Social Comparison with Neil Bage
Understanding social comparison and how to avoid it's harmful effects on our financial wellbeing
He’s back, for a third time! Neil Bage has a brilliant discussion around what social comparison means and the effects it can have on our financial wellbeing, both positive and negative. With great tips on how to curate your social media experiences, the most dodgy money saving tip to date in #tightasstommo and the usual banter form the guys – this is an episode not to miss.
Welcomes and Introductions
Featuring David’s long and distinguished acting career, men about town and this podcast’s sponsor Ovation Finance
What is todays podcast all about?
Another chat with Neil Bage, this time looking at what social comparison is with a discussion around its harmful effects on mental and financial wellbeing.
Featuring where to find some of the 14 billion old-style legal tender floating around, such as £1 notes and paper money, that has yet to be handed in. (we recommend you give it back to the owner once found!!)
Today’s Tip – Helping others who have the hard choice of heating or eating at this time. Click here to visit Trussell Trust and see how you can help with their food banks.
The No Shizzle Sherlock Test
Today’s tip – Stock investment ‘advice’ from TikTok
Come and talk to Ovation for regulated investment advice that will develop your financial plan in a way that is aligned to your objectives and motivations – visit our contact page for more information
Interview with Neil Bage
What do we mean by the term ‘social comparison?’
- is this linked to social media?
- Social comparison theory – initially proposed by social psychologist Leon Festinger in 1954
Upwards social comparison
- the positive of finding inspiration
- the negative of not being as good
Downwards social comparison
- the positive of feeling gratitude
- the negative of looking down on someone with pity
Social comparison and how it is magnified on social media with a baby picture example – what are we not seeing in these ‘cropped’ lives?
Social comparison in financial planning, how we need to avoid making decisions based on someone else’s life
Famous research question
Would you rather:
- earn £100,000 whilst those around you earn £50,000, or
- earn £250,000 whilst those around you earn £500,000
The hatred of goals – re-framing goals into objectives
Curating your social media experience
Where to find ancient examples of social comparison
Conclusions from the guys
Do you have any financial wellbeing questions you would like us to answer? Or do you have a #tightasstommo money saving tip you would like to share with our listeners?
If so, let us know by going to Twitter @Finwellbeing or email – firstname.lastname@example.org
If you would like to purchase a copy of The Financial Wellbeing Book please click on this link to visit Penny Brohn UK shop
Transcribe of the Podcast Script:
David Hello everybody and welcome to another one in our long running series of financial wellbeing podcasts. My name is David Lloyd. I’m – who am I? I don’t know who I am really. I’m an actor. I’m a writer, a broadcaster, a podcaster. I say a podcaster. It sounds like I do them all the time. This is the podcast on which I’m a podcaster. And I’m a general man about town. And every so often I get together with my two good buddies, who are going to introduce themselves Tommo who are you?
Producer Tommo Tommo
David Oh, it’s fair enough.
Producer Tommo Hangon I want to do a plug.
David All right do a plug, do your plug.
Producer Tommo I’m doing my plug. I am Tom Morris of ovation, finance, you happen to back this whole project. And I feel as though it’s my duty to let you all know about that. We’re a lovely ever growing company in Bristol, who are chartered financial planners and help people with their financial plans. So there you go I’ve done my advertising slot.
David I think you should like it because I am and I’m getting no extra financial incentive for this at all. This is entirely my own opinion. I am of course a client of Ovation Finance. And they look after me ever so well. And they help to turn my little pennies into large amounts. Perhaps the most important person on the podcast well, he thinks he is and so we’ll go along with it. Chris, who are you?
Chris So I’m Chris Budd. I’d like to be a man about town. I think I like that. I like that phrase man about 10. David, you’re obviously extremely well known for your many, many acting roles. And the use of man about town reminds me of Geoffrey Barnard, who was a columnist, I think for one of the newspapers and was a regular feature of the bars around Soho. And if he got to drunk one afternoon to be able to find his copy. The column would just say Jeffrey Bernard is unwell, which I always thought was a lovely expression. So and then we have a podcast and David isn’t here and we say David Lloyd is unwell. Everyone will know what’s happened. To listen, how was your play going? I’m coming to see your play tonight. I’m really looking forward to it.
David Yes, it will have been gone by the time this podcast comes out. But yes, I’m currently appearing in a play by Patrick Marber called the Red Lion. It’s sort of Bristol Old Vic. It’s going very well thank you. It’s pretty much sold out now for the rest of the run. And my first time back on stage for 20 years.
Chris Are you enjoying it?
