Mindy: Welcome to the BiggerPockets Money podcast, where we interview Farnoosh Torabi and talk about a healthy state of panic and what that means for your relationship with money. Hello, hello, hello. My name is Mindy Jensen and with me as always is my never panicked, always sure co-host, Scott Trench.
Scott: Great to be here with my cool, calm, and collected co-host Mindy Jensen, except for when she’s discussing cryptocurrency.
Mindy: Nobody has ever called me cool, Scott. Thanks. My children would disagree. Scott and I are here to make financial independence less scary. Less just for somebody else. To introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting.
Scott: That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business, or confront the fears you have around personal finance. We’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.
Mindy: Scott, I am so excited to talk to Farnoosh Torabi today because she is one of the most prominent financial people in our space. I always love talking to Farnoosh. She’s got a podcast. She’s written, I don’t know, a bajillion books, and she’s just such a intelligent, well-spoken source of information. I love hearing from her every time we chat.
Scott: Yeah, she’s a she’s a master at this and she’s really kind of got a new great angle that I think is is she’s really on to something here with how fear informs personal finance decisions. Um, we’re going to talk today about how, you know, personal finance is 80% behavior and 20% math, right? And we spend a lot of time on math on this show, but perhaps not enough time on the emotions around money that really drive decision making in this space.
Mindy: Yeah, this is a great episode today. Before we get to it though, Scott, do you know we have a new segment at the money show called the Money Moment, where we share a money hack, tip or trick to help you on your financial journey. And today’s money moment is about tax time. And I know it isn’t tax time right now. However, if tax day is a stressful time for you and you tend to owe money on April 15th, make a tax account. Automate a portion of your income into that account so you’re prepared for the expense come April. Remember, your tax payment is due on April 15th regardless of if you get an extension or not. So, why freak out about it? Start saving now if this is something that always comes up.
Scott: Love it. I have a personal checking, a personal savings, and a tax, uh, estimation account, right? And I pay quarterly taxes. So if you’re if you owe an April 15th, you should also talk to your CPA about whether you owe quarterly taxes or should consider starting to pay those. And then yeah, you just set it inside aside in that account every time. Uh, right now they’re earning four to 5% interest. It’s great. It’s a savings account and um, yeah, it takes away all that uncertainty. If you overestimate, you can always just put it right back into your checking account when it’s uh, tax uh, uh, when you get your tax return or um, you file you finalize your return at the end of the year.
Mindy: Do you have a money tip for us? Email moneymoment@biggerpockets.com. Farnoosh Torabi is one of America’s leading personal finance experts. She is the host of the award-winning podcast So Money and has earned over 30 million downloads. She is also a sought-after speaker and author. She has a new book out titled A healthy state of Panic. Farnoosh, welcome to the Bigger Pockets of Money podcast. I’m so excited to talk to you today.
Guest: I’m so excited. Thank you both, Mindy, Scott, and I’m such a fan. I feel like you two are the OGs of of personal finance and personal finance podcasts. So it’s really an honor to be here to share the book with you and your audience.
Mindy: Well, thank you for joining us. For the two people on the planet who haven’t listened to your podcast or read one of your books, can you tell us a little bit about yourself and how you became interested in the financial space?
Guest: Yes, happy to. I’ve been working in personal finance for over 20 years, believe it or not. I started as my I think I was like 19 my first internship at Money Magazine, uh fact checking articles about 401Ks and reverse mortgages and all the glorious dreamy stuff you think about when you’re like 19, like all the things you want to do. Uh, but I and so it’s kind of been the rest is history, you know, since that opportunity, I recognize that I had a real curiosity about money and personal finance and more importantly helping people. I’ve always been that kid who if you asked me when I was like eight years old, what do you want to do? It’s like, I want to be a a doctor or a waitress or you know, and the through line was always like I wanted to be in service. I wanted to be helping people. Uh not smart enough to be a doctor, but I did discover a passion for money and then from there it just kind of evolved into a multi-platform business where I was not just writing about money but suddenly also giving keynotes and going on television and hosting shows and then of course the podcast came years later. But if we go even further back in time, I think the origins of my personal finance career were in childhood when I was the daughter of Iranian immigrants who came here to pursue like a lot of immigrants that American dream and as middle Easterners, I think money culturally was not taboo in our family where I think for a lot of my neighbors and friends and even to this day, money is very much a topic that we do not like to talk about. But we talked about it, the good and the bad. and I think I had an early lesson in how to be fluent in in in money and how to talk about it without feeling bad. And I have to give credit to that experience. I think that was instrumental in in getting me to where I am today.
