The Long View

Meir Statman: ‘The Biggest Risks in Life Are not in the Stock Market’

Episode Summary

The behavioral finance expert and author on the connection between financial well-being and life well-being, the role of social comparisons, and the next generation of behavioral finance.

Episode Notes

Today on the podcast, we welcome back Meir Statman. Meir is the Glenn Klimek Professor of Finance at Santa Clara University. Meir’s latest book is A Wealth of Well-Being: A Holistic Approach to Behavioral Finance. Other books include Behavioral Finance: The Second Generation, What Investors Really Want, and Finance for Normal People. Meir’s research has also been published in the Journal of Finance, the Financial Analyst Journal, the Journal of Portfolio Management, and many other journals. He received his PhD from Columbia University and his BA and MBA from the Hebrew University of Jerusalem.



A Wealth of Well-Being: A Holistic Approach to Behavioral Finance

Behavioral Finance: The Second Generation

What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions

Finance for Normal People: How Investors and Markets Behave

Financial Well-Being

Financial Advisers as Well-Being Advisers,” by Meir Statman,, September 2019.

More Time or More Money? How Wealth Affects What We Value,” by Meir Statman,, October 2022.


Meir Statman: ‘We Are All Normal,’” The Long View podcast,, Oct. 30, 2019.

What Is Cantril’s Ladder?” by Michael Hartnett,, Feb. 9, 2024.

High Income Improves Evaluation of Life but not Emotional Well-Being,” by Daniel Kahneman and Angus Deaton,, Sept. 21, 2010.

Why Olympic Bronze Medalists Are Happier Than Silver Medalists,” by John A. List,, Feb. 10, 2022.

The Mental Mistakes We Make With Retirement Spending,” by Meir Statman,, April 24, 2017.

Episode Transcription

Christine Benz: Hi, and welcome to The Long View. I’m Christine Benz, director of personal finance and retirement planning for Morningstar.

Amy Arnott: And I’m Amy Arnott, portfolio strategist for Morningstar.

Benz: Today on the podcast, we welcome back Meir Statman. Meir is the Glenn Klimek Professor of Finance at Santa Clara University. Meir’s latest book is A Wealth of Well-Being: A Holistic Approach to Behavioral Finance. Other books include Behavioral Finance: The Second Generation, What Investors Really Want, and Finance for Normal People. Meir’s research has also been published in the Journal of Finance, the Financial Analyst Journal, the Journal of Portfolio Management, and many other journals. He received his PhD from Columbia University and his BA and MBA from the Hebrew University of Jerusalem.

Meir, welcome back to The Long View.

Meir Statman: I’m delighted to be with you and with Amy.

Benz: Well, thank you. We’re thrilled to have you here. We wanted to talk about your latest book, which is called A Wealth of Well-Being, and we wanted to talk about what motivated you to write a book about well-being more broadly speaking and all of the different factors—financial and nonfinancial—that contribute to our sense of well-being.

Statman: I often note that the biggest risks in life are not in the stock market. I say, if you want real risk, get married, and if you want more risk, have children. And people laugh as you just did because, of course, the point is obvious, and yet that point is lost when we discuss financial well-being and overlook life well-being. And life well-being is really what we seek. And life well-being requires financial well-being. You cannot do things without money. You cannot support a family without money. But life well-being is also about family. It’s about friends. It’s about health. It’s about work. It’s about education and religion and society. And all of those things matter in life well-being. I don’t ignore financial well-being. You cannot be really having high life well-being without having money. But money, as anyone will tell you, is not everything.

Arnott: As you were just saying, you have described the third generation of behavioral finance as being about life well-being. And you’ve been in this field for a long time. You have three other books, and you’ve published many journal articles. Can you summarize for us what the first and second generations of behavioral finance were about?

Statman: Yes, well, let me start with standard finance. And in standard finance, people are described as rational, computer-like, rational. Rational people are interested only in maximizing their wealth. And as computer people, they know exactly how to do it. In the first generation of behavioral finance, we discovered, and we told others that people are in fact bumbling irrational. That is, they do want to maximize their wealth just like rational people. But they make all kinds of cognitive and emotional errors. For example, they trade too much, and they waste money doing so, diminishing their wealth rather than enhancing them. In the second generation of behavioral finance that I introduced, I said something that is really very well known to all of us, and especially to people who specialize in marketing. And that is that people search in everything, in investments and in life more generally, for three kinds of benefits.

