How to Use Your Financial Fears to Build Wealth Better

Mindy:
Welcome to the BiggerPockets Money Podcast, where we interview Farnoosh Torabi and talk about a healthy state of panic and what that means for your relationship with money. Hello, hello, hello, my name is Mindy Jensen. And with me, as always, is my never panicked, always sure co-host, Scott Trench.

Scott:
Great to be here with my cool, calm, and collected co-host, Mindy Jensen, except for when she’s discussing cryptocurrency.

Mindy:
Nobody has ever called me cool, Scott. Thanks. My children would disagree. Scott and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting.

Scott:
That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business, or confront the fears you have around personal finance, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.

Mindy:
Scott, I am so excited to talk to Farnoosh Torabi today because she is one of the most prominent financial people in our space. I always love talking to Farnoosh. She’s got a podcast, she’s written, I don’t know, a bajillion books, and she’s just such a intelligent, well-spoken source of information. I love hearing from her every time we chat.

Scott:
Yeah. She’s a master at this and she’s really got a new great angle that I think she’s really onto something here with how fear informs personal finance decisions. We’re going to talk today about how personal finance is 80% behavior and 20% math. And we spend a lot of time on math on this show, but perhaps not enough time on the emotions around money that really drive decision making in this space.

Mindy:
Yeah, this is a great episode today. Before we get to it, though, Scott, we have a new segment at the Money Show called The Money Moment? Where we share a money hack tip or trick to help you on your financial journey. And today’s money moment is about tax time. And I know it isn’t tax time right now. However, if tax day is a stressful time for you and you tend to owe money on April 15th, make a tax account. Automate a portion of your income into that account so you’re prepared for the expense come April. Remember, your tax payment is due on April 15th, regardless of if you get an extension or not. Why freak out about it? Start saving now if this is something that always comes up.

Scott:
Love it. I have a personal checking, a personal savings, and a tax estimation account. And I pay quarterly taxes. If you owe an April 15th, you should also talk to your CPA about whether you owe quarterly taxes or should consider starting to pay those. And then, yeah, you just set it aside in that account every time. Right now, they’re earning 4% to 5% interest. It’s great. It’s a savings account. And yeah, it takes away all that uncertainty. If you overestimate, you can always just put it right back into your checking account when you get your tax return or you finalize your returns at the end of the year.

Mindy:
Do you have a money tip for us? Email [email protected]. Farnoosh Torabi is one of America’s leading personal finance experts. She’s the host of the award-winning podcast, So Money, and has earned over 30 million downloads. She is also a sought after speaker and author. She has a new book out titled A Healthy State of Panic. Farnoosh, welcome to the BiggerPockets Money Podcast. I’m so excited to talk to you today.

Farnoosh:
I’m so excited. Thank you bot, Mindy, Scott. And I’m such a fan. I feel like you two are the OGs of personal finance and personal finance podcasts, so it’s really an honor to be here to share the book with you and your audience.

Mindy:
Well, thank you for joining us. For the two people on the planet who haven’t listened to your podcast or read one of your books, can you tell us a little bit about yourself and how you became interested in the financial space?

Farnoosh:
Yes, happy to. I’ve been working in personal finance for over 20 years, believe it or not. I think I was like 19 my first internship with Money magazine fact-checking articles about 401(k)s and reverse mortgages and all the glorious, dreamy stuff you think about when you’re 19, all the things you want to do.
And so it’s been the rest is history. Since that opportunity, I recognize that I had a real curiosity about money and personal finance and more importantly, helping people. I’ve always been that kid who if you ask me when I was like eight years old, “What do you want to do?” It’s like, “I want to be a doctor or a waitress.” And the through line was always like I wanted to be in service, I wanted to be helping people. I’m not smart enough to be a doctor, but I did discover a passion for money.
And then from there, it just evolved into a multi-platform business where I was not just writing about money but suddenly also giving keynotes and going on television and hosting shows; and then of course the podcast came years later. But if we go even further back in time, I think the origins of my personal finance career were in childhood when I was the daughter of Iranian immigrants who came here to pursue, like a lot of immigrants, that American dream. And as Middle Easterners, I think money culturally was not taboo in our family, where I think for a lot of my neighbors and friends, and even to this day, money is very much a topic that we do not like to talk about. But we talked about it, the good and the bad. And I think I had an early lesson in how to be fluent in money and how to talk about it without feeling bad. And I have to give credit to that experience. I think that was instrumental in getting me to where I am today.