Scott: You your new book is titled a Healthy State of Panic. Can you tell us why you chose that title and a little bit about the book and Yeah. what what we’re trying to do with the the whole, you know, fear can make us more productive concept here.
Guest: You know, I’ve written, this is my fourth book. Uh I’ve written many personal finance books. My last one was about how to be a female bread winner and a hetero marriage, how before that it was about money mindset and before that it was just the basics of navigating your personal finances as a young adult, something that I was dealing with as at the time of writing that book. This time I wanted to write a book that was more deeply personal, that looked at the emotional underpinning of so many of our financial questions which I’ve discovered is fear. Whatever someone is asking me about whether or not to buy a home or rent, invest or not, afford X Y or Z, leave the job, start the business, ask for more. There’s always a hint of fear and I wanted to sort of explore that and the book is not just a money book, the book looks at all sorts of high stakes decisions that we make not just in our financial lives, but also in our careers, in our friendships, in our relationships. But fear is really the overarching theme of the book and it started with my my career in finance because as I said, money is something that often when we are confused by it or not sure about a a decision related to money that there is a a sort of a level of fear there. And so as I say I’ve been working in personal finance but I’ve also been working professionally with fear for the past 20 25 years. I also wanted to write a book that was deeply personal. I’ve asked so many guests on my podcast about their personal lives and had them connect the dots for us on the show as far as, you know, the lessons or the impacts, the influences of their upbringing in their current life today, in their financial lives, in their professional lives and I thought, I think I’d like to open up a little bit more about myself and how I got to be who I am, which is also someone who is terrified. I’m afraid. I’ve always been. I’ve never neglected my fears. I’ve never discounted them. I’ve never thought that I was weak for being afraid. At least not in my adult life. Maybe as a kid I was ridiculed for it. I was called Tarsu, which is Farsi for fearful one. I was the poster kid for fear, but fast forward I’ve I recognize even in my own life that fear has been a real tool for me. And so in writing this book, I wanted to share those stories, but not just mine, but so many people who have maybe even unknowingly shared that with me on the podcast that the reason they were able to start the business or leave the job or invest in real estate, is because they listened to their fears as opposed to again, looked at fear as a weakness and in our culture, uh we we tend to associate fearlessness with courage and bravery and I want us to imagine a world where we can be fearful and fulfilled. We can be scared and smart. I think that those two things can coexist and we all have fear. We fear is abundant. It’s it’s a natural resource that’s running through our veins. So let’s learn how to leverage it and have a healthier relationship with it and that’s really where the book begins is is talking about how to use fear as something that can help you in your life, in your financial life, in your career and elsewhere as opposed to when fear shows up to assume that you are incapable, that it is going to get in the way and that it will dead end you.
Scott: Could we dive in there a little bit and kind of go one level deeper on this concept of healthy fear? What is what in your opinion is an example? Like because I I can, you know, at many cases in my life, I’ve been afraid of something. I haven’t dealt with it. It builds and builds and builds and builds and eventually I have to confront it and it is a huge, you know, it becomes a bigger problem than there. That seems like an unhealthy way to deal with fear uh for example. What what are some unhealthy ways to deal with fear before we kind of get into the healthy state of panic concept that you’re you’re bringing up there.
