Monkey Brain Takes a Placebo: Part 2

Placebo at O2 Indigo

Tattooing it on yourself doesn’t work the same.

“A placebo works only if the patient believes it’s an effective medicine. Within strict limits, hope, it seems, can be transformed into biochemistry.”
–Carl Sagan

As we saw in the previous article, the body has an amazing ability to heal itself. However, sometimes, we need to kick-start that capability by fooling the body into thinking that we’ve done something good for it. This is known as the placebo effect, and, as long as we have the capacity to heal ourselves and believe that what we’re implementing will do the trick, then we can improve our chances of recovery.

There are times, though, when getting rid of the symptoms doesn’t actually lead to a recovery. Whether we’re stopping a beneficial fever that might kill off viruses or stopping ourselves from visiting the porcelain throne to get rid of toxins that we ingested in a wild bender that night, the cure could be worse than the disease.

In this article, we’ll explore how the placebo effect could convince Monkey Brain that everything is A-OK with our financial situation, keeping us from taking action that we need to take.

Is that a placebo or an aspirin in your wallet?


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As we discussed in the previous article, 76% of people surveyed by the American Psychological Association cite money as their number one cause of stress.

Monkey Brain doesn’t like stress. He doesn’t like pain. He likes pleasure.

Furthermore, as Cambridge’s Dr. Nicholas Humphrey explains, placebos are pleasing. We’d rather feel good than not, even if feeling better might be good for the short term but bad for the long term.

Thus, when we’re in stress or pain, we’re going to seek relief.

Monkey Brain is going to encourage you to do something that makes you feel better without actually causing him pain. As we’ve established before, he wants pleasure, and he wants it now, without a care in the world about what pain you’ll have to deal with in the future, such as credit card debt or not having enough to retire.

How can he alleviate pain now without actually committing himself to any of the actions necessary to truly relieve the stress caused by a bad financial situation?

He tells you to go read about personal finance.

What happens is that when you read about personal finance, you project yourself doing something about your situation. When you make mental projections about accomplishing a plan, Monkey Brain gets the same pleasure as if you actually did the plan.

The pain goes away, but you’re only treating the symptom. Your financial pain receptors are dulled while the cancer of bad behaviors continues to grow.

Then, a couple of months later, you wonder what happened and why things aren’t better. You go check some more websites, watch CNBC, read books, whatever. You’re now caught in analysis paralysis. You let mundane questions like “which credit card do I pay off first?” or “emergency fund or IRA?” dominate your thinking, and you never act.

But, this isn’t the only downside to the placebo.

“But I’m not dead yet!”

10 points if you recognize the reference.

Sometimes when you’re sick, you just get better on your own. You don’t actually need to do anything and you get better. Think about what happens if you have a cold and schedule a doctor’s appointment. You set the appointment, but the doctor is busy, so you can’t get in until next week. By the time the appointment rolls around, you’re actually better.

If you let Monkey Brain apply his logic, then the reason you got better was because you scheduled an appointment with the doctor.

What’s happened is that we’ve confused two related ideas: the placebo effect and the meaning response. As Drs. Daniel Moerman and Wayne Jonas explain, there are times when we seek treatment for an ailment, but we would have gotten better anyway. In most cases, if you have a fever, the fever eventually goes down on its own, since the body has defeated the virus or bacteria that it needed to kill off. You could take a placebo, but you were going to get better anyway.

Sometimes, this happens in your financial life. You could have had a particularly expensive month when the car broke, your dog got sick, and you got a speeding ticket at the same time. You’re (rightfully) starting to worry, and Monkey Brain tells you to go read a bunch of stuff about personal finance. You read it all, and next month, the expenses go down. Monkey Brain believes that reading solved all of your problems. Time to kick back and enjoy banana daiquiris.

The problem is that you’ve simply reverted to the mean. You haven’t addressed the underlying problem, which is your financial security and establishing good habits that will serve you over the long term and cushion you against those living country lyrics in the future.

Actually changing your behaviors would have triggered a meaning response – namely, healthier financial habits. However, reading more just created a false sense of security and a false placebo effect. Monkey Brain convinced you that something happened when nothing actually did.

It’s easy to fall into these false placebo effects in our lives. Opportunities abound. You can say that you’re going to start that diet right after the holidays. You can join a gym and tell yourself that you’re getting healthy because you joined a gym, even if you never actually go. You can say that you’re going to get on a budget and tell yourself that you’re controlling your spending and saving for retirement when you’re actually not.

Knowledge isn’t enough. Action is required.

About Jason Hull, CFP®

Jason Hull, CFP®, is the Chief Technology officer of myFinancialAnswers, an online comprehensive financial planning service.

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