David Absolutely loving it it’s physically hard work. I mean, let’s not kid ourselves it’s not working down a pitch or anything like that. But but I’m on stage pretty much all the time is a lot to do physically a lot of lines to learn and it’s emotionally quite hard work as well and but absolutely loving it. Thank you very much. But I must just rewind slightly. I was talking earlier about pennies and pounds. Well, I got a massive payment today through from my old agent for there was a series back in the 80s or 90s. I think it probably was called Peak Practice setting events practice in Derbyshire. And I had a small to medium part in that just one episode travelled up to Derbyshire. To record it, it was chucking it down with rain. I spent three days ducking the caravan doing the Guardian crossword with two other actors, I won’t name them because don’t embarrass them, waiting for us to be able to film this thing. And then we filmed it. We filmed the parts. And then I went back home again. And then about nine months later, I got a call from my agent saying, oh, Peak Practice want you to go back and redo the episode that you did. And I thought what’s happened here. And it turned out that these two very well known actors had been cast as major characters in this series. And they filmed three or four episodes of the whole series and then decided that these two were not working out as characters. So they got rid of them and and recast them with somebody else, which meant I then had to go all the way back up to Derbyshire and redo my scene. In the meantime, the entire episode have been rewritten and what originally been a fairly you know, interesting and meaty little part ended up with me running a longer gantry in a factory brandishing a mobile phone going – Mick, Mick, it’s for you.
Chris Oh, you still got it David, you still got it
David I got paid twice for that I got paid the first time and then I got paid again. But the payment that I got through today was for residuals because that has been obviously shown again I suspect on ITV seven or something like that. 3p it was. And my agent had not taken a deduction from it. Normally they take 15% for repeats and they’ve very kindly waived that. So I had a payment directly into my bank for 3p. So the next time we three meet up beer’s are on me.
Producer Tommo I’ve got a cracking investment idea for that David, we’ll have a chat afterwards. So I’ll give you some advice on that 3p.
David Right anyway, let’s move on what’s on today’s podcast, Chris?
Chris Well, I think that’s it. Thanks for coming, everybody. The David Lloyd story show. We’ve got an interview with an old friend of the podcast today, Neil Bage.
David Good old Neal. We’ve had a couple of interviews with him, I think down the years. And of course, he’s given us all those fabulous Bages Biases. And so what’s prompted you to have him on again, Chris?
Chris He and I were just chatting, we regularly catch up, Neil and I and we were talking about social comparison and the harmful effect it can have on mental health, not to mention our financial well being and it was so interesting, I said, you know what, we should record this properly. So I booked in for him to me and record a proper chat. So that’s what we’re gonna listen to – Neil and I talking about, mainly Neil, talking about the psychology of social comparison.
David Brilliant, look forward to that. But before we do time for the first of our two regular features. This is the big one. Tight Ass Tommo. Before we come on to the master himself, Chris, if you’ve got anything?
Chris I do, actually, like I like this one. You know how every few years money gets updated. You and I David will remember the old one pound note. For example, obviously, that’s been moved into the pound coin. Have a guess? When did the pound note turn into a pound coin? What year?
David Oh, I’m gonna say, I’m going to say 1996.
Producer Tommo You know, I can’t really remember. I think they were a thing when I was just about old enough to know they were a thing. So
Chris When were you born Tommo?
Producer Tommo 87
Chris You were one.
Producer Tommo Oh, I was one. When is it? Okay, so,
Chris 1988, yeah
Producer Tommo Maybe there was some old ones knocking about? I always remember one pound notes. My knowledge of one pound notes was Only Fools and Horses. Del Boy always I cashed in. That that’s one pound notes were a thing. Okay.
David Iused to get a ten shilling note off my grandparents for every birthday, which is like 50p in modern money. And that would last all year.
Producer Tommo And this folks is when Bill and Ben the flowerpot men were in their prime
David It absolutely was, classic television.
Producer Tommo Chris, get the host to get us back on track
Chris Back back down memory lane with David Lloyd. So money changes regularly. Fivers and tenners obviously used to be paper, now plastic. So the Bank of England recently announced that there are loads of these old notes and coins that has still not been returned. You can deposit them in your bank account, but you can’t use them in shops. So if they’ve not been returned, where are they? Now I reckon they’re down the backs of sofas and under the seats of cars, right? There are 114 million old five pound notes as 76 million ten pound paper notes still out there. Along with a whole load of old pound coins. There’s a total of 1.4 billion pounds of legal tender out in the country somewhere. So my Tight Ass Tommo tip is this, every time you visit someone else’s house, find that excuse to be alone in their front room, ask them for a glass of water or something and they’re whip off all the seats of the sofa and grab all the loose chains and notes that have got to be down there.
Producer Tommo And then, give it to the owner of the house and it will be what a wonderful friend you all rather than taking it and putting your own pocket. Tight Ass Tommo is not condoning stealing money from other people.
Chris It’s not stealing if they didn’t know they had it.
David My golf bag and my cricket bag are always the places I go look at if I’m desperate.
Chris Yes. So when you’re playing cricket, when everybody’s on the field, just put the one in and look to everybody else’s bag.
David Yeah, that’s not dodgy at all. Actually, apart from the illegal aspects of it, very good advice there from Chris. I haven’t really got anything apart from as I say perhaps appear in an episode of a popular 1990s television programme and waiting for the 3p to come in.
Chris I think we could we could say have a long distinguished acting career. Let’s put it that way.
David Alright. I like that. That’s much better. Tommo, master Tommo, the master of meanness, what have you got for us today?
Producer Tommo And do you know I? I’m going to be a little bit. I don’t know how to put this. I’m not going to be particularly funny. I’m really sorry, folks.