Guest: I think that, you know, and hearing even you talk about it Scott and just describing a fear is unhealthy. I I listen to that and I go, well, that’s Scott ignoring the fear or wanting to not face it and that is actually the the the framework that I’m trying to get people to to embrace is that when fear shows up, it’s just fear, it’s just a stimulant. How we engage with it, how we choose to have a relationship with it is what then determines if this is going to be something that’s going to help us or that is going to really get in the way because what I’ve recognized is that in my life when I’ve tried to ignore fear or brush it off, it doesn’t go away. It sometimes only compounds and that’s when you get to a point of maybe having an incredibly anxiety and and that’s not healthy and we don’t want that. But I find that when we are more patient with our fears and in the book I walk us through nine different fears, the ones that I feel like are the jugge knots in our lives that everybody has encountered and maybe even still feels on some days, whether that’s the fear of loneliness, the fear of rejection, the fear of failure. there’s obviously the fear of money at the centerpiece of the book. And then we get into things like the fear of uncertainty, which who hasn’t experienced that as well as endings and the fear of losing your freedom. And I I picked those fears specifically because I do think that those fears not only run rampant, but I think they have the ability to help us if we use a very simple framework of being patient with those fears, asking the fears questions when we turn and face our fears, what we’re really doing is we’re turning and facing ourselves. When fear shows up, it has important messages to impart. Uh it it wants us to identify what’s important to us, what we’re trying to protect and even if we decide, look, I’m not going to do the thing. I this I’ve done the risk calculus and I still don’t want to do the thing, that’s fine, but I feel like just giving yourself the opportunity to understand what that fear is pointing out about you in your life, in your relationships perhaps, in your experiences that have led up to this point, that is um, I feel like it’s it’s an experience that we can’t afford not to go through in life. and so often in our culture, we are told the opposite and I finally want to just give fear a rebrand because we owe it to ourselves. When fear shows up, it’s an opportunity to learn more about yourself and that in and of itself is for me a great takeaway.
Scott: You mentioned earlier that um, uh you weren’t a doctor, but I’m going to ask you uh uh a question along those veins right now. I’ve found that in my in the past, one of the hard parts for me has been diagnosing the fear, like what is it? Like what am I afraid of? And just when I state something to the effect of I am afraid that of this outcome transpiring uh from these things, all of a sudden it just makes it much more practical approach. What what how do you diagnose a fear?
Guest: Well, I feel as though fear and and like I said, I have nine different shades of it in the book. Uh they’re are distinctions. So when, for example, you’re fearing uncertainty, it’s because you’re fearing losing control over a situation. You’re fearing not being able to manage an outcome the way that you want or the way that you hope. Uh I felt that way when I got laid off in 2009. I still feel that way some days. I’m a parent. How can I not? I have a lot of fear of uncertainty. There’s the fear of failure which shows up often as a fear of not measuring up to your definition of success, whatever that is, uh or fearing failure, which is also the fear of kind of disappointing yourselves, others, their expectations people have of you. I think that what we often don’t do in our culture is identify these distinct flavors of fear. I think that when we can get really specific and name the fear, then we can kind of know what to do with it. As I say sometimes, when we are experiencing fear of failure, the wisdom in that fear is different than the wisdom in say the fear of money or the fear of uncertainty or the fear of loneliness. The wisdom in the fear of failure is that it’s trying to nudge you towards maybe rewriting your definition of success because you’re setting yourself up for failure and you don’t even know it. Or maybe the fear of failure is showing up because you’re sensing that, hey, I’m not in an environment that will actually support me. and then that will give you a sense of where to move next and maybe it’s to move out and on. And look, fear is an opportunity, as I say, to learn what your next step should be, but the first thing you want to do is figure out what is what is the actual fear that I’m feeling? And the book walks us through some of those. Uh, those experiences that I’ve had, that others have had. It’s sometimes a good shortcut to figuring out what that fear is is to extrapolate and envision what it is that you’re seeing, like what is the future that you’re seeing that you’re afraid of? The feeling that you’re left with, that is the, that is the fear. Um, sometimes we’re not fearing the right things though. and what I mean by that is, Sometimes the abstract like I’m sure you like, you’ve I’ve experienced it or you’ve seen others experience the fear of things like recessions and a stock market crash or a bank failure, as we saw earlier this year. And those are not invalid fears. I mean, they’ve happened, so we have some history to, you know, to point to. But I think that the better fear is to imagine take those abstract financial fears and really make them more granular and personal to ourselves and our families and our households. So if you’re fearing a recession, I get it, but what is it exactly about the recession, a a potential recession that really scares you? And for a lot of us, it’s losing our jobs. So then the next step is, take the fear to the edge. Like, imagine you actually lose your job not just someday, but if it happens tomorrow, what would be the first one, two, three things you would do? And maybe now you can get a head start on that. so that in the event that that happens, you’re not approaching it with without with without any sense of what to do and you can approach that with a little bit more calm. So, especially in our financial lives, I feel like when fear shows up, it’s really asking us to go to the dark place which I say may sound like I’m, you know, really a masochist, but I’m just just saying you got to live the fear, you got to take it to the edge, you got to um, you in and why that is is so that you can be catalyzed to do something about it. Because if you’re just worried about these hypotheticals, um, well, you’re just going to spiral. You’re just going to keep chasing your tail.
