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The Secret Language of Money
On Being Wrong Part I: Don’t Believe Everything You Think

David Krueger MD

Derren Brown did an experiment in London on Regent Street in which he placed his wallet, with money clearly sticking out, on the sidewalk.  He drew a circle with yellow chalk around the wallet – much like the crime scenes on TV.  Then he walked away, leaving the wallet lying there.  Hundreds of people walked past this wallet.  Most saw it, many stopped to look at it, but no one would pick it up.  The yellow chalk circle created a barrier – an assumption that limited people from simply picking up the wallet. 

Belief systems are both powerful and enduring.  Beliefs come first, expectations follow.  We form our beliefs from various personal experiences with family, friends, colleagues, and culture.  Then, after forming those beliefs we seek to validate, even to justify and rationalize.  We then confirm the beliefs by cherry-picking data to support, and become blind to data that diverges. 

Our perceptions of reality rely on the beliefs we hold of it.  The brain is fundamentally a belief engine.  Beliefs are the software that organizes both what we perceive, and how we process it.  Beliefs cue our radar to determine what we perceive from an infinite sea of stimuli, and the patterns we deem meaningful. 

From behavioral economics, we have learned that it is harder to let go of a belief if we are more heavily invested in it, and especially if we don’t have a new one to replace it.  We are seduced by the sunk costs of our beliefs.  (Sunk cost fallacy refers to the decision to justify spending more money when some has already been spent that can’t be recovered).  When conditions clearly dictate that they should turn around, mountain climbers part way up Everest decide to continue because of how far they’ve come.

How do you form a new belief? 

Changing your belief system changes the neurophysiology of your brain, making it both an art and a science to create a new story.  Whether the content of the belief system is about life possibilities, money, or other personal stories, change is challenging.  Many of the ways that we try to facilitate change are contrary to the way the mind and brain works. 

We change, not because we seek transformation or enlightenment, but because what we’ve been doing doesn’t work.  (Often dramatically doesn’t work)  And we begin to look for other possibilities and options because it is lonely and unpleasant inside our own stuckness.  The ability to admit that we are wrong depends on our willingness to tolerate the unpleasantness associated with being wrong.  (For guys only:  Remember being hopelessly lost, yet stopping for directions was not an option?)  Being wrong is, first and last, an emotional experience.  Our mistakes become a moment of actual alienation from our sense of self.  “That wasn’t me.”  The ultimate challenge: To not believe everything we think.  

Our sense of self is composed of a number of beliefs, any one of which can be mistaken.  We each have had ideas about ourselves – beliefs – that have evolved over time, if not collapsed abruptly.  Remember when you thought you didn’t want children, or knew you would grow up to be a lawyer, or reasoned that you would be happy only if you lived in New York City? 

What is your yellow chalk circle?  Hint:  It is any assumption that limits you.
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The Behavioral Economics of Everyday Parenting

David Krueger MD

Many years ago, one of my psychoanalytic patients said, "You know, Doc, it's a lot easier for me to talk about dead people and bad dreams than it is for me to talk about handing this check to you each month."

A poll of 20,000 people revealed that half of parents had never discussed finances with their children, and two-thirds had never revealed their income. With no comfortable discussion or little real information about money, the vacuum is filled by fantasy and personal myth.  Children often conclude that things treated secretly and uncomfortably are bad and taboo.  Their logic, based on the behavior they observe, can create a lifelong legacy of discomfort.

Also many years ago, on a cruise ship headed for a family adventure vacation, my son encountered casino gambling for the first time.  It intrigued both of us, and we decided to form a business partnership for gambling.  Since he was under age, he couldn't actively participate, so he sat behind me as my  "consultant" where he could see our cards and the action on the blackjack table, and whisper strategy and directions in my ear.  Curious to me, at age 14, he was a considerably more accomplished gambler than me.

It was a wonderful opportunity for us to talk about some principles of business.  Aware that the most common reason for failure of small businesses is inadequate capitalization, we decided to capitalize our venture at $50, $25 each.  This amount seemed sufficient for losses that might otherwise disillusion or stop us, when we might need some "bounce-back money."  We also decided that we would never risk getting lower than $25, half our initial investment, on a single evening session.  We also evolved principles, agreeing on when we would hold, when we would ask for another card, the amount of our standard bet, and under what circumstances we would deviate from our standard.  We recognized the value of having already established this business plan once we were at the table and in the throes of impulsivity.  And on the two or three occasions that we abandoned our rules, we learned important and expensive lessons that served to re-establish our principles even more firmly.

We gambled for approximately an hour and a half each night of the cruise.  At the end of six evenings, we were, happily, ahead about 300%.  In that time, we had seen roughly 40-50 people at our table come and go.  We made the following observations about the similarities among those who did not win, especially those who lost spectacularly:  they had no consistent "business plan" and those who appeared to have some standards abandoned them when emotion was high (big wins, big losses, or sustained streaks of wins or losses).  Emotionally motivated behaviors were the rule, including anger at losing, overstimulation by winning big, or greed.  Others had no established endpoint for loss or gain.  

I was thankful for this opportunity for my son to see, firsthand, these basic business principles at work.  And I loved our time together.  

One evening an older woman looked at me indignantly when she saw what my son and I were doing.  "I suppose you're proud to be teaching your son how to gamble?" she said.  

"No ma'am," I said, "I'm proud that he's teaching me." Add a comment
 
Believing: The Neuroscience of Reverse Truths

David Krueger, M.D.