Chris Normal service resumes
Producer Tommo I don’t know I I can’t help notice. And I think we all know and I think by the time this episode goes out, we will also be living in it. Inflation is quite high at the moment. And one of the things that’s cost an awful lot of money is our gas and electricity with a lot of hikes. Now, for a great number of people who listen to this, I’m sure they feel some of those increases, but it’s not going to be a difference between them being able to feed their family or not. There are an awful lot of people out there that I think this is going to have a real impact or is already and are quite financially vulnerable. So I’m just thinking those listeners who do have a bit of spare cash are going to be okay by these various rises. Maybe think about putting your hand in your pocket and helping out some organisations that really get to people who are unfortunately having to make a decision between heating and eating. Places like the Trussell Trust, which are all about helping to feed people who are less well off. So I guess my Tight Ass Tommo tip, I mean, it kind of feeds into one of the areas of well being that we talk about is community and helping others and causes that. That means something to us. Yeah, have a look and see if you’ve got a bit of spare cash and try and support those that are really properly feeling the pinch of these price increases. And so yeah, I told you it wasn’t, it was a bit, bit downer, but I don’t I it’s something that I’m I’m feeling particularly worried about, and we’ll be doing something about. So yeah, there you go.
David Well said Tommo, not tight ass at all, actually. But I get where you’re coming from. And it’s relevant to this section. Yeah, very important the Trussell Trust, particularly, I do support them, and they do great work around a community. So yep, well done. Those of us who are fortunate enough to have had as Chris describes a long and distinguished acting career, with a large break in the middle in my case, yeah, I think, you know, clearly, it’s going to be tight for everybody over the next months and years. But if we’re in a position to perhaps help out, others less fortunate than ourselves, let’s do it. Right. Okay, let’s move on then to the next of our regular features, No Shizzle Sherlock – in which we listen to the words of wisdom from a financial or investment guru, and wonder whether this is indeed insightful and meaningful advice, or whether it’s a load of old tut. So Chris, watch today’s inspirational investment insight?
Chris Well, David, in keeping with what we’re going to be talking about with Neil or listen to with Neil, social media, there’s a lot of investment advice out there on social media, TickTok in particular has become a real Centre for so called investment gurus to be dispensing their free wisdom.
David Yeah, I’m reminded of the line. If it’s free, then you are the product.
Chris Exactly, exactly. So where the advice is being given, is really trying to get into the use of product that the so called guru gets paid by.
David So it’s actually a form of advertising.
Chris Totally, they’re totally, they’re trying to encourage you to use a certain app often. Often one that helps you to buy stocks and shares. We’ve talked about Bitcoin in the past and crypto coin, we’re not going to go down that particular avenue, but that is a particularly big one.
Producer Tommo Yeah, it’s something we’ve touched on before about some of these tick tock gurus. But I just think it’s really important to remind people of some of the stuff that’s out there, I think of one particular case, or example, yeah, there was it was a little while ago now. And it was on a TickTok account called @Chad&Jenny. They’re a young couple in America, and they make a living from posting stuff about their cool life on TickTok. And in this video, they explained how they supposedly fund this amazing lifestyle. Now, Chad explained that if you want to have a life like theirs – all you need to do is use a certain app, of course, pays them and then buy shares. And he told his followers, that all he does is buy shares, and wait for it to go up a few days later. Sells it and makes profit. Simple as that.
David Wow. That’s incredible. I could be rich. Obviously not as simple as that. Is it because the value of investments can go down as well as up, as we all know, even I know that, how can they get away with that?
Producer Tommo Because they aren’t regulated by anyone David. I mentioned Ovation, started the podcast, we as a firm are regulated and I as person and a regulated by the Financial Conduct Authority. The FCA for sure, and we can’t say things like that, even if we, even if we wanted to. We can’t say things like that. And you’ll notice in this podcast, we try and tread this line when we’re giving some, some ideas or some tips, we have to tread very, a very fine line. Before you start giving advice, you should know everything about somebody if you’re going to give specific investment advice.
David So talking of specifics, what is the actual tip that we are assessing here?
Chris Well, David, I thought I would present an excellent tip that I found from the American humorist Will Rogers, back in 1929. He had a great investment tip he said, buy stocks that go up. If they don’t go up then don’t buy them.
David Well, that is definitely a No Shizzle Sherlock
Producer Tommo There’s another saying that comes to mind – free advice is worth every penny you pay for it. To be very careful of investment tips and advice that you see on social media.
David Indeed, and bearing in mind that this wonderful podcast to which you are listening is entirely free
Producer Tommo It is entirely free. So yeah.
David Listen to what we say. Or you might just go well, they’re just rambling off again about their sad old lives, but we’ll leave that one up to you listeners
Producer Tommo For my compliance department, we give ideas not advice. Ideas, not advice, folks, suggestions
David Possible courses of action
Producer Tommo Musings for you to consider.
David Right enough of our musings. Let’s now get on to somebody that really knows what he’s talking about Neil Bage. Chris, over to you.
Chris Neil Bage is an expert in behavioural science, which is the study of why we do the things we do. He served as chief behavioural officer for a financial planning firm, founder of an award winning behavioural technology business, he’s presented to 1000s of business professionals around the world, on subjects like human evolution, human biology and behavioural psychology. I’d also like, humbly, to consider him a friend, and I think he’s ace. So let’s have a listen to my chat with Neil Bage. Neil, thank you again, for coming on the podcast. How are you?