Scott:
Your new book is titled A Healthy State of Panic. Can you tell us why you chose that title and a little bit about the book?

Farnoosh:
Yeah.

Scott:
And what we’re trying to do with the whole fear can make us more productive concept here?

Farnoosh:
This is my fourth book. I’ve written many personal finance books. My last one was about how to be a female breadwinner in a hetero marriage. Before that, it was about money mindset, and before that it was just the basics of navigating your personal finances as a young adult, something that I was dealing with at the time of writing that book. This time, I wanted to write a book that was more deeply personal that looked at the emotional underpinning of so many of our financial questions, which I’ve discovered is fear. Whether someone is asking me about whether or not to buy a home or rent, invest or not, afford X, Y, or Z, leave the job, start the business, ask for more, there’s always a hint of fear, and I wanted to explore that.
And the book is not just a money book, the book looks at all sorts of high stakes decisions that we make, not just in our financial lives, but also in our careers, in our friendships, in our relationships. But fear is really the overarching theme of the book, and it started with my career in finance because, as I said, money is something that often when we are confused by it or not sure about a decision related to money that there is a level of fear there. And so as I say, I’ve been working in personal finance, but I’ve also been working professionally with fear for the past 20, 25 years.
I also wanted to write a book that was deeply personal. I’ve asked so many guests on my podcast about their personal lives and had them connect dots for us on the show as far as the lessons or the impacts, the influences of their upbringing in their current life today, in their financial lives, in their professional lives. And I thought, I think I’d like to open up a little bit more about myself and how I got to be who I am, which is also someone who is terrified. I’m afraid. I’ve always been. I’ve never neglected my fears, I’ve never discounted them, I’ve never thought that I was weak for being afraid, at least not in my adult life; maybe as a kid. I was ridiculed for it. I was called [foreign language], which is Farsi for fearful one. I was the poster kid for fear.
But fast forward, I’ve recognized even in my own life that fear has been a real tool for me. And so in writing this book, I wanted to share those stories, but not just mine, but so many people who have maybe even unknowingly shared that with me on the podcast, that the reason they were able to start the business or leave the job or invest in real estate is because they listened to their fears as opposed to, again, looked at fear as a weakness.
In our culture, we tend to associate fearlessness with courage and bravery, and I want us to imagine a world where we can be fearful and fulfilled, we can be scared and smart. I think that those two things can coexist. And we all have fear. Fear is abundant. It’s a natural resource that’s running through our veins, so let’s learn how to leverage it and have a healthier relationship with it. And that’s really where the book begins is talking about how to use fear as something that can help you in your life, in your financial life, in your career and elsewhere as opposed to when fear shows up to assume that you are incapable, that it is going to get in the way, and that it will dead end.

Scott:
Can we dive in there a little bit and go one level deeper on this concept of healthy fear? What, in your opinion, is an example… Because in many cases in my life I’ve been afraid of something, I haven’t dealt with it. It builds and builds and builds and builds, and eventually have to confront it and it becomes a bigger problem in there. That seems like an unhealthy way to deal with fear, for example. What are some unhealthy ways to deal with fear before we get into the healthy state of panic concept that you’re bringing up here?