One is utilitarian benefits. That is what kind of return can I expect from my investment, but also expressive and emotional benefits. And so, when we think about, say, investing, I’m thinking of the expressive benefits that I derive as a father and a husband. And I say, I feel that I express myself as a responsible member of the family, earning money and investing it wisely for the family. And of course, that pride, that emotional benefit that I derive matters as well. And so, when you listen to that and when I mention it to people, it is kind of well, of course. Yet when we talk about financials, somehow this disappears. In the second generation, then I describe people as being normal. We are neither rational nor irrational. We are not stupid, and we are not computers. We are normal. We want many things, those three kinds of benefits. We do make mistakes on the way to getting those benefits, but that is normal. Everyone is normal. I’m normal. You are normal. Our listeners are normal.

The third generation still describes people as normal, but now it really broadens its lens to look at people, look at us as whole human beings. And as human beings, of course, we need financial well-being to support us, but we also hear about all of those other domains that I mentioned— family and friends and work and health and religion and so on. And so, what I wanted to do really is to bring it all into focus so that people, whether it is investors or especially perhaps financial advisors, cross the boundary between financial well-being to life well-being, ask questions, listen carefully about what it is that their clients really want. And along the way, they’re going to make the kind of relations, the kind of context with clients that goes way beyond discussing what the Fed is going to do next and even what kind of path you’re going to take on the way from retirement to the end. These are going to be heart-to-heart conversations that bring advisor and client closer together and benefit clients as well as advisors.

Benz: It sounds like this book is coming from a really personal place you’ve indicated. And I’m wondering if you can talk about the extent to which your personal experiences and your family experiences influenced you to write a book about well-being broadly speaking as opposed to more narrowly focused on financial well-being?

Statman: I’ve always been interested in human behavior. Every kid is interested in figuring out what makes other people tick and how to be friends and so on. And I’m no different. But in some ways, being an immigrant, having come from Israel, I was watching myself and I was watching the natives, the Americans, and trying to make sense of them. And along the way, I realized the differences and I realized what life well-being means. For example, not long after I came to the United States—that was in 1973, so we’re talking about 50 years ago—and I was on a train and the people ahead of me were speaking and I overheard them. And one said to the other, “I told my daughter that I’ll pay for her college education, but if she goes to graduate school, she’s on her own.” I was thinking, wow, those Americans are really strange because the culture in which I grew up, my parents, if they can, they would have supported me throughout my studies and taken pride in their ability to do that and in their son, who is going to graduate school.

And so, I have learned many things by comparing my experience to that of others. For example, a few months before I was married, my wife, Navah, and I were married in 1969, so it is more than 50 years that we have been married. My parents drove up to meet Navah’s parents. We had a dinner together and then Navah and I were excused to go for a walk and our parents sat down to business, and businessmen deciding how much each pair of parents is going to give the young couple to start them on their life. And this involved a downpayment, at least on an apartment. And so, when I think about that and I compare it to some people who say, well, I financed my college education on my own, I worked and so on. I say, well, that’s not my experience. And I think that my experience is better, of course.

You have to have the means as parents. As I was contemplating coming to the United States for my PhD program, at some point it seemed like I would not be able to get sufficient means to make it. And I went to my father for a loan, and he said, “Look, Meir, I’d love to give you money, but you have a younger brother and sister. And they too will want to get married. And I have to think about them. I have to allocate that money to them. I’m afraid that I don’t have more than that.” And so, I’m not suggesting that parents are going to imperil their financial and life well-being by supporting their kids more than they can, but within means. And there are many Americans who have the means, but somehow think that it is not right for them and for the kids.