Neil Bage I’m well, I’m really honoured to be repeat guest invited back. I’m very excited.
Chris You’re the only guest to be invited back third time. But of course, he also had all your Bages Biases, which were really, really well received. So thank you for your support.
David Oh, you are welcome, more than welcome.
Chris So this chat with us was was triggered by a presentation you gave to the Initiative of Financial Wellbeing round table tomembers where you gave a little 20 minute presentation on social comparison, it was so powerful. I thought our listeners in general should hear about it. So why don’t you open up by just explaining what we mean by this term social comparison?
Neil Bage What a broad opening question that is. So social comparison is kind of, an I hate to use this phrase, but it’s kind of what it says on the tin. It’s how we look around our social networks. I don’t mean digitally, I just mean, our human social networks, and we compare ourselves to other people. But equally, we can compare ourselves to them, or we can compare them to us. And it’s a kind of a well established theory. But actually, if you look at it as from a human perspective, you know, our brains, social cognition network can be traced all the way back to an evolutionary need to protect ourselves to assess threats. Is he building a better cave? Is he a better hunter? So it’s not a new thing?
Chris I was gonna say, is this new because of social media? We know it’s been around for millennia.
Neil Bage It’s been around since we kind of crawled out of trees and became a bipedal species, meaning we walked around on two legs, which can be traced back to three and a half million years at the earliest, you know, so um, it’s a it’s very much a human trait to compare ourselves to other people. But it wasn’t really until in the 50s, when a guy called Leon Festinger basically came up with what’s known as social comparison theory. And the world started to kind of take more notice of what it is and its impact.
Chris So there’s that famous phrase, which I quite often because it’s just so pithy. I think it was Roosevelt that said at first, comparison is the thief of joy. So we’re in that space, I assume I we?
Neil Bage We kind of are Yeah, Chris. But I think that that statement kind of looks with social comparison, as if it’s a one sided, kind of human trait. And that’s not strictly true. So if I jump into the work of Leon Festinger and kind of tell you, in a summarised way, what he came up with, you get to see that there’s two sides to the story. So when we compare ourselves in the context of social comparison, there’s two ways we do this, which, if we use the correct terminology, our upwards social comparison, and downwards social comparison. Upwards, means that you are better than me. Okay, so I look at you, and I think Chris is better than me, at whatever, fill in the blank.
Chris That’s very wise of you, Neil, but let’s not,
Neil Bage Lets not, exactly don’t, you know, make your head bigger than it already is. And downward social comparison is where I feel I look at you, and I think I am better than you at, fill in the blank. Now, if you kind of think of these as two pillars, so upward social comparison, you’re better than me, downward social comparison, I’m better than you. What we tend to do is look at the negative traits, but there are positives as well in those two pillars, if you like. So let’s just stick with one just for a second, if we do the upwards, that where I look at you, and I think you’re better than me. Now, the way that the world talks about that typically is in a negative way. And upwards. social comparison can elicit feelings of envy, or self criticism. So I look at you and think, oh my God, he’s amazing. Why aren’t I like that? I’m rubbish. I haven’t got the skills like he has. And I can start telling myself a whole bunch of stories that are really negative and quite damaging to the to the self. That’s the negative side. But when you look upward social comparison, in the positive, it actually can triggered feelings of inspiration and motivation. So I look at you and think I want to be like Chris, I want to do that. Oh my god. He’s amazing at that. I want to learn how to be like that. So it can motivate me to become a better person. So it’s not only the negative side,
Chris Even that though he’s got danger, isn’t it? Because if I compare myself with Paul McCartney, you know, one of my heroes, I think, great, I want to be like Paul. Well, I could never be like Paul McCartney. So actually, that could be setting yourself up for life of disappointment. So even even that can be negative if it doesn’t work out gcant it.
Neil Bage No, that’s true, but that’s actually about benchmarking yourself to something realistic, right. And it’s about, it’s about setting your goal, which is the art of smart which is realistic. So does Paul McCartney inspired me to play the guitar. Absolutely. Is he better than they absolutely will ever be like Paul McCartney? Probably not. But does that mean I can’t be motivated, inspired to learn the guitar? No, I can still be inspired and motivated every day to strive to be the best I can at playing the guitar knowing I will never be McCartney or attractant. Or,
Chris I’m going to name Joan Armatrading. Because she’s my guitar hero, actually. But I just wanted to stick on this for a second because I can see I absolutely see your point. There’s positives and negatives, but I can see so many more negatives in it. So for example, I share with you something was said to me by a friend of mine, we were 15, friend Dave, great guy, lovely bloke, but at the age of 15. We were sat on the school bus. And he’d recently discovered his first love of music, which was Led Zeppelin. And at the age of 15, I always remember him saying to me, Chris, he said, I don’t think I’ll listen to any more music. I said, Really, Dave? Why is that? He said, Well, what’s the point? Now I’ve heard Led Zeppelin, there’s no point in listening to anything else. At the age of 15. But he kind of tried to play the guitar, but he never really bothered, because he couldn’t be Jimmy Page. So it actually put him off, in a way.
