In this episode, we talk about why sometimes people don’t make good choices with their money, how the things around us can affect the choices we make, and ways we can try to do things differently.
Did you know that adding a target to a urinal can help reduce the costs of cleaning the bathroom? It might sound strange, but it’s true! This is because people tend to aim better when they have something to aim at, and so there’s less mess to clean up.
In this episode, we’ll be talking about why people behave the way they do, and how this simple trick with a target can save money. We’ll also be looking at ways we can improve our own money habits, so that we can make the most of our finances. So, whether you’re interested in cleaning bathrooms or managing your money better, this episode is for you!
“Too few people save for retirement.” – G
00:14 – When they turn the lights off at the Las Vegas Strip.
01:35 – The brightest and darkest cities in the world.
01:45 – The entire electric bill of Las Vegas
01:57 – What makes the Las Vegas Half Marathon special.
02:59 – How to save bathroom cleaning costs.
05:40 – How to make people more likely to save.
08:15 – Why people don’t make wise financial decisions.
09:26 – How to change your behaviors.
Connect with Ben Jones:
MAK: Welcome back to Money with Mak & G. It’s great to be here.
GRANT: And thank you for being here with us.
MAK: This coming weekend dad’s taking off to go do a ½ marathon in the land of money, Las Vegas.
DAD: You got that right. I always thought it would be cool to be running down the Vegas strip at night. It’s been on my bucket list. Plus, it’s ALWAYS lit with those wonderful blinking lights and videos.
GRANT: Dad, you’re not exactly telling the whole truth, the strip isn’t always on. It’s been turned off and been dark for periods of time
DAD: What do you mean?
MAK: Well, you told us about some guys in the mouse pack or something.
GRANT: I don’t think it had anything to do with mice, not like Mickey Mouse. It was meaner like a rat.
MAK: That’s right. It was the “Rat Pack” and some guy named Frank Sinatra was a crazy famous singer, and he worked in Vegas. He had some crazy cool names like
GRANT: Chairman of the Board
MAK: Ol’ Blue Eyes
GRANT: The Voice
GRANT: The Big Guy
MAK: Definitely GREAT nicknames. They “dimmed” the lights back in 1998 when you were actually there.
DAD: Oh yeah, you’re absolutely right.
GRANT: Plus in 1999, the guy who created King Arthur’s Tournament at Excalibur died.
MAK: They did it for him and also did it for the prior President Ronald Reagan in 2004
MAK: Then, I read that in 2007 some guy named Robert Goulet died. Who received a “flash of lights”
GRANT: I also read, there were other times for the guys who made up the rest of the rat pack, like…
MAK: There was Sammy Davis in 1990. Dean Martin in 1995, 3 days after his death, and more.
GRANT: Funny side note is that it’s the brightest city you can see from space. That’s crazy huh?
MAK: Here’s a good one. Know what the darkest city is? It’s Pyongyang in North Korea.
GRANT: Wow, that’s saying something. I bet their electric bill in Vegas is pretty heavy…..
MAK: Yep, it’s estimated at $10 million per year. So, dad will be running at night through “neon daylight”.
DAD: Thanks. It’s pretty exciting stuff, and I think it will be fun with all the excitement surrounding the event. A concert, a party, the expo, and more. Plus the medal is pretty cool with the playing cards on it.
GRANT: You know you always say you’re exhausted when being out there, since everything is so big, it always gives you over what.. 8,000 steps a day. You’ll have to save your energy.
MAK: Yeah, and supposedly the Vegas strip is 16,000 steps, so you’re ½ marathon should be easy. Up and back should be over 30,000 steps, so I’m not sure you’ll even do the whole thing. You got this dad.
DAD: Thanks, I appreciate it. I think it will be fun, for sure. Plus I’ll be hanging with my friend.
MAK: Agree. You know with all that carpet, marble, wood, and hotel rooms, it always seemed like a ton of cleaning has to be going on there all the time.
DAD: There is. Plus, you have lots of people who drink adult beverages and need bathrooms. They’re everywhere.
MAK: That has to take an army of people to keep all that stuff clean.
DAD: It does. You see people everywhere picking up glasses, emptying ashtrays, picking up trash, and surprisingly things are pretty clean, even the bathrooms.
GRANT: I guess they want you to stay and keep gambling, so keeping things clean helps a lot. Do you remember the story you told us a couple of years ago that makes me think of bathrooms? Mak, do you remember?
MAK: I do. Dad talked about a stand-up urinal in Amsterdam while at the Schiphol airport.
DAD: I remember that. That was when I went to the bathroom and saw a fly sitting in the urinal near the urinal cake. I took aim and did my business.
MAK: Yea, but, it wasn’t a real one was it?
DAD: Nope, it was drawn into the porcelain with something sharp. They call that etching and they added a touch of color. I thought that was so strange and interesting how it changed my focus.
GRANT: Didn’t you do a little research after that? And, you found out some interesting stuff, right?
DAD: I did, but it’s a little messy and a tad disgusting. Can you handle it?
TOGETHER: OH YEAH WE CAN!
DAD: Ok, well you know when you were growing up Grant, and we had to train you to not make a mess AROUND the toilet. Do you remember what we did?
GRANT: Yep, it was Cheerios. You’d put one or two in the toilet and I had to try and hit it. Great practice. DAD: And, you needed it.
MAK: Haha. Not such a good shot, huh G?
GRANT: Hey, not funny. It’s not like you’re born with perfect aim and I was little.
DAD: Hate to say this, but men’s bathrooms, have a lot of spillage from ADULTS missing the urinal.
TOGETHER: EWWWW GROSS.
GRANT: I told you. Not born with perfect aim, and if you’re in a rush, not focused….
MAK: Ok, so why are you even telling us about this? Are you going to turn this into something about money?