And, on top of that, of course, when I say that getting married and having kids is risky, I know what I’m talking about because we have two daughters, Barbara and Ruth. And Barbara unfortunately, lives with bipolar illness, a mental illness. And, when we encountered it the first time, it felt like our world is coming to an end, or at least that is how I felt. And it was attributed to family dynamics, that was a long time ago. And it really made a marriage difficult. And so, I can see that. And those kinds of descriptions that we have of parents raising kids, they leave home, and how we plan for spending our money until we die, that’s nonsense. Each family has points of thing. If it is not a mental illness, it might be something else, a physical illness, an early death, a difficult marriage, poverty, lots of things.

And so, as I was thinking about my life and how I put things together and how my life well-being is higher than at the time when we encountered Barbara’s illness for the first time, I say, of course, there is more to well-being, to life well-being than money. We are fortunate to have money to support our daughter. But we are also fortunate, even more so, that Ruth, Barbara’s younger sister, loves and supports her. And we are quite confident that she will continue to do that when Navah and I are gone.

Arnott: I think that’s a really important point that ties into the theme of the book, is that when people have difficulties in life or family members have difficulties, there are many different resources that you can draw on. And so, not just money is always helpful, but as you said, having a younger sister who is able to help out or to draw on the strength of your family and friends is something that can make a big difference.

Statman: Indeed, yes. And it is important to share those points of pain. And I just, maybe two weeks ago, I was speaking with a colleague, and he told me about his daughter, his younger daughter, who suffered a very disabling brain injury. And now he said their lives revolves around supporting their daughter. And I shared with him, of course, my story. And so, we are both people who know pain, and yet we alleviated pain in each other by sharing that and by supporting, at least empathizing, with each other. And when I talk about, say, Barbara’s situation and our situation, when I speak to advisors, invariably, advisors approach me after my talk to tell me about their children. And even those who do not speak with me afterward, I know that they encounter similar issues in their family and the families of their clients. And here it might be difficult for many advisors but disclosing this to clients, says to clients, I have points of pain that I would rather not share. But now that my advisor is telling me his or hers, it makes it easier for me to come forward. And all of those things, this is not just idle conversation. That is, if you have a disabled child, there are some financial implications, of course, very important financial implications about how to care for the child now and how to ensure care later on. And so, these conversations are really, really important to us as people and as advisors or as professors.

Arnott: I was thinking, as you were talking, there are really two dimensions to that type of sharing. There’s the empathy piece, the sense that you’re not walking this road alone, which is hugely important, but also just the sharing of resources and information and ideas about how you dealt with various aspects of what sound like fairly difficult situations.

Statman: Indeed. That is really in some way, our road to recovery came in two ways. One, when we found a psychiatrist who diagnosed Barbara’s conditions properly away from family dynamics, and it was a real mental illness. And when we found NAMI, the National Alliance on Mental Illness, this is an organization, of course, that supports families, people who are dealing with mental illness. We got a lot of help from them just knowing again that we are not alone, having those resources. And then Navah has been a volunteer with NAMI for decades now. They have, for example, courses, family to family, where families come together, and they share information and learning. And there is a warm line—it’s not a hotline—it is people who face a problem that relates to mental illness and are looking for advice, whether it is Social Security payments, so whether it is issues with the police or whatever it is. And Navah is on that line, and she offers, again, empathy and specific advice that she has learned and can share. And that by itself, of course, increases Navah’s well-being in addition to the people she helps. And by a projection at least, it increases my well-being—being proud of Navah knowing that she does so much good for others.

Arnott: Well, the book covers so much ground. You talk about well-being, which is the title of the book. You talk about different types of capital, social comparisons, saving versus spending, investing. So, from all these areas, what are some of the main takeaways you’d like readers to come away with?

Statman: I think that one takeaway really is to understand the many domains of financial and life well-being or really life well-being beyond financial well-being. And just knowing them. So, what I do in the book is I combine material about well-being that have been compiled by economists, by sociologists, by psychologists, and so on. Systematic evidence with stories that I derive from interviews from articles in The New York Times, and The Atlantic, and so on. So, it really comes alive. It is not a dry academic text. But what I would like people to take away from it is to understand that when people talk about happiness or life well-being and say it is about marriage, it is about friendship—yes, but it is not just one thing that if you get it right, you are happy or you have high life well-being. It is all of them. That is, we derive well-being from each of those domains. For some people, religion is really central to it. And more than that, just as I spoke earlier, no family, no person, I think, is free of pain.