Farnoosh:
I think that in hearing even you talk about it, Scott, and describing a fear is unhealthy, I listen to that and I go, well, that’s Scott ignoring the fear or wanting to not face it. And that is actually the framework that I’m trying to get people to embrace is that when fear shows up, it’s just fear, it’s just a stimulant. How we engage with it, how we choose to have a relationship with it is what then determines if this is going to be something that’s going to help us or that is going to really get in the way. Because what I’ve recognized is that in my life when I’ve tried to ignore fear or brush it off, it doesn’t go away, it sometimes only compounds. And that’s when you get to a point of maybe having incredible anxiety. And that’s not healthy, and we don’t want that.
But I find that when we are more patient with our fears… And in the book I walk us through nine different fears, the ones that I feel like are the juggernauts in our lives that everybody has encountered and maybe even still feels on some days, whether that’s the fear of loneliness, the fear of rejection, the fear of failure. There’s obviously the fear of money at the centerpiece of the book. And then we get into things like the fear of uncertainty, which who hasn’t experienced that? As well as endings and the fear of losing your freedom. And I picked those fears specifically because I do think that those fears not only run rampant, but I think they have the ability to help us if we use a very simple framework of being patient with those fears, asking the fears questions. When we turn and face our fears, what we’re really doing is we’re turning and facing ourselves.
When fear shows up, it has important messages to impart. It wants us to identify what’s important to us, what we’re trying to protect. And even if we decide, look, I’m not going to do the thing. I’ve done the risk calculus and I still don’t want to do the thing, that’s fine, but I feel like just giving yourself the opportunity to understand what that fear is pointing out about you in your life, in your relationships, perhaps, in your experiences that have led up to this point, I feel like it’s an experience that we can’t afford not to go through in life. And so often in our culture, we’re told the opposite. And I finally want to just give fear a rebrand because we owe it to ourselves. When fear shows up, it’s an opportunity to learn more about yourself. And that in and of itself is, for me, a great takeaway.

Scott:
You mentioned earlier that you weren’t a doctor, but I’m going to ask you a question along those veins right now. I found that in the past, one of the hard parts for me has been diagnosing the fear. What is it? What am I afraid of? And just when I state something to the effect of, “I am afraid of this outcome transpiring from these things,” all of a sudden it just makes it a much more practical approach. How do you diagnose a fear?

Farnoosh:
And like I said, I have nine different shades of it in the book. There are distinctions. When, for example, you’re fearing uncertainty, it’s because you’re fearing losing control over a situation. You’re fearing not being able to manage an outcome the way that you want or the way that you hope. I felt that way when I got laid off in 2009. I still feel that way some days. I’m a parent. How can I not? I have a lot of fear of uncertainty. There’s the fear of failure, which shows up often as a fear of not measuring up to your definition of success, whatever that is. Or fearing failure, which is also the fear of disappointing yourselves, others, the expectations people have of you.
I think that what we often don’t do in our culture is identify these distinct flavors of fear. I think that when we can get really specific and name the fear, then we can know what to do with it. As I say, sometimes when we are experiencing fear of failure, the wisdom in that fear is different than the wisdom in, say, the fear of money or the fear of uncertainty or the fear of loneliness. The wisdom in the fear of failure is that it’s trying to nudge you towards maybe rewriting your definition of success because you’re setting yourself up for failure and you don’t even know it. Or maybe the fear of failure is showing up because you’re sensing that, hey, I’m not in an environment that will actually support me. And then that will give you a sense of where to move next. And maybe it’s to move out and on.
And look, fear is an opportunity, as I say, to learn what your next step should be. But the first thing you want to do is figure out what is the actual fear that I’m feeling? And the book walks us through some of those experiences that I’ve had, that others have had. It’s sometimes a good shortcut to figuring out what that fear is is to extrapolate and envision what it is that you’re seeing. What is the future that you’re seeing that you’re afraid of? The feeling that you’re left with, that is the fear.
Sometimes we’re not fearing the right things, though. And what by that is sometimes, like with money, sometimes our fears are just living in the abstract. I’ve experienced it or you’ve seen others experience the fear of things like recessions and a stock market crash or a bank failure, as we saw earlier this year. And those are not invalid fears; they’ve happened, so we have some history to point to. But I think that the better fear is to take those abstract financial fears and really make them more granular and personal to ourselves and our families and our households. If you’re fearing a recession, I get it, but what is it exactly about a potential recession that really scares you? And for a lot of us, it’s losing our jobs. Then the next step is take the fear to the edge. Imagine you actually lose your job, not just someday, but if it happens tomorrow, what would be the first one, two, three things you would do? And maybe now you can get a headstart on that so that in the event that that happens, you’re not approaching it without any sense of what to do. And you can approach that with a little bit more calm.
Especially in our financial lives, I feel like when fear shows up, it’s really asking us to go to the dark place, which I say may sound like I’m really a masochist, but I’m just saying you got to live the fear. You got to take it to the edge. And why that is is so that you can be catalyzed to do something about it, because if you’re just worried about these hypotheticals, well, you’re just going to spiral, you’re just going to keep chasing your tail.

