Mindful Money: The Psychology of Financial Well-Being with Derek Hagen

Josh St. Laurent: Welcome to the Wealth in Yourself Podcast, a show dedicated to helping you master the complex subject of money by simplifying it through stories and actionable advice. I'm Josh St. Laurent and this is Wealth in Yourself. Josh St. Laurent: Welcome to the Wealth in Yourself Podcast where we help people to design their ideal life and take control of their time and money. I'm your host, Josh St. Laurent. Today we're joined by Derek Kagan. Derek is a certified financial behavioral specialist and certified financial therapist, level one practitioner, specializing in meaning and valued living. In addition to working with individuals and couples, Derek trains advisors on the psychology of financial planning, both as a fractional financial behavior officer and through training courses. He writes about the psychology of money and living a meaningful life using simple drawings and his weekly newsletter that advisors can license. In his spare time, Derek enjoys playing squash, pickleball and all things outdoors. Josh St. Laurent: Derek, welcome. Glad you're here. Derek Hagen: Thank you. Thank you. Josh St. Laurent: Yeah, hey, so for anyone listening who isn't familiar with you and your work, what should they know about Derek and what you do? Derek Hagen: A lot of doors we can walk through with that one. But if I were you to go 30,000 feet high, it is demystifying money, helping people recognize that money isn't the goal. Money is a tool that people can use to live meaningful lives. Now what that means will be different for everybody, but at its core, people assign meaning to money that money was never meant to have. And this is a result of no fault of their own. It's their upbringing. But once you can shed this idea that I need to have money as my goal, I need to chase whenever it's success or money or things or whatever, then you can focus on what actually matters and then recognize the money is the tool. Derek Hagen: It's an important tool, of course. You have to know how to use it, but it's just a tool and then a person who dies with the most tools, the first new dies with the most jelly beans still dies. So what can you do while you're here to get to the end of your life and say that was meaningful? Josh St. Laurent: Yeah, absolutely. And I appreciate that you demystify it visually for a lot of people through your drawings. I'm curious, how did that come to be? Was there a lot of ask from clients to learn more visually or how did this come to be that you're using the visuals to help people kind of demystify finance? Derek Hagen: That's a good question. It didn't start from clients saying, hey, could you draw this picture? But it was reinforced by people after having seen some drawings. And so I've always just been a drawer. Derek Hagen: I don't want to use the word artist, but I've drawn most of my life and that started with like actually trying to draw what you would call art, trying to put together pictures and draw and do these kinds of things. And then later, when I started working with clients and even non-client colleagues, I'm just a visual learner and I've learned that many people are. That means something different to everybody, too. Sometimes just putting one box on a paper and then a circle on a paper with an arrow between us two things is enough to people to say, oh, I get it now. I know how funny that sounds, but just enough to say, here's where the money comes and here's where the money goes. And this is on a piece of paper. It's profound for some people. It started with just some scribbles and then I had some training over the years. Derek Hagen: I was trained by a guy named Carl Richards, who is known as the sketch guy. I've read all the books and did a little bit of training with a guy named Dan Rome, who was known as the, well, he's the back of the napkin guys. He's all about visual communication. And then just on top of that, I've been drawn to other visual communicators. So there's a blog, for example, called Wait, but why by a guy named Tim Irwin and he does just brilliant stick figures, but he tackles really deep things with stick figures. And so I've leveraged some of his ideas, too. And that's all of that is all in favor of trying to not mess things up. Let's just cut through to what do you need to know? And here's how you can, how you can see it. And I've even used this with listening. Derek Hagen: You can listen with pictures. And this comes from training with the guy named Ted Clontz, who is one, he's a listening guy, listening first. His main focus is listening. If there's ever a problem, I'm not listening well enough. This is a pretty good mantra to have. If there's an issue, I'm not listening well enough. So one of his ways of listening is you can listen with shapes. You can listen with reflections, which is repeating back what you heard, but you can also reflect quote unquote with pictures. So here's what's really about this. Here's what I heard you saying. And you sketch out something. It doesn't even need to be good. In fact, it shouldn't be good. Here's what I heard you saying. Is that right? Because now what you're doing is you're both focused on this piece of paper or on the white board if you're using zoom. Derek Hagen: Their attention is focused on what you're drawing and then they'll correct you. You might not get it right the first time, but that's okay. There's no penalty for guessing wrong when you're listening or drawing to listen because they'll correct you. They'll tell you what they meant. Sometimes they'll take the pen from you and they'll draw their own picture on what they meant. It's just powerful to put a pencil onto a piece of paper and sketch things out. Josh St. Laurent: Yeah, most definitely. I think of the concept of mastery and I've heard it described in a way that's like it's one thing for you to understand something on a deep level, but it's entirely another thing to be able to help someone else understand that complicated thing in a simple way. And I think that the drawings do that. I love the concept's work around exquisite listening and reflecting. I think it's huge. Can you talk about maybe some of the main concepts that need to be demystified? Maybe something you run across often, whether it's with clients or advisors, what are some of those concepts that you like to kind of boil down? Derek Hagen: The biggest bang for the buck, I think, we can go back to this listening thing. If ever there's a conflict or if ever there's something going wrong, if ever there's something that doesn't feel right, if you use the Ted method of I'm not listening well enough, you can lead into that. So let's demystify what that is. And I don't have the ability to draw over a podcast, but I can try to paint a mental image for you. Derek Hagen: If you think of the lower left portion of your visual field, there's a circle there. This is what you think because you've got all these thoughts floating around your head with humans have about 50 to 70,000 thoughts a day. Derek Hagen: And if you've had any experience with mindfulness meditation, you've seen how much your brain pops back and forth. It's hard to keep your attention on one thing, you know, like your breath or a sensation or a sound or whatever is you just can't just bounce his back and forth. That's the point, recognizing the nature of your mind is step one. And it's all it's admittedly the toughest step. So you've got all these thoughts. It's like a big bowl of spaghetti. Either they're not