Mindy: I really like this. What is what is that phrase of failing to prepare is preparing to fail. So right now, while you still have your job, but you have this fear of a recession, work through it. I love that advice. What is the worst that happens? I lose my job tomorrow and then I don’t have any money. Well, okay, but I have an emergency fund or I don’t have an emergency fund. So when tomorrow comes and I don’t lose my job, I should start making plans to have an emergency fund so that if I lose my job, it’s not the catastrophic thing. Okay, so I lose my job but I have an emergency fund. What else? Ooh, maybe it’ll take me a while to get a new job. Okay, so start brushing up on your skills now. Start preparing your resume now. Like, uh my dad and mom were both uh in hiring for a long time and they were always harping on me, the best time to look for a job is when you have a job, you know, if you feel like your job is really unstable, start looking for something else. But also, you know, explore your fear. Why do you fear a recession? Because it’s blasted all over the news. Well, they keep saying it. I saw something yesterday. Uh he who shall remain nameless has predicted 23 of the last two recessions successfully. Um and there are people who continually predict something bad is going to happen and you know what, they make news because Faroush says everything’s okay, isn’t an exciting headline. So that’s not what gets clicked on. That’s not what sells newspapers.
Guest: Exactly. I I it’s how I open the book. I said, you know, we we have so much fear in our culture. If we were all living by Malcolm Gladwell’s 10,000 hour rule, which, you know, we know is like, if you do if you accomplish anything 10,000 hours, you’re an expert, like we are fear experts because we’ve experienced fear no fewer than 10,000 hours in our lives because of the media, because it it’s fear is profitable. to your point, fear drives headlines, it drives consumers to make impulse purchases when it comes to the fear of money, I often say that the first step should be to identify the source of that fear and ask your fear, who brought you here? Where did you come from? Because sometimes your job is an as an adult with agency is to get to the bottom of that fear and maybe you’ll discover that it is not actually a fear but it is a fallacy. And I’m not here to say that all fear deserves celebrating or that all fears can help us. I’m just saying, let’s hang out with this fear because along that journey of figuring out where this fear came from, guess what? You are going to realize so much about yourself and who you’re surrounding yourself with and all the narratives that you may have been telling yourself that you’re now realizing haven’t been serving you. and that’s where fear is helpful. It’s not that is giving you maybe even a next step, but it’s giving you a lot of context and information which is also very helpful in life.
Scott: So we we we’ve kind of uh trickled through to kind of three actions here, right? Uh uh diagnosing the fear and labeling it, right? making sure that you kind of understand it. Um, uh understanding that fear can be healthy in a lot of situations and can and and can be a signal that we should tune into. And then um this kind of this kind of of of third concept of of how how did you put it? Like kind of going into that next level deep. Where is it coming from, right? What’s next? How do I continue to harness this fear and put it to productive actionable use in my journey with money, for example.
Guest: Well, I think it’s just recognizing which you can do every day. I mean, fear is abundant as I said, it shows up all the time and for you to just have an appreciation of it as opposed to uh a a a hatred for it, uh that’s really the work is that’s the first step. That’s something that we can all start doing and can do conditionally to invite fear into your life in a way that you never have, which is to say, look, it’s here. I’m not a bad person, I’m not a weak person for experiencing it. Fear is just as important as it is to feel gratitude and happiness. I know that may sound startling to some people, but look, you can also have an over amount of, you can you can be you can drown yourself in happiness sometimes, just like like fear can be unhelpfu. I think that both can live in your life in balance and when fear shows up in your financial life, your job is to acknowledge that maybe it has something to teach you about who you are and what you want to protect and what your goals are. There are many stories in that chapter about how people have used fear to save aggressively, invest, to pick up their lives, pick up the pieces in their lives after literally being robbed of every penny, in specifically, I’m talking about one person who was um, who was robbed by Bernie Maoff and was left with just the house that she lives in and nothing else. Her entire life savings and her husband’s life savings disappeared.