Mindy:
I really like this. What is that phrase of failing to prepare is preparing to fail. Right now, while you still have your job but you have this fear of a recession, work through it. I love that advice. What is the worst that happens? I lose my job tomorrow, and then I don’t have any money. Well, okay, but I have an emergency fund. Or I don’t have an emergency fund, so when tomorrow comes and I don’t lose my job, I should start making plans to have an emergency fund so that if I lose my job, it’s not the catastrophic thing.
Okay, I lose my job, but I have an emergency fund. What else? Ooh, maybe it’ll take me a while to get a new job. Okay, start brushing up on your skills now. Start preparing your resume now. My dad and mom were both in hiring for a long time, and they were always harping on me, “The best time to look for a job is when you have a job.” If you feel like your job is really unstable, start looking for something else.
But also explore your fear. Why do you fear a recession? Because it’s blasted all over the news? Well, they keep saying it. I saw something yesterday, he who shall remain nameless has predicted 23 of the last two recessions successfully, Robert Kiyosaki. And there are people who continually predict something bad is going to happen. And you know what? They make news because Farnoosh Torabi says everything’s okay isn’t an exciting headline. That’s not what gets clicked on, that’s not what sells newspapers.

Farnoosh:
Exactly. It’s how I opened the book. I said, “We have so much fear in our culture.” If we were all living by Malcolm Gladwell’s 10,000 hour rule, which we know is if you accomplish anything 10,000 hours, you’re an expert, we are fear experts because we’ve experienced fear no fewer than 10,000 hours in our lives because of the media, because fear is profitable. To your point, fear drives headlines. It drives consumers to make impulse purchases.
When it comes to the fear of money, I often say that the first step should be to identify the source of that fear and ask your fear, “Who brought you here? Where did you come from?” Because sometimes your job as an adult with agency is to get to the bottom of that fear. And maybe you’ll discover that it is not actually a fear, but it is a fallacy.
I’m not here to say that all fears deserve celebrating or that all fears can help us, I’m just saying let’s hang out with this fear because along that journey of figuring out where this fear came from, guess what. You are going to realize so much about yourself and who you’re surrounding yourself with and all the narratives that you may have been telling yourself that you’re now realizing haven’t been serving you. And that’s where fear is helpful. It’s not that it’s giving you maybe even a next step, but it’s giving you a lot of context and information, which is also very helpful in life.

Scott:
We’ve trickled through to three actions here. Diagnosing the fear, labeling it, making sure that you understand it, understanding that fear can be healthy in a lot of situations and can be a signal that we should tune into, and then this third concept of… How did you put it? Going into that next level deeper. Where is it coming from? What’s next? How do I continue to harness this fear and put it to productive, actionable use in my journey with money, for example?

Farnoosh:
Well, I think it’s just recognizing what you can do every day. Fear is abundant, as I said. It shows up all the time. And for you just to have an appreciation of it as opposed to a hatred for it, that’s really the work is that’s the first step. That’s something that we can all start doing and can do conditionally to invite fear into your life in a way that you never have, which is to say, “Look, it’s here. I’m not a bad person. I’m not a weak person for experiencing it. Fear is just as important as it is to feel gratitude and happiness.” I know that may sound startling to some people, but look, you can also have an over amount… You can drown yourself in happiness sometimes just like fear can be unhelpful. I think that both can live in your life in balance.
And when fear shows up in your financial life, your job is to acknowledge that maybe it has something to teach you about who you are and what you want to protect and what your goals are. There are many stories in that chapter about how people have used fear to save aggressively, invest, to pick up their lives, pick up the pieces in their lives after literally being robbed of every penny. And specifically, I’m talking about one person who was robbed by Bernie Madoff and was left with just the house that she lives in and nothing else. Her entire life savings and her husband’s life savings disappeared.