articulated. And even if you've tried thinking a lot, if you're anything like me going to walk and I'm going to think this through, I never get through it. At the end of the walk, I started thinking about something else because these thoughts took me to something else, which took me to something else. And then I didn't even finish when I was thinking about so God, this big spaghetti bowl of thoughts. Derek Hagen: And then you asked me a question or otherwise elicit some information from me. And we can talk about why questions might not be the best layer. But so you've elicited some inspiration. Tell me about how your day was or tell me what you think about this or tell me why you're here. I'm not going to be rude. We're going to try to answer. So in the in the upper left part of your visual field, you've got another circle that says what you say. So you get an arrow from what you think goes up to what you say. So I said something. I took a stab at answering your question. And when I said it may not be what I meant. Now top left to top right. You've got what you say to what I hear in this top line. This is what most people think of is listening. Derek Hagen: Listening is you say the words and I hear the words. I don't have any data for this, but I would venture this is high 90s percent of people would think what is listening? If you say something and then I hear something, but at best, best, that's the hearing line, not listening, just hearing. Now, worst, it's waiting, waiting for your turn to talk. Because that's good. A lot of untrangle people too. I'm just waiting for you to stop talking so that I can insert my own opinion. So what you say naturally is not necessarily what I'm going to hear. Then you've got this final line that most people don't think about. Now that I've heard what you said, you can draw the arrow to the lower right. Now I have to make an interpretation of what I think you meant. So there's a lot of links in this chain went from what you meant to what you said to what I heard to what I think you meant. Derek Hagen: So our default mode is to assume we got it right. I assume this is correct. One of the founders of a field called motivational interviewing has a, I'm going to totally butcher this quote, said it, and I was going to say it. And it's nonsensical on purpose. He says, don't trust what you think the other person might have said when they said what they thought they meant to. I mean, it's just nonsensical, but it's, you've said something that might not be what you mean. And I've heard something that might not be what you said. And then I have to decode that. And I think it's correct. Now, for a lot of reasons, much like this game of telephone that we used to play when we were in grade school, at least I did. You get a big circle and one kid whisper something to the next kid in line. And around the circle it goes. And it's comical what comes out at the end. Because there's a lot of links in that chain and every link is potential misunderstanding. That's what these links are in this visual picture that you just painted in your mind. Every arrow that is in there is a potential chance for misunderstanding. Derek Hagen: The layered on top of that, and we can go deeper into this if you want. We have inherited a negativity bias. Humans, that is negative stuff is going to be perceived easier. We're going to spot the negative stuff. We're going to remember the negative stuff. This isn't intentional always. Sometimes it is, but this is no fault of our own. I will notice when things aren't going well. I will notice when there's bad weather. When there's good weather, I just kind of expect a good weather. I don't recognize how good the weather is. And then there's so many doors we can walk through here, a hedonic adaptation and hidocrytmell is related to this. But with this negativity bias, I'm more likely, a more inclined to negatively interpret what you said. So my default mode is to assume ill will assume negative intent rather than assuming positive intent. So I'm going to respond to that. I'm going to respond to you based on my negative interpretation of what I thought you meant. And then you reverse the arrows and then you're going to respond to me with your negative interpretation of what I meant. And then we're in the gutter. You know, so the biggest piece of the puzzle here is on the bottom side of this picture that you're painting in your mind. And I from the lower right to the lower left is to close the loop from what I thought you meant to what you meant. And this is the jargon here sometimes called a reflection reflective listening is this style of listening. It can sound as simple as what I'm here and you say is you're frustrated that I game home light. Is that right? Or whenever it is. You know, here's what I thought heard is that right. And it gives you an opportunity to close that loop. And there's two major sources. If you're anything like me, two major sources of hesitancy here, one is what I'm just going to say what they said. Derek Hagen: That seems awkward. Yes, you are just going to say what they said because all you have to do is think about who's the best listener in your life. And that person I imagine tries to understand you and they try to understand you by telling you that they understand you. And if they didn't understand you, you get a chance to correct them. So you just get to reverse those roles. So here's what I'm hearing you say that's positive. Yes, you want to do that too. Get comfortable hearing. No, no, that's not quite it. Again, because of negativity bias and several other reasons, I'm going to hear that as negative. Here's what I heard. Here's what I heard. You say Josh, is that right? No, that's not right. What are you calling me a bad listener? You're calling me a bad listener. That's exactly what you said, right? But that's only one line. And even if I perfectly interpreted it, remember, there's one stage, one link in this chain that's completely out of your control. And that is what you thought and what you said. So if I heard a no, it could be because this is your first, possibly first time articulating this. And you took a guess and now it's common to hear something version of, well, I know that's what I said, but now that I hear that allowed it, that's not right. Let me take another stab at that. And then too, it prevented you from running off with the wrong information. Remember, if you didn't check in, you would have assumed incorrectly. So even if you hear a no, that's actually good. So the reframe here is, is you want to hear no? Is the more no is you hear the better your conversations are going to be. So the high level version of what's the number one thing I want people to understand. It's the mechanics of listening and out of better understands, seek first to understand, assume positive intent and get on the same page. Then you can give your opinion once you fully understand what the other person is trying to say. Josh St. Laurent: Yeah, I would love to dive deeper into this. I am fascinated by this, you know, for the financial advisors listening, I think the application is obvious, right, for helping professions how important that listening is. Josh St. Laurent: I almost want to focus on people who aren't advisors, right? Maybe couples or business partners and how they communicate about money and finances. How is this getting in their way? How is the negativity bias, you know, not setting them up for success in these conversations? Derek Hagen: Right. And all of this, first of all, just like knowing