Neil Bage Yeah, yeah. And I completely get that if you haven’t got a, a fine tuned understanding of yourself, and your own limitations. There’s also another conversation we should have, at some point maybe, is about the difference between expectations and reality. You know, your friend had stupidly high expectations of himself, which weren’t born out in the reality of him learning the guitar, right. And actually, when we have an imbalance between expectation and reality, it can cause a whole world of pain.
Chris So it’s very interesting. But we’re gonna come on to, to apply this to our financial decisions, of course, which is the whole point of this. So I just set that as a context, because anyone listening will, I’m sure hear that idea of expectations, not matching reality, and financial expectations, we can see how that could come together. But I’ve interrupted you enough Neil you carry on.
Neil Bage Now. I forgot. I mean, sorry, I was distracted by your story when you were 15, thinking, thinking how amazing your memory is.
Unknown Speaker Anyway, we’re gonna talk about the downward aspect downward comparison.
Chris I was so dead. So downward comparison, just as a reminder is when I think I’m better than you now in a negative sense that could elicit feelings of not pity and scorn. If you like, you know, I kind of look at you and pity you for not being as good as me. But equally, in a positive, it can elicit feelings of gratitude. And I can be thankful that actually all the work I’ve put in as made me good at something. And yes, I accept, there’ll be people who won’t be as good as me, but I can be, if I’m appreciative of the journey I’ve been on, have gratitude, and it can give me opportunity to teach, because now I’ve become an expert in something and people could do with learning what I’ve learned, so I could pass on my skills in the hope that they will also be upskilled and become better people. So to summarise this point, Chris, you know, the work of Leon Festinger, kind of, when we talk about social comparison, it is often talked about in the negative, but like anything in life, there’s a yin and yang, right, we need to also look, because we’ll find positives in all of these theories that we’re talking about here. You know, know thyself, I can think of negative aspects of really getting to know myself, I can think of any positives, there’s always that yin and yang. And if we go through life, only focusing on one side of the story, ie, mainly the negative, then actually, we we kind of do ourselves a disservice because we fail to spot that there is also goodness in here, too.
Chris And so the message from this section really is it’s about how you react to these things, isn’t it? It’s our choice, what we think of ourselves what we think of other people. So let’s, let’s now take that, that and lets just magnified and expanded to being something that happens a bit too, with the advent of social media, something that happens all the time constantly around us,
Neil Bage which is comparing ourselves to the Joneses
Chris Shoved in our faces, shoved in our faces constantly, isn’t it because of Facebook and social media? And the point you’re making the picture of the baby if you could just explain that picture that you had in that talk? Because I think that that highlighted it absolutely beautifully.
Neil Bage Yeah, absolutely. So you know, the world we live in, you know, social comparison is is inevitable, right? It we just talked about how very briefly, I would say, you know, it’s a human trait that goes all the way back kind of, to our roots as a species. So comparison is inevitable, but social media amplifies it more than ever before. And the problem that we kind of have with social media is all you’re ever seeing is somebody else’s highlights reel of their life. You know, it paints a heavily skewed picture of their social universe, they only share their peak experiences, or flattering news, they show as a narrow and distorted part of their reality. And the thing that is most damaging more than anything is it’s a perfectly constructed environment by the person, they construct what we want to see when we want to see it, and how we want to see it. And the picture I showed in the talk was, I had a screen where there’s a multitude of kind of Instagram snapshots on the screen. And the title of the screen, and a phrase I’ve used many times, is living in a cropped existence. And I asked people to look at the pictures. And the question I asked is, What is the picture hiding? Not what is it showing us? But what is it hiding, and there’s a picture I use of a baby crawling on the floor playing with a tractor, everything looks beautiful, and the little catchphrase, #baby, and all of this, you know, #happylife. And you look at the picture, and you’re cute that is. But then what I do is I take away the filter, I take away the crop. And sitting next to the baby crawling on the floor is a picture of a young mother who’s pretty much having a nervous breakdown. And the problem we have is we look at these snapshots, these cropped images, and we assume that everything is rosy in the garden. And sometimes, in fact, many times that is just not the case at all, you know, so we need to kind of stop and consider that a lot of our online activity is comparing ourselves to other people’s curated and edited highlights reel. And that can be really damaging.
Chris Yeah. So just as a slight aside, on the odd occasion, I’ve posted I did one just the other day actually working from home, as many of us have been in the last few years. And I’ve been doing it a few years before that. So this cabin I’m currently standing in, I’ve been in this 90% of my working day for about four years now. And I love it. But there are days when you get a little bit stir crazy. And I posted something the other day, which just said, I’m struggling today. I’m not having a good day, I just saw on Twitter, I would really love to just have a meeting with other people. Today’s not a good day. And I had loads of people come to me says so glad you said that. I have days like that, too. So actually, if we do share our struggles a little bit people do react to it. But of course, that’s not your point. That’s not what we tend to do. But I guess that’s just a message out there for our listeners to say, Yeah, please do, reach out when you’re struggling a little bit because everybody else is going through the same thing. But listen, absolutely. Let’s Let’s now turn our attention then to how might this lead to poor financial decisions? This only seeing other people’s dreams? Say this, the highlights reel, as you call it? How could this lead us to making bad financial decisions?
