Wait. What is this guy talking about? Lizard brain… invasion…occupation? Well now that I got your attention let me explain why this is a personal financial blog.
First of all, each of us has a lizard brain that is actually called the amygdala. I can never remember how to spell amygdala, so let’s just call it the lizard brain. Your lizard brain is a very important part of your body because it is the one that protects you from dangerous situations. A saber tooth tiger jumps out at the caveman and he has to decide whether to fight it or run. Personally, I would go for run.
The lizard brain makes that decision quickly whereas if the caveman left it to his analytical brain, the thought process may go like this: “Wow that is a big animal and it looks very hungry. Beautiful stripes and huge teeth. Wonder what I should do.” Chomp, no more caveman.
In a more recent example, when you get bit by a mosquito, your lizard brain automatically makes your hand slap the mosquito. Then your analytical brain looks at the dead mosquito and ponders whether you just got West Nile virus.
So, who cares, right? Don’t give up on this blog yet. Understanding this concept could be the best thing you ever did to achieve financial independence. Here is why.
The new replacement for the cavemen’s sabre tooth tiger is much more powerful and efficient. It is the monster created from the merger of neurosciences and marketing. The study of the human decision-making process is being fueled by the immense size and growth of consumer marketing and has created a highly efficient system that controls those who do not analytically fight our lizard brain commands.
Wow. Long sentence with a lot of big words. See what I did there? I just zoned out your lizard brain. Now, quick while it is asleep, let your analytical brain take over for a few minutes.
The top five credit card companies spent over $1 billion in 2019 on advertising in the US and credit card balances are over $890 billion. The overall debt balance is $14 trillion and has been rising every quarter for the last 20 quarters according to the New York Federal Reserve Board. If you are not used to dealing with very large numbers, like me, a trillion is a million times a million.
The advances in neurosciences and behavioral economics have given large companies the ability to appeal to the lizard brain to buy now and pay later. In short, they have the motive, the resources and the technology to get the masses to live in perpetual debt and pay perpetual interest.
Before you get all depressed, I have some good news. It is very simple to fight the big monster. 1) Be aware that it exists and is coming after you and 2) Use your analytical brain to put together a financial plan for your future.
That’s it. Do it. Set your goals, put together a plan, then constantly monitor and modify it. That will keep your lizard brain under control and keep you out of debt.
Written by Dave Blancett, AFC®, helping families and individuals manage their money for over 30 years.