. Like, I didn't know anything about what this future self would become. And yet, in some ways, like, there are core things that haven't changed, but there is a lot that you couldn't predict or plan for. And I thought, like, what would I say, like, if I were going back in time and talking to— I saw that person, like, 17-year-old kid walking down the street, and what would I say? And what kind of guidance would I provide? And it's the same kind of thing I've tried to wrestle with with this future self conversation, because the future is weirder than I think we can predict or imagine. It's really challenging.

You know, when I went back for my 20-year high school reunion, I had so many of those same thoughts, you know, because I walked around and I, I saw people I hadn't seen in forever. And I, I kept thinking about, you know, the kid that was here, he's not me. And then yet at the same time, he's re— he really is me. And what sort of things would I say to him? And then to me, what I thought was so interesting about that sort of interplay was trying to project it forward and say, The feelings I'm having right now about, you know, who I was in theory are going to be no different than the ones I'll have in 20 years, 30 years from now, looking back to now. And it's mind-blowing to think that I might look back on this time and say, he didn't really know, you know, what did he know and what didn't he know? And so, you know, to think about those conversations across time. Yeah, because we've really— I, in my career, have gotten anchored on current and future selves, but it's really about you know, who we are across time, across the decades, from our past selves to current to future, and how those conversations play out.

Yeah. Have you written a letter to yourself in the future?

I'm embarrassed to say I haven't. Here's what I've done. I've written letters to both my son and daughter— emails, actually. You know, let's— I'll be modern about it. I've emailed them. I've created, you know, email addresses for them. I've emailed them. Knowing that they're not going to read this for a long time. And that sort of had an interesting impact on me because it's forced me to think about them developing in their lives. Now, what I have done is I've recently have done some guided meditation for my future self. I had someone walk me through and talk to my future self, which is a kind of wild experience. And I, you know, for someone who studies this stuff, I was having— man, I was having a hard time. And I, you know, I kept— for some reason, I kept seeing myself hunched over. That was like the main— that was the main thing in my mind's eye. So I've done some of this sort of stuff.

It's really just awareness of this idea of thinking about what you would say, what you would change, what decisions you would make differently, how you would spend your time. It really is a challenging thing to play with. And it leads me to this next question, which you've done work on too, which is, when is the future? Mm-hmm. What's the difference between the present and the future? And as someone who is approaching another birthday, you've written and talked about the importance The importance of milestones and how we view those sort of transition periods. And could you talk a little bit about that work?

Yeah, absolutely. So I am fascinated by the idea that we constantly separate out the present from the future. And, you know, admittedly, it changes, right? So there's, there's a very local present, like, you know, we could say after we're done talking, we're going to move into a new, you know, that's some version of the future. But I think for practical purposes, that's not really what we're talking about when we're interested in these sorts of questions in psychology and marketing. You know, really what we're interested in is, you know, when do people think that they'll sort of tick over and, you know, some version of the future will start or their future selves will start. Now you brought up birthdays, which actually presents a really salient marker for dividing time. And it's funny because it's arbitrary in some ways, right? You know, it's not like when you turn 40, that next day you're somehow, you wake up qualitatively different. Although one of my good friends did wake up having to go to the hospital with, like, a terrible back spasm the morning of his 40th birthday. So he really became his future self right away. But, you know, I think for most people, you know, one day to the next is no different. But we place so much emphasis on birthdays, and especially, as you said, milestone birthdays. So one of my projects with Adam Alter from NYU, we looked at what happens around milestone birthdays. You know, what happens before you turn 30, 40, 50, 60? Our theory was that this is a time when most people sort of take stock of their lives. It just presents a very easy time to look back on the past, assess what you've done and what you want to do, and then look forward to the future. And it creates somewhat of a barrier between who you are now and then that the version of you that exists on the other side. Now, some work has actually shown that those barriers can be really good. They can be motivating because it can represent sort of almost like a wake-up moment. Here's a separation, like, you know, look, here's a reset button, just like, by the way, New Year's can do too. But what we were looking at specifically was what sort of behaviors people engage in as they approach those milestone birthdays. And what our thinking was, you know, this is a time when people take stock of their lives, they sort of assess how meaningful their lives are, and that can lead them to either sort of seek out meaning or almost withdraw in a darker way. We documented a couple of different cases. One of the cases we documented is that On the darker side, people are more likely to sign up for Ashley Madison, the extramarital affairs website. You know, this is very hard to verify ages on this sort of thing, but we saw, you know, we saw a little evidence for that and some other evidence suggesting that people weren't necessarily lying in a predictable way. But, you know, maybe more to the point, we also saw some other positive pieces of evidence. People are more likely to sign up for their first marathon. Anecdotally, this is something that resonates with a lot of people. You hear people say, well, I'm about to turn 40. This is my big year. You know, I really want to run the marathon or a half marathon or a 5K. But I think there's a bigger point here, which is that there's a lot of different markers in our lives that we can point to and look at as barriers between who we are right now and then who we want to be. And I actually think rather than be kind of terrified by them, which many people are because we all know what they represent. They represent we're getting older. I think the more positive thing to do is to use them and use them as a tool to help us start to take action. You know, I've always wanted to do a research study asking financial advisors to try to talk to people as they're about to turn, you know, a big milestone birthday and see if that prompts them to Engage in more estate planning. Finally, think about an annuity, these sorts of things, right? Now, my colleague at Anderson at UCLA, Heng Chen Dai, has done some work on what she calls fresh start effects. And she has a recent paper showing that birthdays can be a good tool to get people to make an increase in their 401 contribution in a similar way, sort of a reset button. But I think there's more to be done there.

