I have client after client tell me that the world is going to hell in a handbasket. Leaders gain power by vowing a return to the “Good ‘ol days.” But is your mind playing tricks on you? According to research by Adam Mastroianni and Daniel Gilbert, your brain has tricked you into thinking everything is worse.
There is a set of cognitive biases in our brains that cause us to perceive a fall from grace—even when it has not happened. These well-established psychological phenomena have us focusing on the negative. So before you empty your portfolio and bury your money in your backyard, listen to this episode of Best in Wealth. Because there is reason to remain hopeful.Is more decline an illusion—or reality? Hear my thoughts—and why it matters to investing—in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement Click To Tweet
Outline of This Episode
- [1:06] How good things used to be
- [2:09] Is your mind playing tricks on you?
- [5:53] The types of questions asked in the survey
- [7:29] Biased exposure and biased memory
- [13:30] People exempt their own social circles from decline
- [15:40] How to remain positive despite our biases
Is your mind playing tricks on you?
Until now, researchers had only theorized why people believe that things have gotten worse. But Adam and Daniel were the first to investigate, test, and explain where that mindset comes from.
They have collected thousands of surveys from all races, religions, economic backgrounds, etc. They have found that people believe that everything is worse now compared to 20, 30, 40, or 50 years ago. But people are wrong about the decline of morality.
They have been collecting this research for 25 years. When they asked people the current state of morality, people gave almost identical answers over the last 25 years. Every year, people reported a decline in morality. But why does everyone always think things are worse? Is it because they are actually worse?
Now I am not saying that things are not bad. We are facing a war between Ukraine and Russia. People in the US are divided on every front, politically or otherwise. We are dealing with high inflation. But is it noticeably different than 20, 30, 40, or 50 years ago?
These two researchers compiled the evidence. What do they think?Is your mind playing tricks on you? Has the world actually gotten worse? Find out what the research says about moral decline in this episode of Best in Wealth! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning… Click To Tweet
Biased exposure and biased memory
It is all an illusion created by our brains because of biased exposure and biased memories.
Biased exposure happens when people encounter and pay attention to negative information because it dominates the news cycle. All we see are bad things. Negativity is perpetuated in our culture.
Secondly, humans have biased memories. The negativity of negative information fades faster than the positivity of positive information.
When you get dumped, it hurts in the moment. But as you rationalize, reframe, and distance yourself from the memory, the sting fades. But the memory of meeting my wife for the first time? I can still see her walking into the bar. I will never forget that. I still feel giddy inside.
When you remember your childhood, you likely remember the holidays, the birthdays, summertime, etc. Your world was great. But do you remember getting dumped? Do you remember getting in trouble?
When you put these two cognitive mechanisms together, you create the illusion that things are worse off now than they were. In the article, Adam says, “When you’re standing in a wasteland—but remember a wonderland—the only reasonable conclusion is that things have gotten worse.”
The illusion of moral decline is just that—an illusion
The world is different. We cannot argue that. Bad things are happening. But can we really say things are so much worse? Or is it biased exposure and biased memory at play?
As long as we believe in this illusion that things are worse today, we are susceptible to the promises of the aspiring new Presidents who claim they can return us to a golden age. But that golden age only ever existed in our imaginations.
But before you bury you empty your portfolio and bury your money in your backyard, listen to this episode. Because there is reason to remain hopeful.In this episode of Best in Wealth, I share why the illusion of moral decline is just that—an illusion. Check it out! #wealth #retirement #investing #PersonalFinance #FinancialPlanning #RetirementPlanning #WealthManagement Click To Tweet
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The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.