TGBA #15: What Marshmallows and Garbage Cans Teach Us About Life and Goals

Welcome to the 15th edition of?#theGoalsBasedAdvisor?Newsletter!?

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Laying Stones or Building a Cathedral

Working to launch a brand-new private wealth management business, I had the task of building and launching the investment platform. I knew that we were late to the party, that many other firms had well-established businesses, and that we would be hard-pressed to differentiate ourselves.

I had to do research, to identify key pain points that clients and advisors faced in the industry, and to find new developments on the horizon. I also was lucky enough to have a boss that gave me the time and freedom to figure things out and trusted me to make it happen. As a result, I was able to frame the situation as an opportunity to build, from the ground up, an approach and platform that resonated deeply with clients and advisors and that was even featured in the national press.?

Framing the situation makes all the difference in the world － to better decisions and to better life satisfaction. There is the old story of the three stonemasons, apparently based on the real experience of Sir Christopher Wren who built London’s famous St. Paul’s Cathedral. The story goes:?

One day, Sir Christopher observed three stonemasons working on a scaffold. The first said he was just laying stones to feed his family. The second said he was building a wall. But the third, the most productive of the three, said he was building a great cathedral for The Almighty.

A story? Maybe. But modern science bears it out. Amy Wrzesniewski, now a professor at the Yale School of Management, was interested in the questions of who loved their jobs, who didn’t, and why. She interviewed hospital workers and found, to her surprise, that it wasn’t the doctors, the nurses, or even the clerical staff, that loved their jobs most. But it was a group of janitors. While one group of janitors griped about their jobs, that it was dirty, that it wasn’t highly skilled. So far, nothing newsworthy. But, a second group of janitors with the same jobs, at least on paper, found the job highly satisfying. Many reported going out of their way to learn as much as possible about the patients whose rooms they cleaned, down to which cleaning chemicals were likely to irritate them less. “It was not just that they were taking the same job and feeling better about it, pulling themselves up by their bootstraps and whistling. It was that they were doing a different job.”

Delayed Gratification

Similarly, there is the classic Marshmallow Test conducted by Walter Mischel in the 1960s. In these experiments, Mischel’s team would present a child with a marshmallow and tell them that they could either eat the marshmallow immediately or wait alone in the room for several minutes until the researcher returned, at which point they could have two marshmallows. In the follow-up study years later, Michel found that the children who could delay gratification fared better in life. They performed better academically, earned more money, and were healthier and happier. They were also more likely to avoid a number of negative outcomes, including jail time, obesity, and drug use.

What was really interesting is the techniques that the children who were able to delay gratification used. The study suggested that successful children suppressed their attention to the expected rewards. For instance, some children who waited for the researcher would avoid looking at the marshmallow, stare at a mirror, cover their eyes, or talk to themselves. Mischel found in later studies that “the crucial factor in delaying gratification is the ability to change your perception of the object or action you want to resist.”

Reframing Your Experience

In Sweden, the steps at a major subway stop were turned into a giant piano keyboard, with each step producing a different musical note. to encourage people to take the stairs instead of the escalator. The result was that 66% of people chose to take the stairs instead of the escalator.

On my recent trip to Vienna, I saw public garbage cans with interesting and creative signs that reframed the experience of throwing out garbage into something more fun and thus more likely to be done.

These findings have direct implications for advisors dealing with clients when it comes to budgeting, savings behavior or not giving into FOMO or fear in investing. Change the perception to change the behavior. Reframing a choice between splurging on a purchase now or saving the money may be easier to stomach if the client can visualize their child graduating from college as a result of foregoing the splurge.?

Visualization of Goals

Granted, this isn’t easy, but visualizing goals and the path to achieving them has been proven scientifically. Michael Phelps, the 15 gold medal Olympic swimmer, credits visualization for his success. He says that he watches? "his videotape" of the perfect swim in his mind each night before going to sleep to mentally map out his ideal swim for the next day.?

In a famous experiment, Australian psychologist Alan Richardson divided basketball players into three groups. The first group practiced free throws for 20 minutes a day, the second group visualized making perfect free throws (but did not physically practice), and the third group did neither.

The results showed that the second group, who used visualization, showed a significant improvement in their free throw skills. They were almost as accurate as the group that physically practiced. The third group, who did nothing at all, actually regressed in their skills. Richardson's results show that visualization can be a powerful tool to improve performance. It is likely even more powerful when paired with physical actions.

Advisors who can help clients visualize their goals as well as map it out on paper,? help them frame why they want these goals, what the likely obstacles to achieving those goals are, and how they might respond, are paving the path for their clients to reach these goals. And in doing so, they are building a healthy and successful financial advisory practice that is future-ready.

How we see the world defines how we interact with the world, how the world reacts to us, and how we then perceive the world.?

The world can be either a playful piano escalator or a boring set of stairs. The choice is ours.

As Shakespeare said, “Nothing is good or bad, but thinking makes it so."

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