Yeah. The idea that in January, the year starts over and we get a new chance, or in— I'm not a Cubs fan, I live in St. Louis, but the perennial, like, "We'll get 'em next year," and spring training, you know, hope springs and all that. It is so interesting the way we continue to— As you approach 40 or 50, you start to think about things differently. And the idea that these landmarks really mean something when the number is arbitrary, it's— Mm-hmm. It's interesting.

I'm with you. I think we need it though, because if there weren't those markers, arbitrary as they are, time would just kind of stretch on, you know?

Yeah.

And I think that's important.

That's right, because when time sort of fades or blends or stretches on, you may not be looking for these big shifts or big changes that could lead to a higher level of well-being. So you can use these to, as you say, to your advantage.

That's right. I think that's exactly right. I think a little bit about, you know, the sort of warping of time perception that happened. A lot of people sort of anecdotally reported happening during COVID And I'm, I'm so curious what happened to decision-making during that period of time when time just sort of stretched. There's that period where time just stretched on and on and on, and there was one day led to the next, and there was no difference between Monday and Tuesday and Saturday and Sunday. And, you know, you Imagine without salient markers, that's how life would be in some way, right? Just kind of stretches on and keeps going.

Yeah. Okay, Hal, when we think about our future self, I'm trying to wrestle with what are some easy ways we can change our lives or improve our lives in the here and now? And in our industry, there's a guy named Shlomo Bernartzee that I've heard give a talk here and there, and he's really a compelling person to listen to and is most known for the whole idea of saving more tomorrow. Or at least that's what I associate with him. Um, have you done some work with him and, uh, and, and how it could relate to breaking it down and making life easier for us in the present?

Yeah, yeah. So he's a friend and a colleague at UCLA. We just published a study last year that it almost goes at this problem from a very different angle, right? So rather than try to make life better for our future selves and try to bond more with our future selves, you know, you start with the recognition that there's two selves here. There's the current self and the future self, and you don't want to set up a scenario where the current self is always the one making these painful sacrifices. And so, you know, how do you make the sort of behaviors in the present just a little easier? We actually ran this study where we, we worked with Acorns. This is a fintech company down here in Southern California. We took new users from the app and we asked them if they wanted to sign up for an automatic savings account. But for one group, we asked them if they wanted to save $150 a month. I should be clear, this is, you know, this isn't going to result in anyone's extraordinarily well-funded retirement, but these are kind of younger, these are millennials, median income. It's a starting point. We asked another group if they wanted to save $5 a day, same amount of money, right? It all boils down to about $150 a month. So we, we were thinking that $5 a day might be useful in part because, man, that's just a much easier pill to swallow. I think a lot of people feel like that's a sacrifice I can make. $150 a month. You know, there's only a few things that fall under my list of expenses that are $150 a month or more. And it feels like giving up one of them is really hard. But there's a lot of things that I can imagine spending $5 a day on. And I can imagine giving up any one of those, right? I mean, it's a little psychological trick. So, you know, this is what we asked people. And I gotta say, this is one of the very few times in my research career where I really had to go back and look at the results like 10 different ways because I wasn't sure that we got it right because the impact was so big. Um, 4 times as many people saved when it was $5 a day compared to when it was $150 a month. And I should be clear, it's not like we're talking about small numbers. It was 28% versus 7%. These are warm leads. These are already folks who've signed up for a fintech app. And to be totally transparent, more people dropped out after a month in the, you know, $5 a day grouping. But even after that, there were still way more signed up for it than there were in the $150 a month group. And to me, I think it's really a nice demonstration of, you know, the power of bite-size and the power of really breaking things down in a small way to make it easy for ourselves right now. Now, there's lots of questions that are opened up by this, right? So if I'm trying to get somebody to save, I don't know, $1,000 a month, is the math going to work out for me to break that out into daily terms? I don't know. And so, you know, or is it going to work out? No one's going to believe me if I say, hey, just save $1 a minute. Well, that's, that's going to be a ton of money really quickly. So, you know, there's obviously limitations on this sort of framing, but the bigger picture idea of trying to break things down into smaller, you know, what we'd call temporal time units, that to me is the thing to take away from this.