Neil Bage Well, I mean, the first area that it affects is when we are goal planning with clients, you know, when we say to people, okay, look, we’re going to sit down, we’re going to talk about your financial plan. And what I want to, what we would like to explore are your dreams, your aspirations, your goals, what you want, what you want to do when you retire, whatever that word means. And you know, and what people do is, they typically do one or two things, they look back into their memory at events and experiences that they loved, and they carry them forward into the future. You know, one of the things I’ve often said is that humans are the only species who can kind of affect our temporal timeline by, we can do time travel, in essence. Within a split second, I can ask you, Chris, to go back in time – memory, and I can ask you to go forward into the future – imagination. And we are the only species that can do this on the flip of a coin, right, I we can go back to when we were 15. Talk to our friend about Led Zeppelin. And we can think about our future sitting on a beach in Jamaica with a guitar and a bottle of wine playing guitar on a beach with your wife, right?
Chris Is that you promise me? Is that going to be my future?
Neil Bage I don’t know. I don’t know him. No, I think that’s your dream. I just kind of think it’s, it might be knowing you.
Chris It’s close.
Neil Bage Maybe a bottle of rum, I don’t know. But what we do so we do these two things we use our memory to to give us a framework. So what we want to do in the future, or we look to other people for inspiration, and we look at what other people are doing and what they’ve done. And we go oh that looks amazing. I want to do that without appreciating or stopping to think I’m seeing A cropped existence. I’m seeing what they want me to see. And therefore can I take that on face value? So it? So there flip that into the question you asked me? If I’m thinking about big important financial decisions, and I’ve never made a decision like this in the past. Yes, I can take my financial planners advice. Yes, of course I can. That’s why I’m there. But I would also just naturally look to other people and what they’ve done, I’d speak to my friends, have you ever have you ever done any retirement planning? Have you ever invested in stocks and shares, etc, etc. So it’s a natural human inclination to kind of draw wisdom from the crowd, our crowd in this example being our closest friends. And and what we are doing is we are going through a variation of social comparison, to figure out what others have done to give us a framework to make a financial decision for ourselves. And unless we, unless we dig properly, unless we peel the onion properly, and get to the heart of why they did what they did, then all we’re doing is we’re making a decision for ourselves that’s based on somebody else’s life. And that is just, in my humble opinion, a recipe for disaster further down down the line.
Chris Theres two particular examples that come to mind. You mention the investment piece, especially people who manage their own stocks and shares and invsetments. Vary, very rarely hear somebody like that tell you about the share that they brought that went down 30% the next day. You only ever hear when they invested in something and it was the most fantastic thing, Bitcoin being the most obvious example to that. You dont hear of the money lost, you only hear of the money won, dont you.
Neil Bage And that’s because, going back to what I said, probably going 5 minutes back, social media, everybodies highlights reel all they do is share peak experiences and flattering news, they never say – just invested all my money in Bitcoin and lost the lot, damit. They dont do that. They go, I just put all my money in Bitcoin and made a lot of money. And thats a lot, thats social comparison, sitting around that is they dont want to come accross embaresed or looking stupid or looking ill-informed. Thye’d rather just not tell anybody their suffering rather than go, I’ve done this, what do you think I did wrong, is there anything I can do to make myself better in the future etc etc. There’s one example Chris if I can, about financial decisions and how social comparison has an absolute cast iron grip on us when we are trying to navigate the money world if you like. I think that’s your dream, I just kind of think is what it might be knowing you’re making a bottle of rum, I don’t know. But what we do is we peel the onion properly, and get to the heart to make myself better in the future, etc, etc. Just this one example of just as I can about financial decisions, and how social comparison has a absolute kind of cast iron grip on us when we’re when we’re trying to navigate the money. Well, if you like, There’s a very famous research question. And I’ve asked this question so many times, and friends of mine in behavioural psychology have asked this question so many times.
Chris Is it what we can do live?
Neil Bage we could do a live gun last weekend? Okay, so this has been you and all of your all of our listeners. And you’ve got to answer the question, honestly. Right you can’t pretend you whatever your gut tells you just go with it and we can dissect the answer in a second.
Chris You know me well enough by now I have no choice but to answer everything, whether I intened to or not.
Neil Bage I know that. So here’s the question. And you’ve only one or two choices. Okay? Would you rather earn £100,000 a year, in a community where the average salary is £50,000? Or £250,000 a year, in a community where the average salary is half a million.
Chris Right? So,
Neil Bage Yes, yes, there’s, there’s all sorts of kind of micro/macro issues that you could think about, your cost of living, blah, blah, blah. But I want you to answer this question just on the face value. Without being too clever about it.
Chris Yeah, so listeners, so £100,000 salary for me, all my friends want 50 or £250,000 salary from me, but everybody else is on 500. I mean, on the face of that my gut feeling would be to take that £100,000 because if I’m living in an area where isn’t on £50,000, there’ll be more stuff, then we’re gonna have more earnings and other people. So that will be my gut feeling.
Neil Bage Yeah, answered like a financial planner, by the way. Because most financial planners go oh, well, if it is £50,000, that means therefore, that the socio demographic environment? No, no, no, no, just look at the numbers and just tell me what your gut is. And what most people’s gut reaction to this question is, is there rather than more than other people?
