E5: Are You Making Unproductive Financial Decisions?

Financial Decisions

In this episode, Brett emphasizes the importance of organization, asking deep questions about financial goals, and being intentional with money to avoid walking in circles with financial decisions.

Today, I’m going to start with a story, and it’s about a weird function of human behavior. As human beings, if we don’t have landmarks visually, let’s say for example that you’re blindfolded, then we will walk in circles instead of a straight line.

There’s something about our brains that doesn’t function if we don’t have a landmark to fixate on.

Now, some background on this. I saw this story written in science.org. And there were a bunch of researchers who were collaborating to confirm this common belief that people walk in circles when they’re lost.

The researchers weren’t really sure, so they wanted to do their own test to see if this was actually true. So, they performed this experiment.

They blindfolded people, and then outfitted them with GPS receivers. Then, they put them in a big field, and they simply tried to get them to walk in a straight line.

And here’s what’s crazy. The participants were only blindfolded before they were asked to walk, just moments before. So, they knew both where they were and where they had to walk to.

This was a large open field, and they couldn’t do it. In fact, most participants in this large field simply started to meander all over the place, which you wouldn’t think would happen, and they’re ending up in circles, sometimes in a circle as small as 20 meters in diameter.

Now, here are some of the things that the researchers thought in trying to explain why this might be happening.

One thing they thought was, well, maybe we all have different lengths in the size of our legs. Perhaps most of us have one leg longer than the other.

But no, they found no strong bias based on leg length or discrepancies in leg length. And they even gave some participants thicker soles on their shoes just to see if that would affect things, and it totally didn’t. So, they eliminated that hypothesis.

But the total findings ended up suggesting that the issue isn’t physical, it’s a function of our brain. It’s simply a combination of muscles and joints and sensors no longer communicating with one another.

They said that when people are blindfolded, the brain has to plot a course for straight ahead based on limited information, including input from the vestibular system, which informs the sense of balance, and movement sensors in the muscles and joints. All those signals have very small errors.

Therefore, limited information combined with small errors over time ends up leading people in circles.

Then they tried the same research, both in a forest and a desert, but not blindfolded this time.

Now, they first tried this exercise during a sunny day, both in the forest and in the desert, and guess what? Everyone did fine. They were all able to walk in a straight line, all on their own.

The researchers then did this exercise when it was a cloudy, dark day, just after the sun had gone down, so visibility really wasn’t that great, and they ended up walking in circles. This goes back to the point that our brains in these situations have limited information, and then all of those signals that happen within our brains and bodies start actually being small errors.

Why are we talking about this? Because we do this exact same thing with our money.

Due to limited information and the small errors that we inevitably make, some or many of them avoidable, we as human beings typically will walk in circles with our money and our financial decisions.

Back to the analogy with walking in the field. We wonder why we didn’t make it to the other side.

Why didn’t I make it where I clearly thought I should be? Instead, I’ve only been walking in circles the whole time.

So, for today’s episode, I wanted to touch upon a few topics in relation to this. But here’s an invitation I would make to you listening.

As you’re listening to this, if you’re recognizing parts of your life where you feel you’re not making the financial progress you thought you should be making, after all of this time as a CRNA. You’re making your progress, but you just really can’t see or tell. Think about these areas where you feel like you’re struggling to make progress.

It’s possible that you’ve been walking in circles because of these two things mentioned: a lack of information and small errors along the way. And then, not knowing any better, you just keep going in circles. You’re making unproductive financial decisions.

Episode Highlights

[06:48] Where CRNAs tend to struggle with financial decision-making.

[09:37] The power of organization in achieving financial goals.

[12:49] Embracing changing and making informed financial decisions.

[16:18] Why it’s important to have another set of eyes on your finances.

Looking for more financial planning tips and resources for CRNAs? Check out the MoneyRx for CRNAs Podcast home page for additional podcast episodes.

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