Yeah, well, I guess what's interesting is that knowledge can be used for good or evil. I mean, that could also go the other way too, right?

I mean, hey, look, it's not like this idea was something that we were the first to ever come up with, you know, like the mattress industry has been sort of touting this sort of thing for ages, right? Yeah, sure, it's a $2,000 mattress, but for only 6 cents a night, you get the perfect sleep, right? It's the same idea. And, and yeah, you're right. In some ways, I think that this is exactly the theoretical underpinning of why something like Afterpay works. You're breaking consumer goods down into these smaller payments. Well, now all of a sudden, that brand new 4K TV that's only $30 a month for the next God knows how many months doesn't seem so bad. You know, the problem is it's just a few purchases that like that are going to result in some pretty big debt, right? So, so yeah, you're right. There's two sides of the coin for any of these things.

I think you have expertise in messaging, and I feel like, you know, that example is such a great connection to this point, but messaging matters. And I'd like for us to talk for a second about from your perspective, based on the research you've done, concepts that you believe are maybe the most misunderstood or overlooked or hard to really just intuitively pick up on as it relates to messaging. Like when people think about saving for retirement, that doesn't necessarily inspire excitement. It sounds like a chore. Whereas, you know, this whole FIRE movement, like, the idea of freedom, financially independent, I'm gonna make work optional. I've heard these things over the years, and it does feel like we default to saving for retirement.

Right.

And some people don't like the jazzy play with words, but as you think about it based on your research, can you think of good examples or maybe misunderstood examples where the messaging really matters in a way we don't intuitively pick up on?

Yeah, absolutely. There's a couple things here. So first off, I think that any of these conversations that result in or sort of revolve around long-term saving have this problem of, of a conversation about aging. And I think, you know, one of the things we don't fully appreciate is just what sort of negative associations people have with aging. And part of the reason I bring this up is because what the research actually shows is that in many ways, emotional lives improve as we get older. And that's just not something that's talked about enough, you know, and I think the dominant approach is like, you know, think about how you can relax in retirement. And I think that sounds to a lot of people like, think about how you can get ready to die. And that's not that appealing, you know, and so I'm not sure the best way around this, but, you know, we know the research says that older people experience more positive emotion on a daily basis. They experience less negative emotion. They let things roll off their back a little bit more. They focus more on meaningful pursuits. And I actually think that last point could be a key, especially right now in the current moment we're in with this Great Resignation, that there's more and more people, I think, who are really focused on Purpose and meaning. And I know it's, you know, it sounds a little funny for a business school professor to be talking about purpose and meaning, but I think these are things that people really care about right now. And so, you know, what if you change the conversation not to be one about saving for retirement, but to be one about, you know, how do we have independence to do the things that we want to do? How do we have the— you said it— freedom to not just do what we want to do, but to to experience meaning and purpose in our lives. Now, I'm not an ad copywriter, so that, that needs to be run through the editor there. I think the point though, is that that sort of messaging really needs to shift. And I think we also need to shift away from retirement as this abstract thing, where your goal is to get more money. So in theory, you can do what you want to do with it, to really connect the dots a little bit more for people. So that it's about time, it's about time that's given back to you. It's about time that you can spend doing what you want to do. And the, and the whole concept of saving money, it's not just to save money, but it's to save money to use it, to spend it on doing things, and then having experiences that you actually want and will bring you meaning. But, you know, it feels like we need to play that out throughout life. Like, don't just save those for later, right? Like, how do you balance out the meaning based spending throughout one's career. I assume that's something that the best advisors talk about, you know, but I'd love to see that be more of a real conversation.