Scott:
For those who have been living under a finance rock, Bernie Madoff was convicted of one of the largest Ponzi schemes in history, I think the largest Ponzi scheme in history, and stole billions of millions of dollars from investors who trusted him.

Farnoosh:
And she found that her fear of money, her fear of essentially going broke again and never being able to carry on led her to realize that she did actually have a lot left, which wasn’t money, of course, but there were resources that she had such as her education, her skills, she was a writer, her network. She had a house, so there’s that. And it led her to realize all the things that she was grateful for in her life that she then leveraged too to move on and up. She used her skills as a writer to tell her story, which then turned into a book, which then brought in money.
And so even in the depths of our financial fears and despair, there is opportunity, it’s a matter of figuring out what is it that this fear wants me to protect? And in that moment, I think her fear of money wanted her to protect her livelihood, her financial livelihood, but also her sanity. Because sometimes when we are just so buried deep in our concerns about money, it’s really hard to feel like you can get up and out. And in order for her to do that, she had to recognize that the definition of money is not just money in the bank, it’s not just dollars and cents, that wealth, that riches, that fortune is in your relationships, it’s in your life experiences, it’s in your spirit of can-do-itness.
And listen, she grieved. She allowed herself a lot of time to go through those important motions of being angry and sad and despondent and unhappy, but ultimately she realized that there were important things that Bernie Madoff had not taken from her, and that is what helped her move through that fear and onto the other side. The goal is not to always be afraid, the goal is not to attract fear, but it’s rather to appreciate it when it shows up, that maybe there is some wisdom here to take you to the next page in your life.

Scott:
And this is a great story about how to confront fear and use it to overcome loss. I’d love to ask you on the other side of that, how do I use fear healthily to prevent loss in the first place? What’s an approach that I can use to that effect?

Farnoosh:
Well, loss can mean different things. I know a lot of people who are afraid of investing for the risks of loss there. There are people that are just afraid of maybe mismanaging their money for the fear of loss there. And I think that it really comes down to a few things, asking yourself this first: What am I more afraid of, the loss? Or there is a fear that you may not be considering, which is that… For example, let’s take investing. Let’s get really tactile here. If you’re afraid of investing because it may mean losing money at some point, maybe even for streaks, days, months, years, depending on the direction of the economy and the market, we know that historically the market outperforms money in a savings account over decades that in an S and P 500, diversified, invested for 25 years, you’re going to end up historically with more money than you would in, let’s say, just a savings account.
If we believe this and we believe that this will repeat, then not investing today, while that may feel like it’s allaying your fears, that may feel like you’re addressing your fears and you’re doing the safe thing, there is something scarier awaiting you potentially in 20 years, in 25 years when you arrive at a point in your hopeful retirement and you actually don’t have the money to retire; that’s a much scarier thing. And so sometimes the exercise when people have a fear of something today, a loss today with their money, and then as a result thinking that the answer is to not take the action, to not invest, to not pay down my debt, to not have the conversation about money with my partner because that’s going to lead to a fight, and then I know what happens next, I think that the thing we often should remember is the scarier thing potentially waiting for us at the other side of that response today, that knee jerk response today, which we typically have with fear; we’re typically very quick to react. And I think that that is where we get catalyzed to go back and do the right thing.

Scott:
Yeah, there should be a fear. Sure, you should be afraid of investing. You can lose money. The market can go down. Somebody can rip you off. And you should harness that fear to be educated about exactly what you’re investing in and the prospects to manage and minimize risk around that and maximize long-term performance. But you should also, to your point, be afraid of two things. One, not investing and the consequences of that in later life and not realizing your potential in the nearer term with these. I think that all of those fears can help work together to a productive outcome in combination, potentially.