No family has all of those domains that are perfect. Plenty of money, happy family, kids who go to Ivy League colleges and so on. There is always a pain someplace. And I suppose that the art of well-being, what I have learned as I was thinking and studying it is that we gain well-being by transferring well-being medicine from one domain to the domain where the pain is concentrated. And so having money in that finances domain helps with the pain that comes with a disabled child. Not all of us are fortunate to have work that is a vocation. Some, unfortunately, have work that they feel is drudgery, but they still must have it because they need to earn money. And so, they find well-being in being a good parent, being a good friend, in reading, and education, and so on.

There are really many ways to be enjoying life well-being. And as hard as it is, really avoiding focusing on one and saying, if that one is not perfect, I cannot be enjoying high well-being. That kind of sense that my life is now disintegrating when we encountered Barbara’s illness because I thought, I did my work, I got a job, and so on. Why is it happening to me? And of course, why not? God does not have anything in particular against me. It is really very common. And learning to live with that pain and to heal that pain with some surplus in other domains is, I suppose, if you can call it, the art of well-being.

Benz: To delve into well-being a little bit more in the book, you discussed different types of well-being in addition to financial well-being, emotional, evaluative, and meaning well-being. Can you go through each of those and discuss what each of those terms mean and maybe provide some examples?

Statman: Emotional well-being is what we think about is how do I feel right now? Am I happy? Am I sad? Am I angry? Am I frustrated? These are really momentary emotions, and they might fluctuate during the day. I got some bad news some time ago. It upset me for a morning long and then in the afternoon I said, it’s not the end of the world. Evaluative well-being is about how we assess our lives as a whole. It’s not really an emotional well-being that we feel right now. It is if I think about my life as a whole, if I compare myself now to others, if I compare myself to how it was years ago, would I say that my evaluative well-being is as high, medium, low, and so on? Meaning well-being goes beyond that to ask, can you say my life has meaning? I know my purpose in the world. I know why I am here and that really goes beyond them. And so, you can see what happens.

Some people, for example, give in to the temptation of the quick feelings. I tell a story of a man, an elderly man, who had four children by four different women and never married. Now he’s old and he’s keeping in touch with only one of his children. And now he says, I’ve no one to take care of me. And so, you can see how he sacrificed his evaluative well-being for those good feelings of his youth. Other people leave jobs that pay well to find meaning and that they may find in being farmers, for example, or being volunteers in other countries or in their community. Some people become priests or ministers later on in life, finding their vocation there. And so, we see that there are those three kinds. I think that the book really focuses more on the evaluative and meaning part of well-being.

Arnott: One of the tools that you use in measuring well-being is called the Cantril’s Ladder. I think it’s also sometimes called the Cantril self-anchoring scale. Can you tell us a little bit more about what that is and how you use it with your students?

Statman: Yes, well, this is a very common and very good way to measure evaluative well-being. It is a very simple question that says, imagine a ladder with steps, numbers from zero to 10, thinking of your life as a whole. What step would you say you are standing on right now? So, is it a four, a five, a seven, perhaps a 10? So, people, when they hear this question, they are forcing themselves to think, where am I altogether? Not how do I feel right now, but how am I altogether? And so, these numbers turn out to be quite reliable. I tried it on my students and of course they get the point. I asked that question of financial advisors when I speak with them and there is an interesting figure that looks like the letter U. And so, our evaluative well-being tends to go down from early adulthood until middle age, say the mid-50s, and then it begins to go up. And it seems kind of odd how is it that older people can enjoy higher well-being than younger ones, given that with age comes infirmity, unless perhaps misfortunes. But I think that what is happening is that our aspirations decline to meet our situations. We are no longer driving so hard, and we say, yeah, there are people, richer than us, there are people who have perhaps more successful children, but we are doing just fine.

Arnott: Why do you think there is that pattern where the sense of well-being seems to decline in midlife? Is that just because of the pressures of children going to college and parents getting older? Or is it the realization that some aspects of your life didn’t turn out the way you thought they would?

