Guest User

February 24, 2022

Episode 189: Regret (and How to Read More w/ Neil Pasricha)

Guest User

February 24, 2022

Today’s guest is Neil Pasricha and he joins us to discuss how to read more. Before our time with Neil, Ben and Cameron lead the discussion, working through a range of topics including how to grasp large numbers, the value of ‘humbitious’ leadership, and how to get a better understanding of regret. When Neil jumps into the conversation, he starts by making an argument for reading, telling us how it is the best form of compressed knowledge we have, and that readers effectively live a new life each time they read a book. We hear about how Neil got back into reading later in his life and the role it has played in shaping so many of his most significant projects over the last few years. He answers some common objections that people have to reading, busting the myth that there is no time for reading or that only certain kinds of books are worth it. In light of our current reading challenge, we hear Neil’s views on whether making a public commitment is an effective approach to reading more. Wrapping up, Neil makes a great point about the importance of finding the right books for your personality and gives some helpful tips for how to do so.

Key Points From This Episode:

Updates: things to watch, our reading challenge, top books, and more. [0:00:19]
How Cameron stumbled upon today’s guest, Neil Pasricha. [0:02:34]
Finding ways to grasp big numbers in Making Numbers Count. [0:04:27]
Discussing the value of humble but ambitious leaders in Humbitious. [0:10:01]
This week’s news: Wealth Front is contesting the value premium. [0:15:42]
The importance of understanding regret for making financial decisions. [0:25:00]
The main types of regret and things that people feel this emotion about. [0:31:58]
How to prevent future regret and manage current regret. [0:38:10]
Cameron’s quasi-obsession with enabling teams as they scale. [0:45:00]
The tool Cameron and Ben are going to build to survey financial goals. [0:47:45]
Neil Pasricha joins us to talk about how to read more. [0:50:05]
Access to compressed knowledge and why reading is so important. [0:50:23]
Whether Neil’s advice for how to read more has changed as the world has. [0:51:53]
Why Neil started reading more and how that morphed into his podcast. [0:52:14]
Objections to people’s arguments for why they don’t read more. [0:54:20]
Whether it is important to have a physical space dedicated to reading. [0:56:57]
Perspectives on making a public commitment to reading more. [0:58:24]
How Neil finds new books to read. [0:59:20]
Whether Neil finishes every book he starts. [1:01:09]
Why the device that we use to read matters. [1:02:44]
Which kinds of books Neil keeps on his bookshelf. [1:04:40]

Read the Transcript:

Ben Felix: This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making, from two Canadians. We're hosted by me, Benjamin Felix and Cameron Passmore, portfolio managers at PWL Capital.

Cameron Passmore: Welcome to Episode 189, kick it off just by a little bit of content, Lisa and I are really into Succession. I don't think you're watching Succession, but it's a really interesting show. Some pretty crazy stories, pretty crazy characters, but it's really enjoyable.

Ben Felix: What's it about?

Cameron Passmore: Oh, it's about this media family, like the Murdochs, very wealthy American media family, and the father owns the majority, and it's all about the kids positioning to take over the company and some pretty crazy twists happen. And it's a story of that. But we're talking about over the top opulence and wealth.

Ben Felix: Interesting.

Cameron Passmore: Interesting storyline, great characters, really good characters. I was really getting into Billions and then after Season Five, Damian Lewis did not renew his contract, so he's no longer Axe of Axe Capital. So it's not the same, as I drifted away from Billions, so it's nice to have Succession to fill in a bit of the gap. Anyways, Reading Challenges kicked off with a bang. Incredible. So we have 260 people in the Reading Challenge and there's been 292 books completed so far this year-

Ben Felix: Unreal.

Cameron Passmore: ... which is unreal. Of course, it's never too late to join. Yes, we're saying 22 and 22, but whatever your personal challenge is, it's totally fine, do what you think is reasonable for you, and we're going to be doing this through to the end of 2023, so there will be a new challenge next year. So Angelica let us know Ben, that the top books have been read so far. Number one is Psychology of Money, number two is Trillions, number three is Dopamine Nation.

Ben Felix: All good books.

Cameron Passmore: They're great books. 30 book reviews have been written and they're really good. I haven't seen them all, but I poked through a bunch of them. There's some really good... so if you're looking for an idea of what to read, scroll through the book reviews, 607 badges have been earned, and yes, there's a welcome badge for all signups, so when you take that out, 347 badges have been earned. So there's some good coupons for the merchandise store that come as you read more books and any book counts towards the reading challenge. Some people have asked if it has to be personal finance or can it be audio, whatever works for you, it's totally fine.

Ben Felix: Yeah, genre, format, doesn't matter. Audiobooks-

Cameron Passmore: Doesn't matter.

Ben Felix: Ebooks, paper books, fiction books.

Cameron Passmore: Now we had some feedback that phone numbers are not fitting into the allocated space, so Angelica fixed that. Also heard from somebody that the app doesn't appear to be available in Portugal, I've not heard back from him, so maybe it's worked out, but if you're having trouble in your jurisdiction, let us know, and we'll reach out to the program, the Beanstalk people.

This week we have, to keep up the momentum, as we told you the last time with Heather joining us, that we're going to having a special guest joining us periodically, just to inspire us to read more, so this week it is Neil Pasricha, a neat story that links to the book review today, is that I was reading today's book which is called Humbitious, and in that book the author mentioned an HBR paper, 8 Ways To Read (a Lot) More Books This Year. So of course it tweaked my interest, I did a simple Google search and discovered the author Neil, who is a Canadian, and who has been on two previous guest podcasts before. So he was on The Knowledge Project with Shane Parrish, and also on Digging Deep with Mark Sutcliffe, so I pinged Mark and he said, "Oh, just reach out to Neil." So I tracked Neil's email down, I reached out and he responded right away, and what a high energy interview, you're going to love it.