Scott: For those who have been uh living under uh a finance rock, uh Bernie Madoff is a uh a was convicted of of the largest, one of the largest Ponzi schemes in history. I think the largest Ponzi scheme in history and stole billions of millions of dollars from investors who who trusted him.
Guest: And she found that her fear of money, her fear of essentially going broke again and never being able to uh carry on, led her to realize that she did actually have a lot left, which wasn’t money, of course, but there were resources that she had such as her education, her skill, she was a writer, her network, she had a house, so there’s that. and it led her to realize like all the things that she was grateful for in her life that she then leveraged too, to move on and up. So she used her skills as a writer to tell her story which then turned into a book, which then brought in money. So even at the depths of our financial fears and despair, there is opportunity. Um, it’s a matter of figuring out what is it that this fear wants me to protect? And in that moment, I think her fear of money wanted her to protect her livelihood, her financial livelihood, but also her sanity. You know, because sometimes when we are just so buried deep in our concerns about money, it’s it’s really hard to feel like you can get up and out. And in order for her to do that, she had to realize that the definition of money is not just money in the bank. It’s not just dollars and cents. that wealth, that that riches, that fortune is in your relationships, it’s in your life experiences, it’s in your spirit of can doness. And listen, she grieved, she allowed herself a lot of time to to sort of go through those important motions of being angry and sad and despondent and unhappy, but uh ultimately she realized that uh there were important things that Bernie Maoff had not taken from her and that is what helped her kind of move through that fear and and on to the other side. The goal is not to always be afraid. The goal is not to attract fear, but it’s rather to appreciate it when it shows up that maybe there is some wisdom here to take you to the next page in your life.
Scott: And this is a great story about how to confront fear and use it to kind of overcome loss. I’d love to ask you, on the other side of that, how do I use fear healthily to prevent loss in the first place? Um, what’s what’s an approach that I can use to um, to that effect?
Guest: Well, loss can mean different things. I mean, I know a lot of people who are afraid of investing for the risks of loss there. There are people that are just afraid of maybe mismanaging their money for the fear of loss there. and I think that it really comes down to a few things, uh, asking yourself this first, like what am I more afraid of the loss or there is a fear that you may not be considering, which is that, for example, let’s take investing. Let’s get it real, let’s get really, you know, sort of tactile here. like if you’re afraid of investing because it may mean losing money at some point, maybe even for streaks, days, months, years, depending on, you know, the direction of the economy and the market. We know that historically the market outperforms money in a savings account over decades uh that in S&P 500 invested diversified invested for 25 years, you’re going to end up historically with more money than you would in, you know, let’s say uh just a savings account. So if we believe this and we believe that this will repeat, then not investing today while may, while that may feel like it’s allaying your fears, that may feel like you’re addressing your fears and you’re doing the safe thing. There is something scarier awaiting you potentially in 20 years and 25 years when you arrive at a point in your helpful retirement and you actually don’t have the money to retire. That’s a much scarier thing. And so sometimes the exercise when people have a fear of something today, a loss today with their money and then as a result thinking that the answer is to not take the action, to not invest, to not pay down my debt, to not have the conversation about money with my partner because that’s going to lead to a fight and then I know what what happens next. I think that the thing we often should remember is the scarier thing potentially waiting for us at the other side of that of that response today, that knee jerk response today which we typically have with fear, which we’re typically very, you know, quick to react. And I think that that is where we get catalyzed to go back and do the right thing.
Scott: Yeah, it’s a there’s there should be a fear, sure you should be afraid of investing, right? You you you can lose money, right? The mark can go down, someone can rip you off. Um, you know, you and you should harness that fear to be educated about exactly what you’re investing in and the prospects to manage and minimize risk around that and maximize long-term performance. But you should also, to your point, be afraid of two things, one, running, not not investing and the consequences of that in later life and not realizing your potential in the nearer term, right? Um, with with the so I think that all of that all of those fears can help work together to a productive outcome in combination potentially.
Scott: you use the E- word, education.