Mindy:
Scott, you used the E word, education. I think education is a really great antidote to fear. If you don’t know something, that makes it very scary. I don’t know anything about investing, therefore it’s scary to me. And Farnoosh, you just said, we know the market outperforms money in a savings account historically, so if we believe this, well, yeah, I believe this because I’ve seen it. Past performance is not indicative of future gains. However, I have seen the past performance and the market goes up. If you zoom way out, the market always goes up. When you zoom in, you can find lots of evidence of it going down.
But there are people who don’t believe this. And the reason they don’t believe it is because they haven’t looked at it, they haven’t done any studying, they heard from their uncle who invested in Enron that one time right before it went to zero or they invested in that one stock that one time and didn’t do any research and then it went to nothing or they lost their life savings. And they’re like, “Oh, the stock market’s not for me.” Educate yourself. There are lots of I don’t want to say easy ways to make money in the stock market, but there are a lot of consistent ways to make money in the stock market that doesn’t require education. But also a little bit of education can go a really long way towards fattening your wallet.

Farnoosh:
I agree. And could it just be that when the fear of something like investing or anything that you may not be familiar with pops up, maybe the next best healthy move is to get educated? And that is where the fear is trying to direct you.

Mindy:
Yeah. There’s also a lot of safety in not educating yourself because then you stay in your little comfort bubble and you don’t have to do anything scary like invest in the stock market and maybe watch your stock portfolio go down a little bit before it goes back up again.

Farnoosh:
I think that’s the expression, ignorance is bliss.

Mindy:
Ignorance is not bliss. Ignorance will make you very unhappy in the long run.

Scott:
I think it’s just such a great concept here that we’ve been discussing here. I think it really pertains to our world in BiggerPockets where I think that a lot of real estate investors, perhaps most, come into it with a healthy amount of fear. But there is a cohort out there that’s lacking that healthy amount of fear, and that creates huge risks. Again, fear, the whole point of what we’re talking about here, is it’s healthy in a certain degree. It should be telling you something. You should listen to it and you should confront it or act on it or educate yourself to mitigate or manage it.

Farnoosh:
And I think that you can be fearless, and that is something that we should all aspire to, but to be honest, the journey to getting there involves reconciling with your fears, unpacking them. Anyone who says that they just went from zero to fearlessness is not being honest with themselves, and I think it’s because we’ve been fed this really tragic narrative around fear. We do believe that if we admit to having fear that we are admitting weakness, that we are the opposite of courageous. And just go and look for any book title with the word fear in it, and it’s… The promises are fearlessness is going to solve all your life’s problems.
But I think that for me, I’ve never been able to be completely fearless in my life. If I have done things that seem fearless to people, it’s actually because I have a very good relationship with fear, actually. I’ve been able to lock arms with it and go do the thing anyway. And I think that being fearless truly all the time is a promise land most of us won’t ever reach. And that’s okay because I feel like when you are able to reconcile with your fears and face your fears, there’s an emotional intelligence there that… Most respect for. And it is a real privilege to be able to walk through this lifetime without fearing any risks. Who can do that? I can name a few guys, but otherwise we’re all just fending for ourselves here.
And I’m the daughter of immigrants. I know this very well. Fear, and I go way back. I watched my parents grapple with it and experience it. I, myself, I talk about the humor in that growing up when you’re told you can’t do anything, that to live a safe life, just live at home; don’t go anywhere. Don’t go on the sleepover, don’t have a boyfriend, don’t… Seriously, it was just like stay home, get a college degree and then get married, and then you can date when you’re married. Just very sensible advice as a parent.
Ultimately, it was a path that worked out. And that was where I started the book, which was like my mother and father didn’t let me do anything. They really raised me through this prism of fear. And while I hated it growing up, it gave me, again, a real intimate close up relationship with fear as a kid that, as an adult, I had to befriend it because it wasn’t going to go away. It was like a lost puppy. It just kept following me everywhere. And everything worked out, I suppose, at least that’s according to my mom, and you can too.