Yeah. My business partner always talks about how he spent his life learning how to save and deprive himself and sacrifice for a day down the road. But then he became a professional saver and not necessarily a professional spender.

Mm-hmm.

And so it's hard to flip that switch and say it's okay now. Like, I— you can, you can use some of the benefits of what you prepared, or it's ready for you, like it's, it's been in the oven and it's time. You know, it's really hard to retrain that.

It's so hard to retrain that. And I saw this meme the other day, and you know, it's a— some says something like, you know, when you waited too long to take that trip, and it's a picture of this older couple on a gondola in Italy, and they're sound asleep in the gondola. And I think about that in terms of what happens if we become these professional savers and we put these experiences off and off and off until, you know, the time that it's finally right for them to roll around, we don't appreciate them as much, or, you know, we've missed the boat, so to speak. Sorry for that pun. Um, one of my former colleagues, Suzanne Xu, has this paper on what she calls the procrastination of enjoyable experiences, where we put things off waiting for the perfect time when that time never rolls around, that it just doesn't exist.

Okay, so you brought it up. What would people choose, money or time? You asked this question, you did research on this question. Would you rather have more time or more money?

Well, I've got to say more time.

But that's the question you asked a lot of people. And what did people say?

Well, most people say they'd rather have more money, shockingly, but about a third of people say they want more time. And when you look at the people who say they have one more time, they're actually happier. Now you say, okay, well, duh, they have more money. No, no, no, you can, you know, statistically take into account how much, how much money do people have? How much time do they have? You know, what's their education, income, all these things? Let's set all of that equal. So let's take two people who have the same basic background. The one who picks time is happier than the one who picks money. Now, this is a correlation. We We ran subsequent studies where we sort of prompted people to think about having more time or more money and found that when you prompt people to think about wanting more time, that they end up feeling a little happier as well. Now, I think, I think there's really something important happening here, which is that part of the problem is we're really bad at figuring out how to spend our money in ways that promote our happiness. But if given more time and more time in our day, more time than our lives, I'm hopeful that we might be a little better at figuring out how to use that time. My hope is that we don't use it to just, you know, go on Instagram for another 2 hours a day. The issue is, if I say more money, I kind of know what's going to happen to that. I'm going to find more things to spend it on unless I'm really, really, you know, trained. I talked to somebody, the right person to help me figure out how to spend it, you know. So, so let me give you a nuanced answer. I would say I'd want more money if I could be sure that I can use that money in ways that's going to promote my happiness and especially buy myself some time, right? That's You know, I know it's a little like saying I'm going to take the 3 wishes to buy more wishes, but to me, we make the error that time is fungible, that we can somehow just get more of it in the future, and we can't. You know, we can borrow money. You can't borrow time. And so I, it's certainly be nice to have more of it.

There are 2 other elements that I think about too. Um, if you have time and you have financial freedom and you have health. And you have social connections. That's sort of the magic combination, at least from what I've observed.

And a short commute.

Yeah. And if all those things come together at once, it's pretty magical. Time freedom, money freedom, your health and social connection.

Absolutely.

And I think sometimes time and money get, um, top billing, but social connection And your health can change a lot of things too. I mean, I've watched a lot of people prepare for quote unquote retirement and then not have their health and the whole plan and all of this deprivation was for what? You know, it takes all of these things kind of coming together. And that's, I love that you are always pushing the perspective towards, hey, you will have no good memories to look back on if all you do is plan for your future self. I really appreciate that point of view. View.

Thanks. Yeah, I, you know, I think I get labeled by my friends as like the guy who only wants to think about the future self. And that's, that kind of sounds like the guy who's not willing to have any fun. And that, that's not quite right. You know, you, Carl Richards, you know, he has this bit that's one of my favorite pieces where he says just spend the money. And, you know, I think the key insight there is have your experiences now, do something now so that you have something to look back on. And, you know, of course, it's anything in excess is going to be bad, right? So if you only just spend the money, Well, your future self's going to be pretty miserable, but if you only save it, he's also going to be miserable.