Mindy: I think education is a really great uh antidote to fear. If you don’t know something, that makes it very scary. I don’t know anything about investing. So therefore it’s scary to me. and uh Farno you just said we know the market outperforms money in savings account historically. So if we believe this, well, yeah, I believe this because I’ve seen it. Uh past performance is not indicative of future gains. However, I have seen the past performance and the market goes up. if you look at like if you zoom way out, the market always goes up. When you zoom in, you can find lots of evidence of it going down. Um, but there are people who don’t believe this and the reason they don’t believe it is because they haven’t looked at it. They haven’t done any sort of studying. They heard from their uncle who invested in Enron that one time right before it went to zero or they invested in that one stock that one time and didn’t do any sort of research and then it went to nothing or they lost their life savings and they’re like, oh, the stock market’s not for me. And you know, educate yourself. There are lots of, I don’t want to say easy ways to make money in the stock market, but there are a lot of consistent ways to make money in the stock market that doesn’t require education, but also a little bit of education can go a really long way towards fattening your wallet.
Guest: I agree and could it just be that when the fear of something like investing or anything that you may not be familiar with pops up, maybe the the next best healthy move is to get educated and that is where the fear is trying to direct you.
Mindy: Yeah, there’s also a lot of safety in not educating yourself because then you stay in your little comfort bubble and you don’t have to do anything scary, like invest in the stock market and maybe watch your stock portfolio go down a little bit before it goes back up again.
Guest: I think that’s the expression ignorance is bliss.
Mindy: Ignorance is not bliss. Ignorance will make you uh very unhappy in the long run.
Scott: I think it’s just such a a great concept here that we’ve been discussing here and you know, I I’ve I’ve been something’s been I I I think it really pertains to our world in bigger pockets where I think that a lot of real estate investors, perhaps most come into it with a healthy amount of fear, but there is a cohort out there that’s lacking that healthy amount of fear and that creates huge risks. So this again, fear to to the whole point of what we’re talking about here is it’s healthy in a certain degree as it should be telling you something you should listen to it and you should, you know, confront or act on it or educate yourself to mitigate or manage it.
Guest: And I think that you can be fearless and that is something that we should all aspire to, but to be honest, the journey to getting there involves reconciling with your fears, unpacking them. Anyone who says that they just went from zero to fearlessness is not being honest with themselves. And I think it’s because we’ve been fed this this really tragic narrative around fear, like we do believe that if we admit to having fear that we are admitting weakness, that we are the opposite of courageous. And, you know, just go on look for any book title with the word fear in it and it’s the promises are, you know, fearlessness is gonna solve all your life’s problems. But I think that, uh, for me, I’ve never been able to be be completely fearless in my life. I mean, if if I have done things that seem fearless to people, it’s actually because I have a very good relationship with fear actually. I’ve been able to lock arms with it and go do the thing anyway. Um, and I think that being fearless, truly all the time is is a promised land most of us won’t ever reach and that’s okay because I feel like when you are able to reconcile with your fears and face your fears, there’s an emotional intelligence there that I most respect for. And it is a real privilege to be able to walk through this this lifetime without fearing any risks. Right? I mean, who can do that? I can name a few guys. But other otherwise, we’re all just fending for ourselves here. And I’m the daughter of immigrants. I know this very well, fear and I go way back. I watched my parents grople with it and experience it. Uh, I myself, uh I talk about, you know, the humor in that growing up when you’re told you can’t do anything that to live a safe life, just live live at home. like don’t go anywhere, don’t go on the sleepover, don’t have a boyfriend, don’t, uh you know, seriously like it was just like stay home, get a college degree and then get married and then you can date when you’re married, you know, like it was just very sensible advice as a parent. But it was um ultimately it was a path that worked out and that was where I kind of started the book which was like my mother and father didn’t let me do anything. They really like raised me with through this, uh prism of fear. And while uh I hated it growing up, it it gave me, again, a real intimate, close-up relationship with fear as a kid that as an adult, um, just I had to I had to be be friend it because it wasn’t going to go away. It was like a lost puppy. It just kept following me everywhere. And everything worked out I suppose and that’s at least according to my mom and and I think and you can too.
Mindy: I think that’s great advice, befriend the fear and embrace the fear and use it to your advantage.