Mindy:
I think that’s great advice. Befriend the fear and embrace the fear and use it to your advantage.

Farnoosh:
Keep your enemies closer? I don’t know.

Mindy:
Yeah. Well, it’s going to be there. There are going to be things in life that scare you. Like you said, you can’t think of anybody, maybe one or two people, that have no fear at all. Otherwise, it’s a healthy part of life. Let’s switch gears and talk about gratitude. In your chapter about money, you speak about gratitude. How does gratitude play a role in your perspective on money?

Farnoosh:
Well, it’s important to realize that money is just a tool. And if you have a fear of money, then maybe it’s really your relationship with money that is sourcing a lot of this fear. And sometimes the relationship with money is such that we just give it too much power in our lives. We give dollars and bills and bank account balances way too much power in our lives. We think that it’s what it means… That to be rich, it means to be actually physically rich dollars and cents wise, and that we’ve heard self-worth equals net worth.
And I think that that is a narrative that I really encourage people, as they read the book, to sit with if they feel this, to really think about how can I rewrite this to have it be more empowering? And the more you think about self-worth equaling net worth, the further away you get to the ability to really practice gratitude and feel grateful in your life because if all you’re hoping for is a certain level of money in your net worth calculator to feel like you’ve, quote, unquote, “made it” or feel like you’ve, quote, unquote, “become successful” and that you’re worthy of things and you’re worthy of joy and experiences in life, then I worry for you.
And I think it’s important to disassociate those things. It’s important that when we fear money, we… And that’s a very abstract thing sometimes even to say that you fear money. What is it actually that you’re afraid of within the world of finance? And we’ve gone through some many, many examples. But like my friend who lost everything via Bernie Madoff, for her fear of never being able to get back on her feet, literally, financially… Can you imagine in your 60s losing everything? It led her to really being grateful for what remained.
Sometimes when we are fearing money or fearing a lack of money, we are just focusing too much on what we don’t have and what maybe we should reframe and pivot to is what we still have, what we do have, which isn’t maybe money in the bank but is very rich and resourceful: Again, your health, your relationships, your life experiences that can inform you and guide you into your next chapter in life, your intuition. And I do think even for me, I’m a person who’s very much like a roll up my sleeves will just do it. And I don’t care that I have a master’s in whatever, no job is beneath me. I will do whatever it takes to do whatever it takes. And that I know is something that in the end will help me in life, and I’m very grateful for that.

Scott:
Love it. Well, thank you so much for sharing all of this wisdom. I think it’s a great topic that really doesn’t get enough attention here. Money, personal finance is 80% behavior and 20% math. And fear is such a major driver of that behavior. And I don’t think we’ve ever attacked the issue head on and really thought about let’s diagnose it, let’s figure out where it’s coming from, and then let’s set about a practical approach to addressing it.
And I love the component of gratitude. I think that that exercise on its own does a lot to quell fear and control it and contextualize it to help it make it even more actionable. Thank you so much for sharing all of these thoughts. I think it’s a really powerful lesson, and I hope folks take it to heart.

Farnoosh:
Thank you so much for this opportunity.

Scott:
Absolutely. Where can people find out more about you? And where can they get A Healthy State of Panic?

Farnoosh:
You can learn more about the book and where to get it at ahealthystateofpanic.com. And you can catch me on So Money the podcast three days a week wherever you’d like to listen to podcasts. And you can hang out with me on Instagram, which is where I’ve identified as my favorite of all the social platforms. I’ve tried TikTok; it’s not working. Please send your condolences. I love hanging out on Instagram @farnooshtorabi. And I respond to DMs there, so would love to hear from you.

Mindy:
Awesome. Thank you so much, Farnoosh. It’s always lovely to talk to you.

Farnoosh:
Thank you.

Mindy:
All right, Scott, that was Farnoosh. That was a new topic for us; the fears around life in general and specifically about money. I’m going to put you on the spot, Scott. Do you have a money fear?