Chris Yeah, so I’ve taken a look at salary, so that I’ll earn more than other people haven’t I?
Chris I walked straight into your trap Bage.
Neil Bage Another podcast feature, Bages Traps.
Chris A couple of things, I want to just finish off we’ll get into before we finish one of them you keep me up nicely, because you know how much I don’t like the idea of goals. So I, I really hate the word goals because they’re finite. And one of the things that that put me in mind of it, the beginning of lockdown last year, so March/April time 2020. I saw a few tweets from people who and it was along the lines of in the people like plagues Isaac Newton discovered gravity, what are you going to do in lockdown? I remember thinking there’s something wrong with that, but I can’t quite put my finger on it. I think we have.
Neil Bage Yeah, and again, yeah. I mean, it’s just people, comparing other people to themselves, other people or other people to how everybody else should behave and how everybody else should think and it’s just, it’s just a recipe for disaster. You know, I think goals is an interesting word, Chris, and my good friend, Brian Portnoy, I know you talk to Brian before, he does a lot of talks around anti goals, talking how financial planners should talk to their clients about what they don’t want. We all talk about what they want, would never know what they don’t want. And actually, both of those conversations are equally as important as each other. And one of the things that by doing that we can we allow a client to talk about their dreams and their aspirations based on things that they’ve learned but didn’t work out quite as well as they would have hoped. Whereas just talking about the positive side of your life, kind of again paints a bit of a highlight reel for the direction that people want to head. So we just need to be careful with goals. I know you use a phrase that I’ve stolen many times, you know, goals are finite when you get there, then what? I’ve always, always remembered you saying that it is such a powerful statement because it’s true. Whereas our dreams, and our aspirations of life ever changing, ever moving, you know, they bolt with us as we age. And as we experience the world, were saying, I want to retire when I’m 61. And I want to live in this. When you’re 61, and you’re living there, and you go, Well, what do you do now? Got another 30 guys left mate? Well, now what you’re going to do? Just, I mean, we always dream, we’re always dreaming. And we’re always aspiring to be better and do great things. And that’s what we should focus on, because they’re the things that are so emotionally driven. But they’re the things that make us get out of bed in the morning. So as long as the I’ll wrap up by saying as long as they are our dreams, our aspirations, and they aren’t being fueled by somebody else’s highlight reel. Yeah,
Chris There’s a lot of stuff you see from motivational speakers or Tony Robbins types of this world, which go on about goals and achieving this and having targets and goals. I find it exhausting sometimes I just want to be in a get up for breakfast to them to you know,
Neil Bage It is knackering, right yeah, you’re gonna have a goal today to walk across hot coals and they got brilliant then what. And you’re gonna have sore feet for three weeks. You know, come on.
Chris The know myself breaking news. That’s what we’ve always talked about within the financial wellbeing book, in the podcast and also one of the five pillars of financial well being is a clear path to identifiable objectives, which regularly listen to this podcast, we’ll know when we drill down on that we mean intrinsic motivations. And that means what’s true to you, not what’s input into you by comparisons from social media. So I wanted to end with how we can overcome these social comparisons to make better financial decisions. But maybe I think we maybe we’ve just been there have we just we just inadvertently stumbled upon the answer.
Neil Bage I think we have, I think we have it’s a really is, Chris, a process of sitting down and going right, look. So let me give you my example, right? It’s me and Sandy, my wife and our little dog, Archie. Because the three of us that’s our little family unit. And when we make decisions, what we do, and this is in, I’m in my mid 40s, and it’s taken me a while to figure this out. If I’m being honest, I studied human behaviour for a long, long time. And it’s only recently I guess, I’ve landed on this. It’s sitting down and going, You know what, I don’t care anymore what anybody else is doing. I don’t care what anybody else is thinking. Me and Sandy, and our little dog, Archie, that is my world. Everything that I hold dear. Everything that I get up and I live my life for is in that little tiny unit. So therefore every decision I make, has to exclusively benefit that unit. And if it doesn’t, we kind of don’t do it. And what I stopped using social media, I’m on Twitter, and I’m on LinkedIn. I’ve never ever been on Facebook, I hate social media and that passion. I think it’s, I think, at best, it’s toxic. And, you know, it’s, I don’t spend my time there. But I, I could quite easily imagine if I did, I would be suckered into what everybody else is doing and think that that’s what I want. So I’ve learned to immunise myself from the outside world to a degree of when I’m making a decision about my happiness, about how I can be content, I think about me Sunday and Archie and make decisions exclusively based on that. And hopefully the outcomes of my decisions lead me to more content life.