Statman: I think that the sum of it is, as you mentioned, that is the kids are maybe teenagers or in college, the financial pressures might be high. But also, when we compare our aspirations to our situations, we find ourselves lacking. That is, we are still very ambitious. Early on we thought that by now we are not going to be the vice president, we are going to be the CEO of the company. We are going to be a full professor rather than an associate professor. And now having aspirations that exceed situations involve ambition. And ambition pushes us forward, making us miserable right now. But giving us a chance to feel better, to enjoy higher well-being, higher later when we in fact reach or get closer to our aspirations. Becoming CEO, perhaps, starting a startup, becoming a full professor and so on. I think that what happens later on when you get to be like me in my 70s is that I let things slide. You know, that so and so, not only forgot to cite my earlier work, but pretty much repeated my earlier work. In earlier years I might have written a polite email saying, “You might be interested in this particular paper,” hoping that they are going to get the hint. I don’t do that anymore. Who cares, you know? As a good friend of mine says, “Ten years after you are gone, only your children will remember you.”

Benz: We also wanted to talk about the extent to which wealth confers well-being or doesn’t confer well-being. There was a famous study that pointed to happiness and life satisfaction leveling off at about $75,000 in income. But then another study found higher satisfaction and happiness as wealth increased. So, can you talk about how you make sense of those seemingly disparate findings about the connection between wealth and happiness and well-being?

Statman: So that famous study is by Danny Kahneman and Angus Deaton, both Nobel Prize winners. And what they found was that emotional well-being levels off at $75,000 a year of income. That is, people who earn less than that of course are more sad than people who earn more. But earning double of $75,000 still makes you sad and frustrated—that is, even people [who] earn more money are frustrated any day because a colleague got a raise, and they did not, or the kid misbehaves or whatever it is. But they found that evaluative well-being increases without limit with income. And so, earning $100,000 makes you enjoy higher evaluative well-being than earning $75,000 and $200,000 is more than $100,000. What psychologist Matthew Killingsworth found more recently is that even emotional well-being goes up beyond $75,000 a year, that experience well-being increases without limit. And what you found is that what Kahneman and Deaton asked people is to think about how they felt yesterday.

Well, how they felt yesterday might not be how they feel right now. And what he did was to ask people to keep an iPhone and he would ask them questions. They would come at random points and ask them, how do you feel right now? And that let him find that in fact people who earn more money enjoy higher-experienced well-being at higher income. And you can see why that is—people who earn more money simply do not have the pressures, the frustrations of people who earn less. But there is diminishing returns in the sense that an extra $100,000 on top of $1 million adds less to that well-being than $100,000 added to another $100,000. So, in other words, money matters. And anyone who tells you that is all about friendship, they just forget that friendship is a wonderful thing. But even with friendship, you need money. I was reading about millennials and Gen Z who are getting married, and people say, I would have loved to join in your wedding, but I just don’t have the $600 or more dollars that are required to travel and stay at a hotel and so on. So even for friendship, you need money.

Arnott: Another interesting thing related to that you write about in the book is how social capital works differently for people at different levels of wealth. So basically, the idea that less wealthy people need to rely on their social networks more for day-to-day life, for things like babysitting if something comes up or driving their kids to school versus people with more assets. Can you talk about that and how that works?

Statman: If you are, say, lower-middle class or working class or just poor, you need to go to the doctor. You don’t have a car. Uber is expensive for your budget. You might ask a friend, a neighbor, to drive you. That friend might reciprocate in the same way babysitting for you and so on. So, these are more tangible kinds of help. If you have more money, of course, you need to go to the doctor. Either you have a car, or you can order an Uber, but you still need friends, although that friendship can be broader and shallower. And so, for example, if you are an executive and you lost your job, well, you’ll have contacts with other people, perhaps classmates, say from college who are also executives in other companies. You can reach out and ask for advice and perhaps pointers to openings. If you have to send a kid to college and you want them to go to a particular kind of college, you probably know some academics who can advise you about this particular university or generally how to apply. And so, the friendships among the people who are well off tend to be broader, but shallower and shallow friendships can be, again, very, very useful. You don’t necessarily need a heart-to-heart talk with that old classmate to get a pointer to a new job or to a university or any of the other things that are more of a concern of people with higher levels of wealth.