some of these terms and how this stuff, that can be enough of a not-ha moment for some people to say, oh, I get it now. That's why that happens. You know, for example, negativity bias, if you think about your grandparents, grandparents, grandparents, and you could just go back generations every other generation. You know, you don't have to go that far back that many layers of grandparents, you know, 50, 100, something like that, you know, before you get to people who they're survival, dependent on recognizing threats. If you missed a threat, you're multiplying by zero. Derek Hagen: That's your out of the gate. You're not reproducing, you're not fasting on your genes. So people who didn't recognize threats, people who didn't have the negativity bias, they didn't survive to become your ancestors, which means the people who did survive to become your ancestors were hyper focused on threats. Because what happens if they missed an opportunity? They survive until tomorrow to look for another opportunity. It's not a big deal in the grand scheme of things. Let's take the opposite. The people who were hyper focused on looking for opportunities, but I didn't really notice the threats. I died. I got bitten by that snake that I thought was a stick or whatever happens to me. I got too close to the ledge because I wasn't aware that I could fall off this clip. So generations and generations and generations of people seeking threats, that's the brain that you inherited. Derek Hagen: We have no choice. Now that you're here, you've got your genes are coated with negativity, seeking negative seeking kind of default modes. So we're just going to be looking for the negative with practice, a lot of practice. Some of what I talk about sounds easier than it is. It's easy to talk about, but actually do it. Takes a lot of practice. The antidote is to try or one of the antidotes is to try to assume positive intent, which is really difficult. I've taken some of these examples from a presentation I heard once. I saw again, I'm Simon Sinek's sequence. Then he was talking about assume positive intent. He gave some examples like, you're driving down the freeway and left lane's closed. Everybody knows the left lane's closed. There's been signs for miles that the left lane's closed. Guy comes speeding up next to you. Try to escape in front of you. Derek Hagen: What do you do? You move up and prevent this jerk from getting in. Or do you move back and let this person in? Most people by default don't want this person in, because they're not playing the same game that we do. Even they're trying to cheat everybody else. That's assuming ill will. But what if I assume this person has been unemployed for seven months? Then they finally had a job interview, but their daughter sick. Now they're because of that, they're late for this interview. Yeah, they knew that the lane was closing, but I need to get to this interview. Of course, neither of those are likely. The guy's probably not a jerk. Nor is his daughter sick and he's late for a job interview. But which one's going to make you happier? Because you're not whatever you guess. You're probably wrong. So you might as well assume positive intent. Derek Hagen: So that's kind of the, get it, takes a lot of work. And people will say, well, well, hold on. You're going to get taken advantage of if you do that. Not really. I mean, you're not, not if you're talking about people you don't know and will never see again. You pushed in the coffee line. You think this person was trying to harm you or the person just didn't see you and bumped into you. Whatever the actual answer is, you're going to be in a better mindset if you assume positive intent. But again, that is fighting all of your instincts. So it takes a lot of practice to get there. But once you can assume positive intent or I guess if I take a step back, it doesn't even need to be binder. You don't need to assume positive intent. You just, you can get there by challenging your initial assumption. Derek Hagen: This person's a jerk. Is there any evidence for that? Well, yeah, it's trying to get in front of me in line. Is there a different way to view this? Have I ever been wrong before? Is there a way I can be wrong? This is kind of roots in floss because Stoicism, but more modern folks will call this cognitive behavioral therapy. It's slowing down your thinking patterns and the idea of being we don't respond or react to what happens. We respond or react to our interpretation of what happens. And I get that interpretation is usually going to be negative. So if we can slow down, if we can put in a mindful pause, check in with automatic thought, this automatic belief that we have, then we can talk ourselves out of it. So that has implications for a lot of areas of your life with your romantic partners, with your friends, with your business partners, with your clients, strangers on the street. Derek Hagen: This is literally just slowing down your, slowing down your decision making so that you can be more aware of what you're telling yourself because you're responding to these beliefs. Most of the time we have no idea, though. Josh St. Laurent: So conscious. 100%. I think that if I could point to one concept, they really had a profound impact on me. It would be assuming positive intent. I learned that through motivational interviewing and positive psychology and some of these concepts, but just that reframe, like I'll use myself as the advisor in this example. When people aren't implementing, for example, you could interpret that a million different ways, but assuming positive intent sets the conversation up for I would argue a much more successful trajectory than not assuming positive intent. Questions like what or how versus why? Maybe you can touch upon a little bit of that. And earlier you said, questions may not be the best. Josh St. Laurent: And so whatever direction you wanna go with that, but maybe diving even a little bit deeper. And I feel myself layering questions. I'm curious about also this behavioral side. If someone says, okay, I wanna change this. How do they go about rewiring themselves or their brain or is it not necessarily a rewiring? Maybe it's more about just catching yourself, hey, I'm doing that thing again, where I'm falling into this trap of negativity bias. What kind of advice would you give somebody who's saying, okay, I'd like to kind of change and maybe not lean towards a negativity bias? Derek Hagen: Good questions, several questions in there, a lot of doors of a walker. I'll start with, how do you elicit information from other people? Earlier I said, questions might not be the right thing to do. You said what's versus how's and why's? So let's think about this. Derek Hagen: And we can do this through the lens of, yeah, we can go deep, we can go deep on your shoulder. So depending on who you talk to, there's many different core human needs. But according to my mentor Ted Klantz, he's got six basic needs, safety and security. Number one, this is more of a physical psychological to you, but mostly a physical need. I need to feel safe. I need to feel secure. But then there's also belonging and connection. So belonging is the feeling that I'm a part of a group. I'm a part of something. And connection is I have interpersonal relationships within that group. So I'm in Minnesota and the twins just lost in the playoffs. Belonging is, I am a twins fan, I'm a Viking fan. Connection is having people to go to the twins game with and to cry with together after we lose both home games. Derek Hagen: So