Pissed Off Pays More

But do you want to be inflamed or informed?

I have a theory. It isn't scientific, and you're welcome to get mad about it. That would sort of prove it.

There are two ways to react when a fact shows up that doesn't fit what you believe. One is "Huh. I should learn more." The other is to get inflamed and pissed off.

I try to be a good observer. I try to talk less than I listen. Who knows how good I am at that. The people who know me are welcome to stay quiet.

You've seen the inflamed version. Bring up politics at a family dinner and count the seconds. Religion works too. Nobody at that table says "Interesting, what are you reading?" They say your name, slowly, the way you'd talk to a dog holding a shoe.

Here's what I think is going on. People latch onto a belief that feels like it defines them. It lines up with the group they feel they belong in. So when a fact doesn't line up with the belief, it doesn't land as information. It lands as an insult. A lie. To them, and to everybody on their team. This is bullshit.

And somebody is making a living off that reaction.

I can't see inside anybody's head at a news outlet, so I won't tell you what they intend. But researchers can count clicks. One team looked at more than 22,000 headline tests on a news site and found that each extra negative word in a headline raised the click rate by 2.3%. Another found that posts about the other political side get shared a lot more than posts about your own, and said this may be creating "perverse incentives for divisive content."

Attention is what gets sold to advertisers. So nobody has to be a villain for this to work. If inflamed pays and informed doesn't, you get more inflamed. It's the same reason the candy is at the checkout and not back by the vegetables.

And it isn't only politics and religion. It's money. It's investing. It's debt. Those are the ones where getting inflamed costs you real quality of life, because the bill shows up whether you won the argument or not.

Let me give you my favorite example. I like it because I get to be the one who starts the fire.

If I tell someone the evidence shows financial literacy classes for the masses don't really work, I get inflamed retorts. Fast. You'd think I had suggested cancelling recess.

I'm not making it up. In 2014 three researchers pulled together 168 papers covering 201 studies and found that programs meant to improve financial literacy explained 0.1% of the variation in what people actually did with their money. A tenth of one percent. They also found the lessons fade, and that even big programs with many hours of teaching had next to no effect on behavior 20 months or more later.

That fit what I saw. When I ran a debt counseling organization, I watched tens of thousands of clients who knew exactly what they were supposed to do financially and still couldn't do it. They didn't need a pamphlet. For most people, financial problems are not a knowledge problem. They are a psychology problem wearing a knowledge problem's clothing. Debt is just math wrapped in emotion. I wrote up the whole case here.

So that's my belief. I like it. It's comfortable. It has a nice study attached.

Now here's the part I'd rather skip.

In 2020 a different group of researchers looked at 76 randomized experiments with more than 160,000 people and concluded that financial education does work, on average. They called the effects meaningful, and at least three times as large as the earlier work found.

Well, damn it.

There it is. A fact that doesn't line up with my belief. It showed up like a parking ticket.

The inflamed move is easy. Go hunting for what's wrong with their study. Decide those researchers play for the other team. Type something in capital letters. Just be pissed off.

The informed move is slower and a hell of a lot less fun. Read it. Figure out what they measured that the first group didn't. Maybe a class right before a real decision works and a class in tenth grade doesn't. Maybe we're both a little right, which is the least satisfying ending there is.

I don't know yet. That's a sentence I'm trying to get more comfortable saying. It doesn't come naturally to a guy with a website.

Here's the difference as best I can tell. Inflamed feels great for about a minute. You get to be right. You get to be powerful. You get to be loud. You get to be with your people. Informed feels like homework. But winning an argument has never paid anybody's bills.

The person who won't look at an option because of how it would feel. The investor who won't sell because selling means admitting it. The guy who knows what he believes about debt and doesn't want it ruined by details. Same thing every time. The belief is doing the deciding, and the facts are waiting in the lobby.

Look, I'm not telling you what to believe. You do you. I'm telling you what I'm going to try, which is to notice the heat. When I feel it come up, that's my cue. Keep my mouth shut. Don't talk. Go read. Get informed.

I'll let you know how that second study turns out. If I come back and tell you I was wrong, be gentle. If I come back inflamed, you have my permission to say my name slowly.

— Steve