DAD: You know everything can be turned into money. So, get this. That little fly reduced the “spillage” by 80%. Since all of us guys like to focus and shoot things, there’s a lot less mess.
GRANT: Ok, that’s beyond amazing. I would think the janitors would be super happy about that.
MAK: Those flies should be everywhere!!!
GRANT: Can’t help it, but I feel there is a joke in there about flies and zippers, but I’m not touching it.
DAD: It’s probably a good idea. So what do you think if janitors clean up less mess?
MAK: Takes less time and therefore less money.
DAD: Got that right. It actually reduces your janitorial budget by about 8% due to cutting spillage by 80%.
MAK: That’s nuts. Didn’t you say the Ft. Lauderdale-Hollywood airport spends around $12 million yearly on janitorial expenses? If they save 8% on that total, it’s around….
GRANT: $1 million BUCKS!! But, let’s say only 10% of that total is on bathrooms that’s still $100k.
MAK: Just for a fly? Seriously. That’s some costly pee. Our tickets should be cheaper because we make less mess.
DAD: That’s funny. But, you know what’s even more shocking about this whole thing? In 2017, a professor from Chicago Booth won a Nobel Prize for a theory related to peeing on these flies.
MAK: What? A Nobel prize? No way. I don’t believe it. How could that be possible>
DAD: He used this information as part of his study on behavioral economics.
GRANT: Ok, if I translate, isn’t behavioral economics about how people behave or make decisions about money?
DAD: It sure is. He wrote a book about it, called Nudge-Improving Decisions about Health, Wealth and Happiness
MAK: That sounds very similar to stuff we talking about. Isn’t a nudge like a gentler push.
DAD: The fly was a nudge that helped men and boys focus on peeing on the fly.
GRANT: Would another example be putting out fruit on the counter instead of Doritos or Pringles?
DAD: Excellent example. That is a nudge. It’s the idea of not telling someone “No you can’t do this or that”, and we don’t change anything about money. It just makes things easier to make the right decision.
MAK: Didn’t you say most people have a hard time making a decision if it’s too complicated or too hard? They can’t sit around and reflect and rationalize every decision. They choose something.
DAD: That’s absolutely right. When things are complicated, we’re a bit on auto-pilot and don’t take the time. So we have to be aware that some things need to be simple and presented easily.
GRANT: Is this the thing about people choosing what percent to put in their retirement? It sounds so complicated they don’t make a decision. So, a better Nudge is for the company to simply…..
MAK: Auto enroll their employees. The employee has to stop the deduction, which is very different from no auto-enrollment, where an employee has to decide and pick the amount to opt-in.
DAD: So, you make it simple, and set up all new employees to have 3% of their salary taken out instead of asking them what percentage they would like. By doing this 50% more people started saving.
GRANT: That’s great because too few people save for retirement.
DAD: What do you call that?
TOGETHER: A NUDGE!!
DAD: Yep, no money was used to encourage people to save. Nothing was forbidden, and people made a better decisions about their money. That’s a pretty cool theory.
MAK: This means they figured out a better way to encourage people through behavioral finance.
DAD: Wow, that’s exactly what it means. And, that was an excellent way to put it.
GRANT: Nice job Mak. Dad, you mentioned when things are complicated, people don’t make great decisions are there other reasons?
DAD: There are. Many people don’t connect things in their minds when the benefit or punishment isn’t immediate.
MAK: Is that kind of like giving Oreo a treat for good behavior?
DAD: It is. He’ll never do what you want if you get him to sit and roll over, and then in 20 minutes, you give him a treat. There’s no connection between those two things in his mind. In 20 minutes, he just thinks you’re being nice.
GRANT: Are you saying that people are the same way?
DAD: They sure are. Sometimes adults drink too much alcohol, but they will get a headache the next day. They know too many drinks lead to bad things, but it’s not immediate and is the NEXT day.
MAK: Is this similar to when you say “Don’t eat all that chocolate, or your teeth will fall out?”
DAD: Exactly, the connection between eating a chocolate bar today and teeth problems in 6 months isn’t enough RIGHT NOW for you to change. It’s the same with money.
GRANT: So, when you save today but don’t realize the benefit of a better retirement later the connection is delayed?
DAD: That’s exactly what it is. Getting the nudges along the way with help from others, thinking about the wonderful benefits of saving money, and internalizing that wonderful feeling helps.
MAK: So, it’s all about behaving better, and receiving the benefits.
DAD: It is, and one super cool online platform that helps you make a commitment and stick-k with it is called STICKK, which is S-T-I-C-K-K.com. It wants to change your behavior and uses money too.
GRANT: Is this the one where you make a contract with yourself and you bet on yourself to reach your goal?
MAK: It is Grant. But the cool part is that you’re encouraged to choose a charity that may support something you really don’t like if you lose.
GRANT: Some people don’t like Trump and others don’t like Biden. So, if you could bet money on yourself to reach your goal, and if you lose, the money goes to the campaign of the one you don’t like. That’s how it would work.
DAD: Yep and they have referees. You have to post your success in a journal. Your family and friends can help confirm if you’re reaching your goal, along with sending in pictures or texts to document your success.
MAK: So, it’s a contract commitment, with money on the line, and people hold you accountable. It’s a real nudge because if you win, you win and get your money back. Talk about behavioral finance.
DAD: Changing your behavior with a little finance. How cool. I love it. Just like putting a fly in a urinal nudges the right action and the janitors do less work, and people enjoy a better restroom experience
GRANT: Less smell, cleaner, and less slippery by 80%!
MAK: Did you really have to go there?
GRANT: No, but it was fun AND true!!
MAK: Thanks G, I think it’s time to say goodbye.
GRANT: Thanks for being here, and until next time.