Benz: One of my favorite sections in the book was the whole section about social comparisons, which you studied in depth, and you talk about how it’s human nature to compare outward shows of wealth and achievement with those of our friends and neighbors. But you also note that we tend to compare ourselves upward to people who have more than we have. Why is that?

Statman: I think that in terms of evolution, I’m just speculating, that God or evolution planted this desire to compare and to compare upward for good reason. And that is to motivate us to move higher. I surely remember points in my life where I said I would rather get out of this rat race; this does not make sense. And yet I say, well, Meir, that would be nice. But if you don’t do that, you are going to lag behind. So, get yourself together and get yourself moving. And so, you say, if this colleague moved up in a company or this colleague started a company or this colleague moved up from being an associate professor to full professor, well, get going and get yourself to do the same thing. And so, it is useful in a way to make yourself miserable right now by comparing yourself upward and realizing that you are lagging behind for the benefits later on of when you in fact reached that level that you were aspired to and enjoy the high well-being that comes with it.

And, we all say, don’t compare yourself to other people. It’s nice to say. It’s nice to even believe. But whenever somebody tells me that he or she does not compare themselves to other people, I say, I don’t say you are lying. I say, but you are really facing an illusion. We all do that. It is really a matter of calibrating it. I worked with a money manager as two scholars side by side. We wrote papers together. His wealth is measured in the billions. Mine is not measured in the billions. But I did really feel inferior to him, and I did not aspire to be a billionaire. I have a PhD. He has just an undergraduate degree. I’m a professor. He’s a money manager. We are in different circles, different social comparison groups. And so, he felt fine working with me, even though I have more academic degrees than he has. And I felt working with him, even though he has much more money, because we appreciated what each of us has brought to our joint work. And we all felt good about it.

Arnott: Another phenomenon you write about in the book is called Gluckschmerz, how seeing others succeed actually diminishes our own well-being.

Statman: There is a famous study about smiling among athletes who won medals in the Olympic Games. And it turns out that, of course, the winner of gold smiles broadly. And the winner of bronze also smiles broadly, but not the winner of silver. And that is because the winner of silver says, “God, if not for this fraction of a second, I would be standing there at the higher step and have a gold medal on me.” Or as the bronze one says, “Wow, there are so many good athletes who are not standing here with us. At least I am here on one of those steps.” And so, it is really this art of figuring out where you stand and how you can compare yourself and how you can in some way say enough, I have enough. Some people with billions still feel that they have not reached what they should have, which is another billion. Whereas some people with modest wealth feel I have enough. And I think that this ability to feel enough is something very precious. And I hope that we all have it. It is not sour grapes. It is not that I really wanted to be a billionaire and now I’m just a millionaire. It is really the sense of, hey, I’m doing fine. I have a family. I have a work that is of interest to me and so on. Counting your blessings, those things really are having good meaning and offer good advice.

Benz: I wanted to ask about how people can get themselves into financial trouble with some of these social comparisons because they’re spending perhaps on things that they can’t afford. Their really expensive car or too-big house and giant mortgage that comes with it. So can you talk about that—how people spend on these things in an effort to make themselves feel better in their peer group, but it ends up worsening their well-being. Can you talk about the paradoxical nature of that?

Statman: Some of those status symbols that say that we are above others or that we at least are keeping up with the Joneses are obvious. What car do you drive? What house do you live in? What is it that you’re wearing? What bag are you carrying? And so, some people in an attempt to elevate their social status, they would buy, say, a luxury car as a lease that is beyond their reasonable abilities. And then they get themselves in trouble when they cannot really meet the payments that come with it. And so, again, a lot of those status symbols are visible to other people. You can see my car, but you cannot see necessarily the furniture in my house unless you are close enough friend that you get invited to my house. And so, a lot of people really spend more on those visible status symbols. And, if you cannot afford them, then sooner or later, you’re going to have big trouble as people who, say, bought houses that were beyond their ability before that housing collapse in 2008 and 2009 and had to really default on it and leave those houses.