that's the belonging and connection. Self-expression comes right back to listening, which is I need to be heard. I need to feel like I have a voice and my voice is being heard. The significance, I need to feel important. I need to feel like my life matters and finally I need to feel a sense of autonomy. And autonomy is the number one need that shows up everywhere. If you're looking at self-determination theory, autonomy is one of them. Autonomy has its roots everywhere. We need to feel like we're making our own decision. I can't be told what to do. Which you'll see it now. After I applied to C, you'll see this everywhere in every movie and TV show that you watch. One very low-hanging joke is to have, and it's usually a wife talking to a husband, but it doesn't have to be. The wife will say, do you need to do something? Derek Hagen: You need to go mobile law. And the husband will say some version of, well, I was going to. I'm doing this because I don't want to. Not because you told me to do it. And that's the common joke that you see, but it's an autonomy joke. It says, I was on my way to mobile law. You told me to do the law, and now all of a sudden, I don't want to do it anymore. Because even though I was on my way to do it, now I'm told what to do. Now I don't want to be told what to do. So what those in mind, when you ask questions like, why I'm going to take a pause and say, what I'm going to propose here is try to get to a state where you don't ask questions. If you have to add, I know I want to start with questions. Derek Hagen: And one of the ways to stop asking questions, if you're going to keep asking questions, how can you massage this? So first stop asking why questions. Why is asking about motivation? Why is asking about, as a core, it's kind of asking about your autonomy. Why do you choose to do this? And if you trace this back in your childhood, you were asked why a lot. Usually, why did you do this? Usually, it's going to angry tone. Why did you do this? Why did you do this wrong? Why could you do that? Why didn't you do this? Why questions always make us think that there's a right in the wrong answer? In fact, most questions do. But a why question just hits us like we're in trouble. Even if you try to think of the most simple, the most innocent thing that you can think of, why did you take that route to work? Derek Hagen: No matter how you say it, it almost has this tinge of why are you asking me? Do you say I did it wrong? As I just said it out loud, I kind of felt a little jab in my brain. Like, why do you have a Yeti microphone? What's wrong with the Yeti microphone? I don't even want to say, oh, because all the reasons that I actually bought it, my default mode, and of course, everybody's going to be on a spectrum. This not everybody's going to take this the same way I do. But there's often some layer of a why makes me want to dig my heels in and defend myself. What questions are a way that you can avoid that? And you can ask the same question, you can ask the same why question with a what? Very easily instead of saying, why did you buy a Yeti microphone? Derek Hagen: You can say, what is it about? Yeti microphones is spoke to you. And just that simple reframe helps on a lot. So if you've got clients who aren't implementing, they didn't go see that estate planning attorney, or they didn't go change that insurance policy, why didn't you do it? Turns into, what do you think got in your way? Or something like that? And then the way to get rid of questions is to drop the question mark from it and turn it into a statement. And questions, just all questions, even if you say, what is it about the Yeti that you liked or what is it that got in your way? It's still a question and questions remind us of our 13 year long or longer education system where there was right answers and there was wrong answers to the question. If I elicit information, you can again, do the same thing to drop the question mark and the end of your sentence that's coming up. Derek Hagen: At the end, you just leave neutral or go down. So what does that mean? That means, how is your day? Turns into, tell me about your day. You're getting at the same thing, but you're asking it completely in a way that is more inviting. So I was gonna go see that estate planning attorney, but I didn't. And the way to get more information there was, and this is kind of blurring a lot of things there. I'm taking some of these examples, some motivational interviewing and everything there, but that's good. So you thought about, you had planned to go get your estate planning attorney. That's great. Tell me what could help you, tell me how I could help you next time. So tell me, I'm curious about, these are good ways to turn a question into a statement. And when you do that, it just kind of opens it up to a more inviting, inviting way. Derek Hagen: And then from there, I think the next question was, well, how can I change my wiring into getting rid of this negativity bias? And then you said something to the effect of, well, maybe I can't change my wiring, but maybe there's something that I can do in order to maybe experience negativity bias less. So there's a lot of ideas, and I'll just throw some out, whatever hits with you as you're listening to this, maybe some will work. And don't take this as gospel either, compare this to other things you hear, and see if it makes sense for you. But mindfulness training is really helpful in this regard. And mindfulness is at its core being more aware, being more aware of what's going on. And I use this example a lot. It's not mine. I got it from the book, The Happiness Hypothesis by Jonathan Height. Derek Hagen: But our mind is kind of like an elephant with a rider on top of this elephant. Fans of Daniel Coniman will know thinking fast and slow. His version of this divided mind of system one and system two, or the fast brain and the slow brain. You've heard of Ed Ego and Super Ego. There's just different ways to let the mind. But what I like about the elephant and the rider is that the elephant represents your subconscious mind. And this is the part of your brain that makes 90 to 99, call it 95% of your daily decisions. No conscious awareness of this at all. So even to use the word decide, in quotes is probably incorrect. This is the part of your brain that decides to grow your hair, or it decides to digest your food, or it decides to sweat. It decides to put one foot in front of the other when you walk. Derek Hagen: You don't need your conscious effort on these things. It saves it and it does this automatically. Now this can also be trained. And by that, I mean, when you first learned how to drive a car, you're probably hyper aware of what's going on because the rider, which is the conscious brain, the deliberate part of your brain, was in full control. I don't know what's going on. There's all these pedals, there's all these buttons and knobs, and there's a huge steering wheel, and there's a big heavy thing. And I don't know what I'm doing. And now you've trained this elephant so you can now have coffee, have a conversation, and you can listen to Josh's podcast while you're driving your car, because you don't need your conscious effort for this anymore. And admittedly, sometimes something will happen, something will jump in your periphery, and boom, the rider jumps back online to take over, but the elephant represents something that you don't do with any conscious effort. Derek Hagen: So the rider is the one that's kind of the deliberate thinker. When you think of me or