Jason Hull

How Monkey Brain Chatters in Your Ear
- or –
The Five Most Common Psychological
Biases That Affect Your Money
Jason Hull
Hull Financial Planning
http://www.hullfinancialplanning.com


We Think Winning With Money Has to
Do With This


How Many Times Have You Said This?
• “I just have to find the right answer…”
• “There has to be a shortcut…”
• “There’s someone out there with a secret that
I just don’t know about…”


If Education is the Answer, Then Why


…or…


…or…???


Personal Finance Isn’t Just About Math

• Math is immutable

• But behavior isn’t


My Story
• When I was a lieutenant in Germany, I’d put
$1,000 in a savings account and $300 in an IRA
every month (limits were lower back then)


My Story
• Then, I’d put $800 on the credit card…


My Story
• AND withdraw $500 from savings


My Story
What I told myself
• I’m a saver!
• I’m being
responsible!
• That credit card
debt isn’t bad.
• It’s OK to spend
some because
you’re saving.

The truth was
• I was racking up
debt
• I was putting
money in savings
while carrying a
credit card
balance


What Caused This?


Who is Monkey Brain?
• It’s your limbic system


What Does Monkey Brain Love?


A Little Story
• 25 year old couple


A Little Story
• Earns median family income: $51,017
• Will work for 40 years and retire
• Assuming
– 7.5% annual return
– 3% inflation with employer match of 50% up to 6%
in 401k contribution
– $4k/month in Social Security @ age 66

• Needs to save 12.16% annually
• What could go wrong?

Anchoring Bias
• Employer says
“We’ll match 401k contributions up to 3%!”
- instead of “We’ll match 50% 401k contributions up to 6%”

• 3% reduction in savings because of anchor 
19.8% retirement target shortfall

Status Quo Bias
• Many investors never change their equity
allocation as they age


Dunning-Kruger Effect
• When we think
we’re better
than everyone
else, we try to
time the
market
• Loss aversion:
we’ll risk more
to get back to
breakeven

Hedonic Adaptation
• Allowing lifestyle rather than savings to
expand


Hyperbolic Discounting
• We treat our future selves as strangers and
discount future pain and pleasure

(1) http://blogs.marketwatch.com/encore/2013/06/05/more-retire-with-mortgages-credit-card-debt/
(2) http://money.usnews.com/money/retirement/articles/2013/05/13/the-baby-boomer-retirement-crunch-begins


Bonus Trait of Monkey Brain
• He wants to know who the people are in his
neighborhood
– This

– Is better than this

You make $50,000 per
year and your
neighbors make
$40,000 per year

You make $60,000 per
year and your
neighbors make
$70,000 per year


What’s the One Asset You Have
That Can Never Grow?

www.hullfinancialplanning.com

It’s Not This


It’s This


The Winning With Money Course
Lesson 1: Answering the
Question Why
Lesson 2: Monkey Brain’s
Common Weapons
Lesson 3: Money Comes
and Money Goes
Lesson 4: Cracking the
Whip on Your Money
Lesson 5: Christmas
Comes Once a Year
Lesson 6: A Contract on
Your Life
Lesson 7: What if You
Can’t Work (and Not Just
From Lack of Coffee)?
Lesson 8: Don’t Pay an
Arm and a Leg to Keep
Your Arm and Leg

Lesson 9: Long Term Care Lesson 16: Making Your
Insurance
House Your Home and Not
Lesson 10: Investing
a Money Pit
Doesn’t Mean Playing
Lesson 17: Papers, please!
the Markets
The important documents
Lesson 11: An IRA Isn’t
in your life
an Account
Lesson 18: Getting People
Lesson 12: Retirement – Who Live in Houses to Pay
Paying for Knee-High
You
Socks and Hammocks
Lesson 19: Starting Your
Lesson 13: How Much
Own Gig and Managing
Should I Be Saving?
the Band
Lesson 14: Social Security Lesson 20: Tying It All
– Neither Social nor
Together
Secure, But It’s Something
Lesson 15: Kids – Raising
Them, Feeding Them, and
Educating Them

The Winning With Money Course
Worksheets
Lesson 4: Measuring how well you stick to your budget
Lesson 10: How often you should invest
Lesson 12: Calculating your retirement expenses and
your “target number”
Lesson 13: How much to save each month
Lesson 14: Social Security contributions and taxes
Lesson 15: How much will your children cost you
Lesson 15: How much to save for the kids’ college
education
Lesson 18: Calculating the profitability of potential
rental properties

Winning With Money Course
Two Options


But Wait! There’s More!


A Coupon Just for FINCON Attendees
• $100 off of either option
• Good through October 20, 2013
• MUST use this link:

http://bit.ly/1515Moy


Not Ready Yet?
• Subscribe to my 52 week Financial Game Plan
• At the end of the course, you’ll receive
another coupon for $100 off good for 30 days
• You will also receive a free e-book “Four
Places Your Monkey Brain Should Never Live”
http://www.hullfinancialplanning.com/fourplaces-your-monkey-brain-should-never-live/

Disclaimers
• THE INFORMATION PROVIDED IN THIS PRESENTATION
SHOULD NOT BE CONSIDERED INVESTMENT ADVICE OR A
RECOMMENDATION TO PURCHASE, HOLD OR SELL ANY
SECURITIES
• You may not receive returns explained in this presentation
– Returns projected using a proprietary Monte Carlo simulation
based on historical S&P 500 and U.S. 10 year Treasury bonds

• Certain statements in this Web Site may constitute
"forward-looking" statements that involve known and
unknown risks, uncertainties and other factors that may
cause the actual returns and values of the Notes to be
materially different from any future returns or values
expressed or implied by such forward-looking statements.

Thanks!

www.hullfinancialplanning.com

How to Reach Me
• http://www.hullfinancialplanning.com
• jhull@hullfinancialplanning.com
• (817)476-0584


Jason Hull

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