Yeah, well, as you said, we're lousy sometimes at figuring out how to spend and what to spend on in ways that truly drive satisfaction. One of my past guests made an important distinction between pleasure, which he would say is external and short-lived, and satisfaction, which is internal and long-lasting. And so the question becomes, what do you define as satisfying and how do you spend or invest or commit to creating more of those experiences? Okay, but, but here's a good question. I read a piece you did on couples, couples, couples and money. And there were a couple insights as to how couples can do a better job around the issue of money. You want to talk a little bit about what you found as it relates to couples having higher levels of relationship satisfaction?

Yeah, sure. You know, this is— I should be clear, I was just summarizing some of the research. You know, a lot of it's been led by Jenny Olson, uh, and Scott Rick, two marketing professors. And, um, one of the things that struck me is there's this whole academic cottage industry around financial decision-making, and you look back on it and You know, 99% of the research is about individuals. And then you start thinking about what percent of financial decisions are actually made with somebody making a decision on their own. And, you know, I don't know the numbers, but it's gotta be low. And so it may not be shocking to find out that one of the things that really matters is transparency. And what that means is joint bank accounts, you know, in a very practical way, joint banking accounts tend to. Promote more harmony than separate ones. And, and up until recently, researchers have only looked at it in a correlational level. And you can say, well, sure, the people who have decided to make them joint were happier to begin with. But these folks actually took newlywed couples and assigned them to have separate accounts or joint accounts. And the ones with the joint accounts ended up more satisfied with their relationships at a later point in time. Now, part of the reason why is that promotes more accountability, not just transparency, but accountability. So, you know, if we have pooled our money together and there's— I keep coming back to the new TV, it was something I keep thinking about, you know, but there's this new TV I want to buy that really should be a conversation I have with my partner. And if I have my own account, I'm going to get it. Well, you know, that's going to create problems and it's The researchers actually liken it to any other sort of relationship trust issue. And they, they talk about infidelity. They talk about financial infidelity too, where, you know, I might be buying things and spending my money and not telling my spouse about it. Maybe I have debts that I haven't brought up to them. Now, that's a very different thing than having an affair, but it's— there's a common theme, which is a violation of trust, right? So one thing that I thought was quite interesting about the work that's been done is they say, well, you know, transparency matters and it's really important, but that doesn't mean we have to be transparent about everything, you know. So if I have some— for me, it's, you know, I remember at some point we were cleaning out my work bag and my wife found like 3 Snickers wrappers in there, and she was like, I didn't know you like Snickers. And it was like, I had to kind of admit to myself and her that like I buy a Snickers almost once a day when I'm in the office, and she never knew. And, you know, that doesn't amount to that much, but it was this funny thing where I was like, yeah, I had never told you that. Now, obviously, that's kind of a dumb example, but you can think about other cases where maybe it doesn't matter if you don't mention this expense or that expense, but over time, more transparency seems to be related to and lead to more harmony, more relationship satisfaction.

Okay, a couple quick questions. Uh, here's one. Can you think of an example of where you've taken a long view and it's really paid off?

It's a fantastic question. I mean, this is a really, you know, specific example to me. But you asked, you know, I mean, I think going to graduate school for me was a long view. You know, it was a long process. It was 6 years. And then I had, you know, I did this postdoc for 2 more years. And those were years where I was seeing some of my other friends make money and, you know, progress in their lives. And I was feeling a little like I'm still a student. You know, but for me, that's paid off. But I also think that there's like another way I'm— hopefully I won't struggle to articulate this, but sometimes I take a long view by trusting my intuitions about a path that feels right and feels aligned with my values without really knowing where it's going to go. One of the research findings that I've— not my own, but actually some other researchers, Nina Strohminger at Penn has found, is that one of the main things that remains constant over our lives. And one of the things that we think should remain constant is our core moral self, our moral values. You know, if I, if I stop liking rice, that's like a preference that changes, but it may not mean that I've somehow changed. But if I stop being kind and start being like, really snarky, that feels like I'm not me. You know, I've really gravitated to the idea that if I trust the decision I make is in line with a core moral value of mine, then maybe that decision will pay benefits to a later version of myself who I may not know right now, as long as that future version of me shares some of those same moral concerns. So it's like taking a long view without really seeing what's going to happen down the line, if that makes sense.