Scott:
Yeah, my biggest money fear… Well, I’ll give you two. When I was first starting on my journey, my biggest money fear was not achieving personal financial freedom and being stuck in a cubicle for 30 years not being able to realize or maximize my potential. That was my overarching fear that led me to take a pretty aggressive approach to personal finances.
I think today I’m really grappling with a fear around is optimization of my portfolio costing me more spendable liquidity in the near term than I otherwise might be able to achieve? Should I be just generating simple interest in cashflow and paying the tax man and being able to spend it? Or should I continue to be in these very tax-advantaged investments with my stock investments, 401(k), rental property portfolio? And so on and so forth. That’s a fear. I think there’s like a, what’s the best way to optimize this advantage that I’ve created for myself and had the opportunity and privilege and luck to achieve in a sizable personal financial position? How’s that for a convoluted fear?

Mindy:
I think it’s a matter what you are looking for. What are your goals? My money goals are going to be different than your money goals because I’m at a different place in my life. But my money goals now are just… My biggest fear of money is wasting it. I don’t know if you’ve ever heard me say this, Scott, 1,000 times in an hour and a half recently, but I don’t want to waste money. I don’t want to spend it on something that ultimately wasn’t a good use of that money. And what I have been learning is that experimenting with smaller amounts on new expenses is a great way to determine if this is, in fact, a waste or not.
And I hired a cleaning person. She came last Friday for the first time. And when she was done, she hadn’t even done the whole house because the first time, they need 27 hours if you’re me. But I was amazed at how good the house looked. And it was not a waste of money at all. I would’ve paid twice that, just don’t tell her. And it was so fantastic, she’s coming back this week to finish up the rest of it. And we’ve been trying to keep the house clean, but it was so easy to keep it clean once it was already clean, or half clean because it was a big mess. Yeah, fear of wasting. I don’t really have a fear of running out, but fear of wasting what I’ve got and doing dumb things with it.

Scott:
I think we’ve known about that fear, and maybe, Mindy, a avenue to explore would be how do you develop an equally counterbalancing fear of wasting time? And balance those two off one another. Maybe that’s how you use a healthy amount of fear to help make even better decisions than the ones that you’ve made already.

Mindy:
Wow. When did you get so smart, Scott? Now I got to go dive into that thought.

Scott:
That’s the trade-off. I do want to leave everybody with one last thought here on fear. Again, just from a practical guiding point, I’ve found… And this is in the parenting book I’ve been reading, which I’ve been devouring lately now that we have a little one. But there’s a cool little concept that I’ve never really… that is so obvious to many parents out there, but it’s labeling your emotion, just stating it, even saying it out loud when you’re feeling a strong emotion. Once you label it, you can control it. Once you label your fear and actually just say it, “What am I fearing here? What do I assign the probabilities of those outcomes to?” That is the first step here. If you take nothing away from this episode, I think that just that one thing of labeling it and saying, “I’m afraid of this,” is so freeing to a certain point and allows you to begin the plan of attack to address that fear, even if it takes a long time. That’s just that one action piece that I would encourage people to walk away with is just label it.
And apparently, that’s also super healthy for kids. That’s what they teach in a lot of the parenting books is when your kid’s throwing a tantrum, you’re jealous or you’re angry or you’re hungry or whatever it is. Even from an early age, apparently that helps them control their emotions better. It certainly helped me. I immediately put it to use in my own life.

Mindy:
Love it, Scott. That’s awesome advice.

Scott:
All right. Well, should we get out of here?

Mindy:
We should, Scott. That wraps up this episode of the BiggerPockets Money Podcast. He’s Scott Trench and I am Mindy Jensen saying get out of the house, mouse.

Scott:
If you enjoyed today’s episode, please give us a five star review on Spotify or Apple. And if you’re looking for even more money content, feel free to visit our YouTube channel at youtube.com/biggerpocketsmoney.

Mindy:
BiggerPockets Money was created by Mindy Jensen and Scott Trench, produced by Kailyn Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.