Guest: Keep your enemies closer. I don’t know.
Mindy: Yes. Well, it’s going to be there. There are going to be things in life that scare you. Like you said, you can’t think of anybody, maybe one or two people that have like no fear at all, otherwise, it’s a healthy part of life. Uh, let’s switch gears and talk about gratitude. In your chapter about money, you speak about gratitude. How does gratitude play a role in your perspective on money?
Guest: Well, it’s important to realize that, you know, money is just a tool and if you have a fear of money, then maybe it’s really your relationship with money that is sourcing a lot of this fear. And sometimes the relationship with money is such that um, we we just give it too much power in our lives. We give dollars and bills and bank account balances, way too much power in our lives. We think that it’s what it means that to be rich, it means to be actually physically, you know, rich, dollars and cents wise, and that you know, we’ve heard self-worth equals net worth and I think that that is a narrative that I really encourage people as they read the book to to sit with if they feel this, to really kind of think about how can I rewrite this to to have it be more empowering. And the more you think about self-worth equal net worth, the further away you get to the ability to really practice gratitude and feel grateful in your life because, if all you’re hoping for is, you know, a certain level of money in your net worth calculator to feel like you’ve quote unquote made it or feel like you’ve quote unquote uh become successful and that you’re worthy of things and you’re worthy of of joy and experiences in life, then I I worry for you and I think it’s important to disassociate those things. It’s important that when we fear money, we and and that’s a very sort of abstract thing sometimes even to say that you fear money, like what is it actually that you’re afraid of within the world of finance, you know, and we’ve gone through some many, many examples, but like my my friend who lost everything via Bernie Madoff, for her, she she her fear of never being able to sort of get back on her feet, literally financially. Can you imagine in your 60s losing everything. Um, it it led her to realize that all the things that she was grateful for in her life, that she then leveraged too to move on and up. So sometimes when we are are fearing money or fearing a lack of money, we are just focusing too much on what we don’t have. And what maybe we should refrain and and pivot to is is what we still have, what we do have which isn’t maybe money in the bank, but is very rich and resourceful. Again, your health, your relationships, your life experiences that can inform you and and guide you into your next chapter in life, your intuition. Uh, and I do think even for me, you know, I I’m a I’m a person who’s very much like a roll up my sleeves, will just do it and I don’t, I’m you know, I don’t care that um, I have a master’s in whatever, like, I no job is beneath me. I will do whatever it takes to do whatever it takes. And that I think that in the end will help me in life and I’m very grateful for that.
Scott: Love it. Well, thank you so much for sharing all of this, this wisdom. I think it’s a great topic. um that really doesn’t get enough attention here. I think it’s, you know, money, personal finance is 80% behavior and 20% math and fear is such a major driver of that behavior. And I don’t think we’ve ever attacked the issue head on and really thought about um, you know, how let let’s diagnose it. Let’s figure out where it’s coming from and then let’s set up a practical approach to to addressing it. and I love the component of gratitude. Um I think that that exercise on its own does a lot to quell fear and control it and maintain and and and and and, you know, contextualize it to help it make make it even more actionable. So thank you so much for for sharing all of these thoughts. I think it’s a really powerful lesson and I hope um folks take it to heart.
Guest: Thank you so much for this opportunity.
Scott: Absolutely. Where can people find out more about you and where can they get a healthy state of panic?
Guest: You can learn more about the book and where to get it at a ahealthystateofpanic.com. And you can catch me on So Money, the podcast three days a week, wherever you like to list the podcasts, and you can hang out with me on Instagram, which is where I’ve identified as my my social uh my favorite of all the social platforms. I’ve tried Tik Tok, it’s not working. Please send your condolences. I love hanging out on on Instagram at Fars to Rabbi and I respond to DMs there, so would love to hear from you.
Mindy: Awesome. Thank you so much, Farnoosh. It’s always lovely to talk to you.
Guest: Thank you.
Mindy: All right, Scott, that was Farnoosh. That was a new topic for us. The fears around life in general and specifically about money. I’m going to put you on the spot, Scott. Do you have a money fear?