Yeah, and I think you make a great point about there is an intuitive or sort of values alignment question that says, you know, I'm doing the right thing. I don't know when this is going to all play out, but I think this is right for me. We can't put everything in a spreadsheet, especially when it comes to figuring out how to make better decisions, even though oftentimes we're wired against making the ones we know we should.

That's absolutely true. Absolutely true. Yeah.

Well, you know, Hal, I'm feeling mixed emotions right now, 'cause I think we're coming to the end, but you've done work on why endings are mixed.

Yeah.

I think endings are often sad, but they're not always sad. They're mixed.

That's right.

Why?

You know, it's, um, I love this question, and we kind of know this, right? We know intuitively that endings, you know, graduations, moves, these sorts of things are mixed, right? There's a happiness and a sadness, but it's not just those sorts of things, right? Anything that represents an ending of one life transition and the beginning of another has that sort of tinge. You know, my colleagues and I have called it poignancy. The basic idea is that we feel some satisfaction from progressing through life. That's a positive. But we also feel some sadness about the fact that it's, you know, the current chapter that we're in is ending. And there's another layer to it as well, which is that when we approach endings, it often prompts us to look back on good times that have passed and recognize that they'll no longer be. I think of weddings is actually a funny example of this, because in a way, weddings, you know, should always be like an alien coming down would say, of course, that should just be just a positive experience. But then you see so many people have that tear in their eye during a wedding. Everyone knows this experience. And it's a— in part, I think it's because there's a recognition that we're progressing, time is moving on. It's also an awareness that one chapter's ending and things that were true in our earlier lives, our single lives, et cetera, are no longer there. But I think there's another layer too, which is not to be overly dramatic about it, but it's also representative of us sort of moving toward the end of our lives. And so now, look, the ending of this podcast, I hopefully doesn't represent that per se, but it is, I think, something that's inherent in a lot of meaningful endings in our lives, um, that there's a big mix of things happening there.

A quick question: is there any future research that you're working on that you're really excited about, or future project?

Uh, so one, one research study that, that we're working on writing up right now that I'm really excited about, um, is again with my collaborators, um, Shlomo Ben-Artzi and Steve Xu, another instance of trying to reframe savings for people. But in this particular case, we, we asked people what percent of their paycheck they want to save versus how many pennies per dollar of their paycheck they want to save. And this was an idea that was brought to us by a financial advisor, George Frazier, who he's become kind of the pennies guy. The impact of this was an interesting one. It's not so straightforward. It has, it has an impact. It does cause people to save more. But in particular, it seemed to really help lower-income consumers. And there's some thinking that potentially lower-income employees and consumers may also score lower on what we call numeracy, which is sort of like how easily you can grapple with, you know, numerical concepts like percentages, which is a really abstract concept. And this is something that just makes it more concrete. So that's one project that we're excited to be writing up right now.

That's cool. Well, Hal, you are my kind of thinker. I'm in your fan club. Anything you write or put out, I want to be in the VIP underground mailing subscription list. I will pay a monthly amount of $5 per second to be in the, in the group. And I really enjoyed chatting with you. Is there a place where if people who listen to this podcast are like, I need more Hal Hirschfield in my life now, where can they go and get it?

Oh, that's great. Well, they can go on Twitter and also my website, hallhirschfield.com. I've got all my papers there and whatnot. And, uh, yeah, Matt, thank you so much for having me. I really appreciate all of your great questions.

Well, I appreciate the work you do, and if you ever need a practitioner who interacts with real humans on the other side of some of this stuff, I would love to be a useful person somehow to work you do in the future. Really a big fan.

I love that. All right, well, I'll definitely keep you posted.

All right, thanks, Al. Bye. Cheers. Bye. What would you say to your future self? Please note, the information shared in this podcast is not intended as advice. The intent is to share meaningful experiences. I am likely not your advisor, nor wealth manager, nor financial planner, and my opinions are my own and not necessarily shared by Hill Investment Group. Investing involves risk. Consult a professional before implementing an investment strategy. Thank you.