While my children’s adolescence cured me of most of my theories, a few fundamental ones survived, and are even more boldly illuminated against the backdrop of passing years.  One of these survivors is the principle of reverse truths.  In traditional science, truth is arrived at my proffering a hypothesis, then accumulating data to prove or disprove it; the data force the conclusion.  Reverse truths work the opposite—the hypothesis or belief creates the data. 

Our assumptions select what we perceive in the world and determine what meanings we attach.  Not only is believing necessary in order to see, but we bring about what we expect to happen.  A story creates a reality.  For example, a placebo is an inert pill, plus a story.  The patient is prescribed expectations that, in the majority of cases, manifest.  By anticipating an experience, we can create it. The story generates a truth so powerful it can reverse the pharmacological effects of the real medicine.  The placebo’s story is a white lie, a fiction that becomes a truth.

The most vital reverse truth in our lives is our belief in our children.  They look to us as a mirror of who they are, and they become what they see.  If we trust and respect them, they become trustworthy and respect themselves. 

Some parents have this reverse truth backwards, thinking that they will trust a child only after he or she has proven to be trustworthy.  There are forward truths, but this isn’t one of them.  Our belief in our children is taken in by them, and metabolized into their own belief in themselves.  We convey to them in an unspoken message: “I’ll believe in you until both of us can.”  When that affirmation isn’t there, they may spend their lives looking for that elusive approval.

Carlyle was right. “Tell man he is brave and you help him to become so. “  As a parent, the trick is that you have to believe what you say, for feigned praise and inauthentic interest are forgeries immediately discernable to a child’s expert eye.  I see this reverse truth professionally as well.  When I work with practicing professionals—such as docs and financial professionals—and performance professionals—such as actors and athletes—I have to believe in them so they can believe in themselves, with an unspoken, “I’ll believe in you while you teach me why, until both of us know.”  Which is why I only work with clients in whom I really believe.

A corollary of believing in my children was to believe their words, their truthfulness.  When both my children were very young, I told them that I would never lie to them and would always believe everything they told me as well.  I knew then the responsibility that placed on them to always tell the truth. 

On a Father’s day many years ago now, my son’s last before leaving home and starting college, I found a letter from him at my bathroom sink.  A passage in it addressed his perception of this reverse truth: “You never lied to me and I have never lied to you.  Sounded stupid at first, but as time passed, it became more important, and I realized that I never would.  This is a relationship few others have ever had.”
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The Allure of Certainty

David Krueger, M.D.

My wife and I spend an occasional evening at a nearby restaurant with a piano bar—where she is regularly invited to sing.  At times, we join the "patio people" for discussion, drinks, and an occasional cigar.  While I usually get scarce when the topics turn to religion and politics, I recently hung around long enough to reflect on the notion of certainty.  The first thing I noticed is that certainty often seems directly related to the amount of alcohol consumed.  But, you're not following my blog for such pedestrian observations. 

People have beliefs or even convictions that cannot possibly be wrong.  Their journeys toward their conclusions validate the internal sensation that something just is.  If you believe you are unshakably right, it has to follow that those with an opposing viewpoint, at best, deny the truth, and at worst, attempt to lure others into their falsehood. 

For some, being certain at times is more forceful than knowledge; it can involve being mistaken in high decibels.  Paul Conrad, Political Cartoonist said of Charles Coughlin, a 1940’s radio preacher:  “I knew that anybody who had to holler that loud couldn’t be right.”

We know from observing others, as neuroscience now validates, that the feeling of knowing is not a reliable indicator of accuracy.  Our minds and brains can mislead us; social contagion and herd mentality can sway or even blind us.

Called "absurd" by Voltaire and "an intellectual vice" by Bertrand Russell, certainty can deaden imagination and derail empathy, our most humane and redeeming qualities.  Our own certainty can make the stories of others inconsequential.

Freud had a self-fulfilling, circular certainty when he said that those who did not believe in psychoanalysis were simply "resistant."  In Psychiatry, pathological certainty is termed confabulation: to make up and believe information that fills in gaps of mind or memory—in the boardroom, it's called a lie.  Another brand of certainly is delusion: a fixed, false belief—in the consultation room, it's called a diagnosis. 

We have an aversion to uncertainty.  Doubt creates an uncomfortable, insecure space.  A series of studies by Dr. Dan Gilbert of Harvard showed volunteers words flashed on a computer screen for a few milliseconds.  This was such a short time that each volunteer was unaware that the words were shown and could not pick them out—or guess—from a multiple choice.  Yet they were influenced by them.  For example, when the word hostile was flashed, for the next 30-45 minutes after viewing the word on the screen, volunteers judged others negatively.  When the word elderly was flashed, volunteers walked more slowly.  When these volunteers were later asked why they judged or walked the way they did, they immediately created an explanation.  For example, the volunteers who walked more slowly would say, "I was tired when I did the test."  Or, "I've been traveling and haven't slept well."  Each was unaware of the fact that they were falsely attributing cause and effect.  But they seemed certain.

Our minds seek closure, and our brains strive to end dissonance by a causal explanation.  To create a complete story infers both closure and a sense of effectiveness.  Completion trumps accuracy. 

Frustrated by "On-the-one-hand... while on the other hand..." advice of his monetary advisors, Harry Truman threatened to appoint a one-armed economist. 

We sometimes defer to the patio philosopher who seems most certain, or the politician who radiates assurance.  We often elect the ultra confidant to lead us. 

Charles Renouvier said it most insightfully, "Properly speaking, there is no certainty; there are only people who are certain." Add a comment
 
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