History of TV and Money!
I’m gonna let you in on a dirty little secret. TV and pop culture have manipulated you and your brain!
It was by design. It has crept into your subconscious and it has caused you to make a bunch of bad decisions in your life and in particular your financial life. How much TV (Netflix) do you or your family watch in a day? A 2010 study showed that the average child watches more than 4.5 hours of TV a day. That’s over 1600 hours of TV in a year! Now let’s talk about how it affects you and what you need to do to fix it.
With over 1600 hours of TV watching our brains get bombarded with lots of information and the entertainment and business world know that your subconscious can be manipulated. There is a reason the companies that make commercials use the images and music and jingles that they use. They make a connection in your brain.
If I say ba da ba ba bah, I’m lovin it! Everyone across the globe regardless of age knows that is the tagline for McDonald’s. For most people it creates a positive response. Jingles and commercials are designed to get you to relate a song, tag line or jingle to a particular product and then when you see that product you feel good about it and buy it. The shorter the better and the more repetitive the better. Psychologists call this an earworm because it burrows into your brain and makes a hook and comes out when you least expect it. Like in the deodorant aisle and you see a container of Speed Stick and in your subconscious you hear “by…Mennen”. Mennen is the maker of Speed Stick and you drop it into your cart without even giving it a second thought.
“We don’t know much about what causes earworms, but it could be the repeating of the neural circuits that represent the melody in our brains. It might also have to do with some of the findings of researchers Alan Baddely and Graham Hitch, and the model of working memory, the part of the brain that practices and repeats verbal information [source: Models of Working Memory]. In 1974 Baddely and Hitch discovered what they called the phonological loop, which is composed of the phonological store (your “inner ear,” which remembers sounds in chronological order) and the articulatory rehearsal system (your “inner voice,” which repeats these sounds in order to remember them). This area of the brain is vital in early childhood for developing vocabulary and in adulthood for learning new languages.”
Ever wonder why you can’t get Britney Spears or Taylor Swift out of your head after only hearing them one or two times?
Researchers have noted that the shorter and simpler the melody, the more likely it is to get stuck in your head — this is why some of the most common earworms are jingles and the choruses of pop songs. It’s why I can’t get MC Hammer out of my brain. He’s been dancing around in my head for 30 years now. Earworms tend to occur more often in musicians than non musicians and in women more than men. Those suffering from obsessive-compulsive disorder can be particularly irritated by earworms. Sometimes, actually hearing the offending refrain (or replacing it with something equally infectious) can clear an earworm from the mind, but, unfortunately, there is no surefire way to get rid of them.
Now I am not saying ear-worms are the cause of your financial challenges, but it is certainly a part of it.
TV has a long history of talking about money in both a good and bad way. A quick google search showed dozens of shows with money in the title just in the last 20 years everything from Win Ben Stein’s Money (which by the way you didn’t actually win) to Dirty Sexy Money. You have Mad Money, Fast Money and my personal favorite title For Love or Money. For those that don’t know For Love or Money aired during the Summers of 2003 and 2004 and was a reality dating game show where the winner had to decide between love or some amount of money. It was a fascinating look at how money affects people’s decision making. We will dig deeper into this one later on in the book.
TV has convinced you that stuff is cool and necessary (even when it wasn’t). Most parents (me included) have chased after the latest and greatest Cabbage Patch Kid, Furby, Nintendo, or Tickle Me Elmo doll at Christmas time. Part of it was because we want to make our kids happy and not disappoint them. Even if there are lessons we could teach them about wanting frivolous stuff. The bigger part is biological and psychological. Your brain is robbing your bank account. Researchers have studied the brain chemistry of people right before and after buying stuff and have found a significant difference in the chemistry of people who purchased the big screen TV and those who walked away. So it is not all your fault.
Napoleon Hill said during the Great Depression that “poverty and riches are the offspring of thought” (Think and Grow Rich). When it comes to money your brain is going to determine whether you become rich or not? The sad thing is that TV and advertisers know that and are manipulating you to make bad money decisions. Let’s take a quick look at how your brain makes money decisions
Short Term Memory
One of the greatest cognitive biases is the inability to differentiate between short term patterns vs long term trends. Ok what the heck does that actually mean? Many psychology professionals call this phenomenon Recency Bias. People put too much emphasis on any recent experiences when they are making decisions regarding money. Think about your friends or family chasing real estate when prices are rising in 2006-2008 but running away from it when prices are exceptionally depressed in 2011-2013. When prices are going up whether it is real estate or the stock market people irrationally think that the prices will go up forever.
Social psychologist Irving Janis coined the term in the 1970’s. Group Think is the notion that people are to trusting of conventional wisdom and the actions of other people in their group. We don’t have to go far back in history to find examples of Group Think. People jumped full bore into housing from 04-07 fueled by the belief that high returns were normal and would and should continue. Residential real estate historically rose at a rate slightly above inflation according to the Case Schiller Home Price Index when we look at the period of time from 1987 to 2008. Unfortunately the period from 2000 to 2006 saw prices rise 11% a year thus leading to the irrational group think response by so many people buying homes during this period of time. Of course it was fueled by record low interest rates and many other factors but for many their brain betrayed them into thinking their house could never go down in value, which is obviously wrong.
If it ain’t Broke
We have all heard the expression “If it ain’t broke don’t fix it!” When it comes to money people have a very strong status quo bias. We all have been stuck in things whether it be a credit card account that charges us a fee or a gym membership that we don’t use where it may take us years to do something about it. This can lead to a big drain not only on your short term budget but your long term financial success. Companies prey on our lethargy to get us locked into things knowing that it will take many of us years to get fed up and make a change.
Too Fast and Too Furious
When you are in a hurry you will make irrational money decisions. Sales people and companies know that is why one day or flash sales on the internet are so effective. It is also one of the reasons infomercials make so much money. Raise your hand if you are guilty of purchasing something off of QVC, Home Shopping Network, from Billy Mays, Vince Sholomi or another infomercial sales guy. My guess is all of you are raising your hands. I know I am and guess what it’s not your fault. There is strong science behind infomercials. They are perfectly written and delivered to set off your brain waves to make more dopamine (the happiness chemical in the brain) and compel you to make a purchasing decision.
It really is not your fault you make bad money decisions. We are not trained to think about things like mortgages, car loans, student loans and investments on a daily basis. We only deal with them when we are forced to. Most of us are also not trained on how to spend on a day to day basis. This is what TV and companies manipulate. They want people to act without really thinking about the consequences of the decisions. Many of us are taught to put more weight on current gratification more than thinking about your future. People emotionally prefer to live in the now and deal with the future when they get there.
I am not going to let you off the hook. Now that you know that the media and your brain is working against you what changes are you going to make to have better outcomes from your financial decisions.