And this is not without cost. That is, they bought furniture for the house. They did many things that now they are losing because, they cannot really store that furniture and so on. And so, it is important to keep those things in perspective. And again, it’s hard. It really is hard when you see other people enjoying things and you want to be in their social circles, and you find it hard. One wrote to an advice columnist, and he said, I’m a journalist. I earn reasonable money, but my friends are bankers, and they think nothing of spending $200 on a meal and $500 on a bottle of wine. Well, that’s beyond me. How do I keep their friendship and still live within my budget? So you can see the kinds of dilemmas people have. And some people will stretch, whereas other people will say to their friends, “I’d love to join you for meals if you go to this fancy restaurant, or we can find other ways to socialize that do not require that kind of money.”

Arnott: In addition to overspending, you also talk about the problem of excessive self-control and underspending. And this issue of underspending seems to be especially prevalent among wealthier retirees who sometimes seem to have a hard time flipping the switch from savings mode to spending. Can you talk about what’s going on there?

Statman: Yes. And if you speak to advisors, first, you will hear them say that we need to save more. Then when you asked them about their clients, those elderly clients who have accumulated a lot of money, they will say, “I really am trying to persuade him or her to spend that money on themselves, their family, their community. It is so hard.” And so, the way we end up accumulating a good amount of money—I’m not talking about the people who have sudden wealth because their company went public—but people who earn money, perhaps as professors, perhaps as even teachers in high school, perhaps as doctors and lawyers. These are people like me, and I would venture to say, like the two of you and the people who are listening to us now—that is, we are conscientious people, which means that we think about the future, not just the present. And so, we are good at self-control. We are good at saving. This is how we manage to accumulate so much money. We/they find themselves in situations where there are, as I call them, accidental wealthy people, but those habits of moving money from income into savings and don’t dip into capital, these stay with them.

And it is really hard to change those habits to flip this switch as you call it. I wrote about it in an article in The Wall Street Journal and I got so many touching responses. One woman wrote, “Did Professor Statman know my husband?” Of course not. But she said, “He describes him to a T that is he was reared,” she said, “by parents who grew up in the Depression. They taught him to squeeze all pennies.” Now that he died, she finds that they have way more money than she expected. And she says, “I will have to work really, really hard to spend it all.” And so, she’s starting a fund for a son of a friend who is autistic and she’s traveling all over the world and so on. And so, it is really important for advisors and for us to ask ourselves, what brings you joy? For me, I can afford $300 dinners, but if I were at a restaurant offering these, I would be unable to stop imagining the chef standing in the kitchen and laughing at me and the others about how he manages to sell chopped liver on toast as paté and so on. So, I don’t do that.

That does not bring me joy. But I found that in long Transatlantic flights, coach is getting to be too cramped for me. Business class is very, very expensive. But I say, hey, Meir, you can afford it. It’s something that brings you joy. You’re not changing yourself and the kids—enjoy that. And so, figure out what is going to bring you joy. It might be a cruise around the world, fine. Or it might be just supporting your kids and grandkids, maybe an educational fund for your grandkids that will pay for college expenses, maybe contributions to charity, contributions to your university, contributions to the poor, whatever brings you joy. And it’s very hard. I know many people, adult children who would like and truly want their parents to spend more and they find great resistance. Some people have ingenious ways to do that. One told me that his mom really likes classical concerts and opera, but she buys the cheaper tickets. And so, he just buys her the better tickets. And he says, well, I’m going to have less as a bequeath, but that is perfectly fine with me because I have plenty and they have plenty.

Benz: Well, Meir, you’ve given us so much good food for thought today, so much true wisdom. Thank you so much for taking the time to be with us.

Statman: Well, I’m delighted to have this opportunity to be with two of you.

Arnott: Thank you so much. We really enjoyed talking to you.

Statman: Thanks again.

Benz: Thank you for joining us on The Long View. If you could, please take a moment to subscribe to and rate the podcast on Apple, Spotify, or wherever you get your podcasts.

You can follow me on social media @Christine_Benz on X, or at Christine Benz on LinkedIn.

Arnott: And at Amy Arnott on LinkedIn.

Benz: George Castady is our engineer for the podcast and Kari Greczek produces the show notes each week.

Finally, we’d love to get your feedback. If you have a comment or a guest idea, please email us at Until next time, thanks for joining us.

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