I, you're thinking of the rider. This is the part of the brain that can think about the future and make plans. This is the part of the brain that understands consequences, and it can control the impulses of the elephant in normal times. And here's where I like this analogy the best. In times of high stress, what I call emotional flooding is something scares the elephant. If this elephant thinks or your subconscious thinks one of those six needs isn't being met, something scares the elephant, the rider doesn't have any control anymore. The elephant's just going to do what the elephant's going to do. Until the threat, the mouse, or whatever it's scared the elephant is out of the way, the rider is just along for the ride. So most of our life, most of our world is residing in the elephant. Derek Hagen: It's residing in default mode. Mindfulness is about giving more awareness to the rider. Again, there are some things that you want to train the elephant to do, but some of these things you want to go the other way. You want the rider to actually have more awareness of what's happening. Why am I responding in this way? That's probably something I want to know instead of residing in the subconscious. Why am I acting in this way? Why am I doing that? Why do I feel this? And I'm using these Ys deliberately, because even though those are questions I don't want to ask you, when I'm thinking about myself, it's a shortcut to, there's a reason I'm feeling this, and I don't know what it is. If I can pause, then I'm making this a deliberate action. I'm bringing this up to the realm of the rider. Derek Hagen: So another drawing, go back to the drawings, that I like, is to have two boxes, and those boxes are right next to each other. One of those is called stimulus, and one of those is called response, or you can call it impulse and action. Stimulus and response goes back to Victor Frank, all from a man's, or from a man's search for meaning, but stimulus response or impulse action. When these are too close to each other, the elephant is making the decision. Something happened, and bam, I responded, I reacted really, I reacted to it. Like the doctor hitting your knee with a hammer, your leg goes flying, you didn't choose to do that. It was a reaction to a hammer hitting you in the right spot. If you can grow the space between impulse and action, between stimulus and response, now that space, mindful space, allows you to make a mindful response. Derek Hagen: So you're gonna respond instead of react, and you do this by slowing down, and slowing down 70,000 feet high, that's the biggest advice across every single life domain you can think about. Slow down, and slow down, why am I responding this way? Why do I think this person did that? So assume positive intent comes with slowing down. My default is to assume ill will usually. Slowing down allows me to, and maybe I don't even go all the way to assuming positive intent. Maybe it's just, that's probably not what that person's motivation is. Slowing down means how was going to say this? Maybe now is not the right time to say that. So slowing down is the act of, so you're never gonna get rid of negativity bias, but what you can do is learn to put more space in between stimulus and response. Mindfulness and mindfulness meditation help with that, but there are other ways to do it. Derek Hagen: Cognitive behavioral therapy is one, which is fact of the end of the blow, it's just basically something happened, call it a trigger, and then there's my response, there's my action, my either I felt something or I did something. Can I slow down and wonder what led to that? I use this ABC model, Albert Ellis came up with, which was kind of the precursor to cognitive behavioral therapy, ABC adverse event belief consequence, and this consequence could be an emotional consequence. So I felt something or behavioral consequence, I did something, that's every step of this way, there's insights. So if I can just become more aware, maybe I even have a journal or a log, an ABC log, when I felt something strong, or I did something out of ordinary, and I raised my voice, or I got angry, you're envious or something. She's just becoming more aware of what you're feeling and what you're doing, that's the cost of admission. Derek Hagen: I mean, that's worth the cost of admission there, you're coming more aware of your feelings, you're becoming more aware of what you're doing, bringing more of this stuff into conscious awareness. So that's insight number one. Then you can go back to that A, that adverse event, and this doesn't always need to be negative things. A adverse event just is the nice ABC. So you might call it activating event, is this worked for positive things too. So just some adversity, why did I just do that, or why did I just feel that? What happened right before that? It's an idea to become more aware of your triggers, and there's insights to be had here as well, that if I can become more aware of my triggers, that's the information that I can use. And sometimes it's not something external, sometimes I thought triggers these things. Sometimes I had this thought, okay, I'm feeling really envious right now, but nothing happened, I was just laying in my bed, you know, trying to sleep. Derek Hagen: Oh, well, I had the thought. So in that case, the thought was the trigger. I had this thought, oh, something, and that was the trigger. There's insights there. Now the hardest, admittedly, the hardest part is to close the gap. Why did this A adverse event cause this C consequence? There's a belief in there, and I use this silly example to demonstrate the difference here. There's an author that I like named Malcolm Gladwell. I imagine many of your listeners will be familiar with Gladwell. He was on a radio show, the host. He was, I think Malcolm was doing some research on why are there 50 kinds of mustard, but only one kind of ketchup. And this is the kind of silly question that he likes to look into. And the host said, oh, that reminds me of grocery stores. And don't you hate it? Malcolm, when you go to the grocery store and there's so many lines, there's so many people, and there's so few lines, they don't have enough workers, and then you get in this one lane, then the other one goes faster, so you jump lanes, and blah, blah, blah, just makes me irate. Derek Hagen: Don't you feel that too, Malcolm? And Gladwell said, bro, we live in different universes, man. I feel none of that. So silly example, this says, same adverse event, long lines at the grocery store lead to two completely different consequences. I rate anger and indifference, it's done like column even. That's because they have different beliefs about how grocery stores work. They didn't talk about that, of course, I'm vindering her. But what we do know is they have two different relationships with this adverse event, and that's because they have different beliefs. So the hardest part of this ABC model is to say, why did this long line at the grocery store? Why did this person try to get in front of me? Why did this thought of somebody else's successful podcast lead to me doing this or lead to me thinking this? That's the belief that you have. Derek Hagen: Sometimes you might have to ask, you know, I'm gonna sound contradictory, but ask why five times. Okay, so long lines at the grocery store led me to be really pissed off. Why? Because I had to wait. Okay, what about waiting made me a rate? Well, because I was running late. Well, what about being late made me furious? And so you can ask yourself, and when