Scott: Yeah, my my biggest money fear, um well I’ll I’ll give you two. When I was first starting on my journey, my biggest money fear was not achieving personal financial freedom and being stuck in a cubicle for 30 years. Um, you know, not being able to to realize or maximize my potential. That was my overarching fear that led me to take a pretty aggressive um approach to personal finances. I think, you know, today, I’m really grappling with a fear around is optimization of my portfolio costing me more spendable liquidity in the near term than I otherwise might be able to achieve. Like should I be just generating simple interest and cash flow and paying the tax man and being able to spend it or should I be continued to be in these very tax advantaged um uh uh investments with my um stock investments, 401K, uh rental property portfolio and so on and so forth. So that’s a fear. I think there’s like a, what’s the best way to optimize this this uh advantage that I’ve created for myself with, you know, and and the opportunity and privilege and luck to achieve in um, you know, uh a sizable personal financial position. How’s that for a convoluted fear?
Mindy: I think it’s a matter what you are looking for. I mean, what are your goals? My money goals are going to be different than your money goals because I’m at a different place in my life. But my money goals now are just like, my biggest fear of money is wasting it. I don’t know if you’ve ever heard me say this, Scott, a thousand times in an hour and a half recently. But I don’t want to waste money. I don’t want to spend it on something that ultimately wasn’t a good use of that money. and what I have been learning is that experimenting with smaller amounts on new expenses is a great way to determine if this is in fact a waste or not. and I hired a cleaning person and when she was done, the she came last Friday for the first time, and when she was done, she hadn’t even done the whole house because the first time they need like 27 hours if you’re me. But I was amazed at how good the house looked. and it was not a waste of money at all. I would have paid twice that. Just don’t tell her. Uh, and it was it was so fantastic. She’s coming back this week to finish up the rest of it and we’ve been trying to keep the house clean, but it was so easy to keep it clean once it was already clean or half clean because it was a big mess. Um, but yeah, fear of wasting, I don’t really have a fear of running out, but fear of wasting what I’ve got and doing dumb things with it.
Scott: I think we’ve known about that fear and maybe Mindy, a a avenue to explore would be, how do you develop an equally counter or counter counter balancing fear of wasting time um and balance those two off one another. Maybe that will maybe that’s how you use uh a healthy amount of fear to to help make it even better, even better decisions than the ones that you’ve uh made already.
Mindy: Wow. When did you get so smart, Scott? Now I got to go dive into that thought.
Scott: That’s the trade-off, right? If you’re not, you know, uh I I do want to leave everybody with one last thought here on on fear, right? So I again, just from a practical guida guiding point, you know, I I’ve found and and this is like in the parenting books I’ve been reading which I’ve been devouring, you know, uh lately since now that we have a little one. But there’s like something a cool little concept that I’ve never really, you know, that that is so obvious to many parents out there. But it’s labeling your emotion, right? Just like stating it, like even saying it out loud, when you’re feeling a strong emotion, once you label it, you can control it. Once you label your fear and actually like just like say it, what is like what am I fearing here? What do I assign the probabilities of that of those outcomes to? Um, that is the first step here. If you take nothing away from this episode, I think that just that one thing of labeling it and saying, I’m afraid of this is so freeing, um, to a certain point and allows you to begin a the the plan of attack to address that fear even if it takes a long time. So, that’s just that one action piece that I would encourage people to to walk away with is just label it. Um, and apparently that’s also like super healthy for kids. That’s what they they teach a lot of the parenting books is like when your kid is throwing a tantrum, you’re jealous or you’re angry or you’re hungry or whatever it is, um, even from an early age, apparently, that helps them, um, control their emotions better. So it’s certainly helped me, uh I immediately put it to use in my own life.
Mindy: I love it, Scott. That’s awesome advice.
Scott: All right, well, should we get out of here?
Mindy: We should, Scott. That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench and I am Mindy Jensen saying get out of the house, mouse.
Speaker 1: If you enjoyed today’s episode, please give us a five star review on Spotify or Apple. And if you’re looking for even more money content, feel free to visit our YouTube channel at youtube.com/biggerpocketsmoney. Bigger Pockets money was created by Mindy Jensen and Scott Trench, produced by Kalyn Bennett, editing by Exodus Media, copywriting by Nate Wine Troub. Lastly, a big thank you to the Bigger Pockets team for making this show possible.