Chris That is wonderful advice Neil, absolutely wonderful advice. My social media places Twitter, I don’t do Facebook either. But on Twitter, the important thing is to make sure you curate your Twitter experience. So I do it in two ways. One, there are certain people who are very negative and so I muted them. And suddenly my life was already better. But the other thing I ran the other day, this is just this just goes to show that even though a smarty pants, who know the theory was true to ourselves, I went on Twitter the other day, not feeling my best in the morning. And I saw that a couple of people were doing a conference, we’re speaking at a conference and I started thinking, Why was I invited to speak to that conference, I’d be really good speaking at that conference. And then I felt really in a fun trick at the life until I suddenly hit myself over the head with what you’re talking about. You’re talking other conferences, just because some of these talking you certainly realised that I just wanted straight back into the trap again. It’s
Neil Bage So easy. It’s so so easy to fall into the trap and, and I have to be really careful, consciously careful when I’m on Twitter, of not just kind of – you’re like me, right, you look at something and you go, Oh, I’ve got to reply to that. And you hit Reply to tweets, and you type something, and then you read it, and you just delete it. Because you go, actually, I don’t want to do this. I don’t I don’t want to engage in this conversation because it’s negative, damaging. I guess I have an opinion. But you know what, I’m going to keep that opinion to myself, because that’s all it is. It’s an opinion. And all it’s going to do is pour fuel on the fire. And you know what? excuse I was, excuse all your listeners want to say, but I can’t be arsed. I really can’t. It’s just it’s just kind of drains you.
Chris But that’s that’s the thing. It’s not so much that you cant be arsed, you know that it will have a negative impact on your energy levels. That’s the thing. So let’s just wrap this up then with with with bringing this together. So you’ve you’ve explained where social comparison comes from, how it can lead to poor financial decisions. There’s nothing wrong with making comparisons per se as long as you’re very much aware of the negative impact it can have on you. So a reasonable way to summerise it?
Neil Bage That’s a absolute perfect, reasonable way to summarise it. And if you want to read more about social comparison, you get to understand how ancient it is. There’s two places you can look the book of Genesis, in the Bible. Genesis 37 is the story of Joseph and his amazing Technicolour Dreamcoat, best example of envy and social comparison. And, of course, Shakespeare’s Othello is peppered with social comparison and the Iago/Othello conversation where the phrase the green eyed monster of envy came in is all of it all wrapped up into this, to this kind of theory that we shouldn’t be looking to others for, as a benchmark for our happiness, we are utterly, absolutely in control of that ourselves.
Chris So now that you’ve just finished this with two fantastic, intellectual, cultural comparisons, we’ll leave everybody on that no, because there will be thinking that we’re really clever people. So let’s leave them comparing us to Neil, really appreciate it.
Neil Bage You’re welcome to take
David Fascinating and insightful stuff from the power of you as ever top I’d say about that?
Producer Tommo Other than I just find everything that Neil says absolutely fascinating. I found it quite interesting. This idea that comparison is the thief of joy. But only if you look at it in a certain way. There is a way in which you can use comparison in a positive way. And I think that’s, that was quite an insightful comment, because we only ever look at the negative connotations. But I must admit, I’m not a million miles away from Neil’s opinions of some social media apps, that’s for sure
Chris The danger can be a concern. A lot of people don’t use social media at all anymore. And I think, and I made the point in the interview that social media is fantastic, you do need to curate it. You don’t want to just go on Facebook and see everybody telling you how wonderful their lives are because as Neil says it is a cropped existence. But I work hard at my Twitter experience to make sure I get rid of this disagreement, which is I love those. It’s the unpleasant people that I don’t want to have in my life. So once I worked on that, it’s great. So I don’t think not having social media is necessarily a great answer, if it’s not for you, it’s not for you. But I get loads of ideas from it. So I personally I love it. But yeah, curating your life really, isn’t it?
Producer Tommo Well, that’s a really interesting point. So so back to say something about the curating if you think about the way we live our lives, ignoring social media, so we think about the friends we built up over the years, the fan, certainly family, definitely disagree with family, you’re stuck with them for life. But it’s okay to disagree with friends who will have different opinions. I found over the years, I don’t really have the mystical folks who dragged me down and why have them in your social media lives. I think it’s really important to have people who don’t share all of the opinions that you have. I think it’s quite good to be challenged as a person sometimes. But yeah, definitely the Debbie downers. Yeah. With you all the way there.
David Yeah, very true. Indeed. Very true. I remember when, when I first started off on Twitter around about the same time as you I think, Chris, it was generally a sort of fun and joyous place. And then it gradually became more and more poisonous. And so like you, I started to curate quite carefully what my own Twitter experience was going to be. And anybody that that came on there just spreading harm and hurtfulness and hate, I just don’t engage with it. And I think if you can be selective about what you do, then I think there is a place where
Chris You literally choose who you follow. You know, that’s how it works.
Producer Tommo That’s what you do in life. Yeah, this is what you do in life. You don’t hang around with people who have that, who do that.
Chris Present company excluded?
Producer Tommo This is unfortunately, a forced endeavour,
David I once voiced an opinion on the moral integrity of the current prime minister, or at least the current prime minister at the time of this recording, only to be met by somebody on Twitter who told me he was the best Prime Minister we’d ever had. So I stopped following that one.
Producer Tommo I did say its healthy to have people who disagree!
David Anyway, enough of that we’re gonna have danger of straying into the world of politics, which is not what this podcast is all about. Thank you very much, Chris, for that really insightful Interview with Neil, thanks to your channel as well as ever for producing the programme for the great contributions that you’ve made. And thanks to you all at home for listening and I hope you’ll join us again the next time we do another one of these financial wellbeing podcasts.
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