you get to the bottom of this chain, there's often not always, but often some kind of absolute language always never should, shouldn't, I shouldn't have to do this. They should do this. I don't deserve that. They deserve this. These are usually at the root of that. So then now you've understand, or you've understood what the belief is. And that's when you can really start to grow this space between stimulus and response. And you get to ask, is there any evidence for this? Derek Hagen: Is this true? Is there any evidence against this? And again, you're not trying to talk yourself. You're not trying to prove it's wrong. It might be correct. But even if it's correct, you've now taken this impulsive subconscious elephant decision, and you've brought it up into the rider, the realm of the conscious deliberate decision. So you're not trying to necessarily prove it wrong. You're just trying to say, is this, wow, that's interesting that that's what that belief is. Is there any evidence for this? Is there another way to think about this? And my favorite is to ask, if you had a loved one with this same situation happen, how would you counsel this loved one? Because the truth here is that we don't treat ourselves the same way we treat other people. And you might have known that like every religion that's ever been thought of has had some version of the golden rule, which is don't do to other people something that you don't want them to do to you. Derek Hagen: Well, this is the platinum rule higher than the golden rule, which is don't treat yourself the same way you wouldn't treat someone else. Because we're just awful on ourselves with this inner critic. And I often tell people, if you saw me talking to my nephew, the same way that I talked to myself, you would throw me in jail for real. Like if I filled a glass of wine on the table in my head, I'm like, oh, you're such an idiot. What's wrong with you? You're so stupid. If my nephew was over and spilled a glass of wine, and I said, hey, you're so stupid. What the hell's wrong with you? You're an idiot. That's not OK. But it's OK for me to do it to myself, apparently. So asking, how would I counsel somebody else? Or how, if this was somebody else, how would I counsel it? Derek Hagen: It's one way to kind of step out of the situation and see it from the sidelines instead of being directly in it. So that takes practice. And so negativity bias and other things aren't going to be unwired. You're not going to get rid of that hard wiring. But what does easier over time is that process that I just described takes a lot of work upfront. And it still takes work ongoing, too. But it becomes easier. It becomes easier to check in with yourself and try to make that mindful pause and choose a deliberate response rather than an automatic reaction. So much goodness there to dive into. I love the reframe of, how would you counsel a loved one? I think that is huge. And sort of, I don't want to call it a tip or a trick, but sort of an easy way for someone to keep in the back of their mind, a question to ask themselves. Josh St. Laurent: And as you were talking, I had my own little jarring. Derek Kagan inspired jarring of stimulus response with an arrow in the middle and the arrow is mindfulness. And I love that. I mean, I'm a big believer in that. It seems and feels to me like a lifelong journey, right? As someone who's meditated for a while, it doesn't seem like something you ever master. So I'm curious to get your take on that. Is there a good starting place? Because I think a lot of people are intimidated by it. And don't know where to begin. Is there an easy exercise that you give to people to get started in mindfulness? As a way to sort of widen that gap between the stimulus and their response? Derek Hagen: Yeah. So step one is just to start trying meditating. And my experience might be helpful here. Somewhere along the lines, I got the sense that mindfulness meant stopping my thoughts and sitting there for five minutes, or 10 minutes, or 20 minutes with no thoughts and that these Buddhist monks sitting up on the mountains, they can sit there for 12 hours without having any thoughts. That's just not true. Basically, to train your attention, this is kind of what they said. So if you think of awareness as anything that you can be defining it with the term awareness, is what you can be aware of. Awareness is everything that you can notice. So you might even think this is consciousness itself. Awareness, it is everything. And then attention is like a little spotlight within that. Attention is where you're placing your attention. So if I am focused on camera, I'm focused here, I'm not paying attention to what's out over here. Now, the flashlight in day to day life, it goes all over the place. It focuses on this sound and the net sight and the net thought and the net thought and this thought and that sight and this sound, it's all over the place. Mindfulness meditation is about training the hand that holds the flashlight. Derek Hagen: It's about training that attention. And when you think about attention, there's something, if you're focused on something, there's a couple of ways that can get called away. One is there's demand on that attention. So something calls your attention away. This could be external. A big slam, I heard a big slam over here. That sound called my attention away. Rightfully so there's something that I need to be aware of. There's something that needs my attention. And it could be internal demands for my attention too. I have this thought and then it derailed my day because I had a thought and then I focused my attention on that thought and because of that, that led to another thought and so on and so on. So then there's also regulation of the attention. That's what my opponent's helps with. So when I first started meditating, I would sit for 10 minutes and at his core, you're picking what they call an anchor. Derek Hagen: I'll call it my breath. I could be anything though. Well, focus on my breath wherever I feel it most prominently. For me, it's the chest for some people as the nose or the nostril or abdune and focus on your breath. When you find yourself getting lost and thought which will happen, you will redirect back to the breath. I mean, that's literally the redirecting. And when I first started, I might have caught myself 10 times. Oh man, I had to redirect back to my breath 10 times. That's once a minute. As I got better, I stayed with hindsight. I didn't know I was getting better. Eventually I would catch myself four times a minute. So now there's like what, 40 times something that I'm getting redirecting back to my breath. And then pretty soon it's once every 10 seconds. I'm recognizing that my mind was lost. Derek Hagen: I was actually getting better, but it felt like I was getting worse because I knew I've caught myself being lost and thought more often. So I felt like I was thinking more often and I felt like I was bad at meditation because I couldn't keep my attention on my breath. The paradox is now is actually getting better because I caught myself more. It wasn't that I wasn't lost and thought. It was that I didn't notice that I was lost and thought. So if you can get past the paradox of it, it's gonna feel like you're not as good or you're getting worse because you're noticing more of it that's actually the game. You get lost and thought and you bring it back. You get lost and thought and you bring it back. You get lost and thought. And it looks like if you could see the video, it looks like a bicep curl. Derek Hagen: Lost and thought, bring it back. Lost and thought, bring it back. You're strengthening your attention by doing it. And so with permission to get lost and thought because that's exactly how the mind works. Recognizing that your lost and thought is the game, I would just try it. And you can try it by yourself for sitting with for two minutes, try it for two minutes or one minute, work up to five or 10. I'll just focus on your breath. Sit. It's not a breathing exercise. You don't have to control your breath, but just sit and focus on your breath wherever you notice it and see when see what it feels like. And then redirect every time you notice that you're lost and thought, which will happen, redirect back to your breath. And then there are apps that can help with that. I have no stake in any of these. Derek Hagen: I use one called waking up. Other ones that I've used are 10% happier. The mindfulness app. Heavy hitters in the space are column and headspace. Then there are many others. So whichever one works for you is great, but they're there to remind you. So if you're doing it by yourself, you have to remember that you've got to redirect back to your breath because this will be, I'm fairly certain. I would wager on this. If you haven't meditated before and you do what I just told you to do. Sit for three minutes and try to watch your breath. You will watch your breath for about four seconds and then you will think for two minutes and 50 seconds or whatever it is. With an app with a guided meditation, there's somebody there to remind you every so often to redirect back to your breath. So the game though is to just start to see how wild your mind is. Derek Hagen: And that's normal. So that's the game. Recognizing how crazy your mind is and then strengthening that attention muscle and recognizing when you're lost in thought and then focusing on whatever needs your attention at the moment. Sometimes you're going to write an email. Sometimes you're going to pick a font for a website. Sometimes you have to have a hard conversation and you can train yourself to be fully present. A present meeting, your attention is on what you want it to be on in that moment. It takes practice and it's hard work and sometimes it'll be uncomfortable, but it is definitely possible. Man, so many good points. I mean, I'm glad you mentioned the apps. I know for me when I was first starting out, it was like, I mean, I had to, you know, noise canceling headphones with a calm guided meditation right now. Like it was, I was the four second person that you talk about who sits there and thinks for two minutes and 50 seconds, right? Josh St. Laurent: And I think we all got to start somewhere. And now it's at a point where it's like, almost putting yourself in challenging environments to meditate, you know, like what is some of that extra stimulus if I'm sitting in a park and there's construction? Like can I still focus on my breathing? So I think it's interesting to see the progression over time. And I like the bicep curl analogy, like you're training your brain to, you know, increase that space between the stimulus and the response and really like control your thoughts and not the other way around. So I love that. Yeah. And I would even add not even control your thoughts, but just notice and recognize. And when you get to crazy levels of mindfulness, she can go to the construction zone and you can still pay attention to your breath in these challenging scenarios. But there's, you could also expand with time once you begin, once you turn into maybe not so much a beginner anymore and you may be in the intermediate stages, you can redirect your attention to whatever calls your attention. Derek Hagen: So maybe I'm focusing on my breath and my breath is my anchor. And then I've got to pain in my neck because I slept on it fine. Okay, well, that called my attention. So why don't I place all my attention on what that feels like? What does the pain in that it feel like? That seems like a simplistic question. Well, what actually does it feel like? If you just popped into existence right now, how would you know, how would you articulate that you have a pain in the neck? What hurts? What does it mean to hurt? It's a tingling, is it a pressure, is it a temperature? What is it? And then when that's no longer prominent, I can return to my breath. And then maybe I hear some construction. You can use sound as anchors too. So I can focus on what does that sound like until that's no longer prominent then I can return to my breath or then I hear this bird chirping and then I can listen to that. Derek Hagen: It's deliberate attention. Whatever that anchor happens to be, so the anchor in this case can move around. You're just focusing on the construction sound. And then when I thought breaks my attention, I bring it back to the construction sound. That sounds funny because many people have a notion that meditation should be about calming yourself, which is sometimes not always, sometimes a side benefit, but that's not the reason to do it. So if you're out there and you're listening to your car, I think, and how can I calm myself in a construction zone? Probably can. The idea is to train your attention not to necessarily calm down. Again, being more calm, being less stressed, these are some side benefits. Sometimes slipping better, those can be some side benefits, but not all the time. Sometimes being more mindful in the short run, causes you to have worse sleep or sometimes it can cause you a little bit more stress. Derek Hagen: That's okay, because the game isn't to de-stress or to get better sleep, and it's to literally, it's to train that attention. And once it quite literally becomes a magic trick, once you can slow down and say, what am I thinking in this moment or what is calling my attention right now or just the ability to have focused concentration when you need it, it solves a lot of what we call problems, things that we don't even notice anymore when we recognize that they don't matter and grant scheme of things. I'm glad we went here. I wasn't expecting us to today, but I love the reframe and the focused attention and all the different benefits it can come from mindfulness. I think a lot of people think of it as, like they need to be Eckhart Toley, you know, or nothing. There is no in-between song god that we talked about it. Josh St. Laurent: I wanna pivot a little bit to the three questions that ask everyone towards the end, a little more personal to you, but the first question is, what is living a wealthy life look like for you? Freedom. So what I wanna do, and I borrowing this camera where I heard it, but in the diet books, I remember a guy saying, the way that I diet is to eat whatever I want, whenever I want, however much I want. So the trick isn't changing how much I eat or anything like that. The trick is to change the one I want part. So if I can teach myself to not want potato chips and to not want M&Ms or whatever, I can teach myself to want grapes and to want carrot sticks, then I can eat whatever I want, whatever I want. So he's taking the willpower out of it by changing what he wants to do. Derek Hagen: So similarly, I wanna do whatever I want, whenever I want, with whomever I want. And again, much like that diet version, changing what I want can help with that. So to be able to take time off and travel, so travel is kind of a big thing for me, and it's not even necessarily going to another state or another country. Sometimes it's just tooling around the same old city that I live in or city that I grew up in. But being able to explore is quite important to me. It reminds me of the old Calvin and Hobbes comic strips where the guys just going out and checking things out. So if I look that back to one of the corneas, I suppose it's autonomy. Having autonomy to do the things that are important to me, which is nature outdoors exploring and stuff like that. So a wealthy life is having autonomy. Josh St. Laurent: Such a good reframe. If you could give one message to someone working to gain financial freedom, who isn't there yet, what would it be? Stop comparing yourself to the Joneses. Figure out what you want to compare yourself to that. Because especially in the age of social media, people are not comparing themselves to the Joneses anymore, which used to be your actual neighbors and friends. Now we're comparing ourselves to anybody that we want to follow on social media. But it's even worse than that because we're comparing ourselves to a curated version of the highlight reels of other people's lives. And there's never going to be enough. So define what enough means, know what you want, why you want it, and then pursue that unapologetically without caring how that fits to other people. Absolutely. So somewhat related to that, if you only had $1,000 and you were starting over, what would be the first thing you would do with that money? Derek Hagen: Can you define starting over? Sure. And we've had guests take it different ways. When I answered this question, I thought of it as, I have all the knowledge that I have now and fresh out of college early 20s, starting over with $1,000. Gotcha. So starting over my career, basically, with $1,000, I would pursue, I mean, it's very, again, it's related to that second question you asked, but it would be fine to work, I mean, I'm going to bring all the questions together, fine to work that allows for maximum autonomy, it doesn't necessarily pay the most because if I could get, if I keep this knowledge, I've got a $1,000 in my pocket, I know that being the guy with the big house at the end of the cul-de-sac with the European sports cars isn't going to contribute much to my happiness. So I would focus in on, and we didn't talk about this. Derek Hagen: I'm going to slip this in here at the end. If I'm keeping the knowledge that I have, some of this knowledge that I have is from an author named Ronnie Weir, she wrote a book called The Top Five Regrets of the Dine, and just really quick for the people who haven't heard of those. Number one, I didn't live a life that was true to myself. I did what I thought was expected of me. Two, I worked too hard and two, much, three, I didn't express myself, four, I lost touch with my friends and family, five, I didn't allow myself to be happier. So if I was starting over from scratch with $1,000, I would design my life in a way to minimize those potential five regrets. So, and that's high level to live a life that's true to myself, or regret number one, I need to know who I am. Derek Hagen: So there would be some self exploration around who am I, what am I, want. Of course I know that now. So maybe I wouldn't have to spend the time doing that if I was starting over. Finding work that doesn't feel like work, because it's hard to work too much. If it doesn't feel like work, finding people in my life that allow me to express myself and choosing a life of happiness instead of contingent happiness where I'll only be happy as soon as X, Y, Z happens. So yeah, designing my life intentionally around regret minimization. So for someone listening who wants to connect with you, we're going to drop all the links in the show notes, but where is your preferred place for someone to connect with you online? You can go to Twitter, LinkedIn, I kind of post the same stuff everywhere. So whatever works for you, I'm probably there. Josh St. Laurent: And I put a lot of these drawings out there. So if you like bad drawings of bad stick figures, you can find those out on social platforms. Cool. And you just touched upon it a second ago, bringing up the book, the top five regrets of the dying, but is there anything else that we didn't get to that you want to make sure to cover that people should know? I don't think so. I think just in general, just focus on what's meaningful to you. So have sources of meaning. If things that provide meaning to you that fill up your meeting buckets, and that is meaningful life consists of kind of three legs, having something meaningful to do with your time. Some people call that purpose. So find something that's worth doing. Live an alignment with your values, understand what those values are. And that helps this sense of significance, making life feel worth living, social relationships, cultivate those social relationships, and continually ask yourself how I might be wrong. Derek Hagen: So work on your sense of coherence. This world makes sense. And asking myself, at least, how might I be wrong? Helps strengthen the narratives that I've been around how the world works. And when something happens that's different from your worldview, that's confusing. Sometimes cognitive dissonance, although you wouldn't know people who have cognitive dissonance don't know that they're experiencing cognitive dissonance. But it is this uncomfortable feeling of two things are happening at the same time that I didn't think were possible or their opposites. And I have to somehow make sense of that. So if I can expand this sense of coherence if I can expand my worldview to try to take into account other forms of knowledge, things that I might not be thinking. Again, I'm susceptible to all the other biases that other people have. So I'm telling you that I challenge my thoughts, when I'm challenging them all the time, probably not. Derek Hagen: But it is something that I'm working towards. And so that's why I would say, keep challenging your ideas. How might you be wrong? Find out what your values are and cultivate those and have something good to do with your time. Josh St. Laurent: Really good advice. Perfect place to wrap. I appreciate you being here. This has been really fun. I learned a lot. I hope the listeners did too. So thank you. Josh St. Laurent: Thank you for joining. Derek Hagen: Yeah, absolutely. Thanks for having me. Josh St. Laurent: Definitely. Josh St. Laurent: This has been the Wealth in Yourself podcast where we help people to design their ideal life and take control of their time and money. Our guest today was Derek Kagan. Thanks for listening and we'll see you next week. The Wealth in Yourself podcast is hosted by me, Josh St. Loren, an edited and produced by Ray Haycraft. To learn more about how to make your money work for you, visit us at www.WealthInYourself.com and connect with us on all social media at Wealth in Yourself. Josh St. Laurent: This podcast is educational in nature and is not meant to be investment advice. Please do not construe anything said to be advice. And the opinions of the guests may or may not represent the opinions of Wealth in yourself. This podcast and the information presented are separate from my employment at Golden Gate University. Still, they are part of my mission to make no cost financial knowledge more accessible. If you like the show, please take a moment to leave us a review. We read all of your feedback and we want to make sure we cover the topics that matter most. If you have a specific subject, you'd like us to explore or a guest you'd love to hear interviewed. Don't hesitate to shoot us a direct message. And as always, thanks for listening.