Neil's the author of the awesome serious of books. So many people have read that book and there's four in that series. He's also the host of the Three Books podcast, which is pretty cool. He wanted to discover the thousand important books you should read, I think something like that, and he does three books per podcast. Really, really interesting podcast. Also worth noting that that article, 8 Ways To Read (a Lot) More Books This Year, was the number one downloaded article in the Harvard Business Review in 2017.

Ben Felix: Hmm.

Cameron Passmore: Another thing I want to let you know about, is Angelica and Sandrine had a online contest to choose what book people wanted me to read next, and they chose Making Numbers Count by Chip Heath. So we had 173 people Ben, that voted on that. So I read it last weekend, loved it. Loved it. So I'll do a review on that in two weeks. It's a really fun book, and you realize how important it is to communicate numbers in a way that they make sense. Because see, we throw around millions and billions and percentages, but look at the death rate for example, from the pandemic, or unemployment numbers or inflation numbers. And if you don't have a way to relate it back to something that has meaning measurement to you as a human, these numbers mean nothing. The one great example is, if you spend $50,000 a day and you had a million dollars, forgetting any growth rate, a million dollars will last you 20 days. But if you had a billion dollars, spending 50,000 a day, it will last 55 years. It's ways of framing information that really make your head shake.

The other interest thing too, and you talked about this with Heather a couple weeks ago, how people learn by reading and extract information from what they read and then capture it. I'm really becoming interested in, and you really spun me around how you do the audio and then the hard copy version, then the digital version in order to search, but you like the hard copy to thumb through and back and forth and highlight. I thought that was really interesting. So I was reading on the weekend, the Making Numbers Count, and I said, "There's got to be a way to do your method, but digitally." So I Googled that and I found a YouTube video on an app called Readwise. And I know I pinged you as soon as I discovered this.

But it is super cool when you use a Kindle, you can just highlight, drag your finger and create a note, and I should have known this, but these notes are automatically stored up in the Amazon cloud. But Readwise, you could link it to these notes and it pulls it over automatically, organizes it, it tells you what book it came from, what page it was on, which is great, but then it creates these little flashcards and you tell it, "Okay, I want you to prompt me with five messages a day at 5:30 in the morning," or whatever. And every day these come to you, like flashcards. You end up remembering things. When you think of the number of quotes that were in Morgan Housel's book, The Psychology of Money.

So I've done this now for almost a week, and it is amazing how it organizes and collates these notes. And on top of that, you can link Readwise, I use Evernote as you know, it links it to Evernote, which then allows you to manage and cut and paste and organize the notes, for example, to help prepare for these notes. It is really cool how it works both ways. Super easy, it's a cheap app, I'm really impressed with it. Upcoming guest next week, Leonard Mlodinow, and that was a really good interview, wasn't it?

Ben Felix: Really good, yep.

Cameron Passmore: So he's a longtime friend of ours, an author of the recently released book, Emotional: How Feelings Shape Our Thinking, and yes, at Rational Reminder, we're getting our feelings, and the week after that, Morgan Housel will be here, number one book that people are reading, so he's going to join us a talk about reading. That week after that, economist and professor Alex Edmans joins us, he's the author of the book, Grow The Pie: How Great Companies Deliver Both Purpose and Profit.

Ben Felix: That was another really good one.

Cameron Passmore: Good conversation. And then after that, Larry Swedroe is going to come back and join us and again, in the reading theme, so Larry is a unbelievable reader. And he cranks out... he's done it every year now for years, his reviews of all the books he reads and he's also a prolific author, of course. So I think that will be an interesting conversation as Larry always is, and a week after that is Bill Janeway that you got to join us.

Ben Felix: Yep, Bill's going to be, I anticipate, another excellent conversation.

Cameron Passmore: Maybe you want to talk about ratings and reviews?

Ben Felix: Yeah, well we always appreciate it when people leave reviews for the podcast and rate the podcast in iTunes or whatever platform you happen to be listening on, as we understand helps other people find the podcast, which is always a good thing. We didn't usually read out the reviews, the recent reviews from iTunes, but there were not any since last time we read them out, but you Cameron, got a bunch of LinkedIn messages that you wanted to talk about.

Cameron Passmore: Yeah, just nice people reaching out. So Lucas in Stockholm reached out and said the podcast episodes are, to quote him, "A game changer." Liam in Doha, Qatar is a huge fan. Edgar from South Africa is grateful and wanted to say thanks. There's Jorge here in Canada and Patrick from Philadelphia. So these are a sampling of people I heard from this week. And it's a crazy, in a matter of a few days, you hear from all these different parts of the world. The Instagram following is growing, we're over a thousand followers there, so you can check out Rational Reminder and see some of the great artwork and ideas that Sandrine's putting out. You can subscribe to the podcast on YouTube where there's over 12,000 subscribers. I'm on Peloton at CP313, and we have 81 members in the #rationalreminder group over there, which is pretty cool. And of course we're both on Twitter. Long intro, I know. Anything else?

Ben Felix: We're not supposed to talk about the length, come on.

Cameron Passmore: I didn't talk with the length, just said... hey.

Ben Felix: Welcome to Episode 189 of the Rational Reminder podcast.

Cameron Passmore: Okay. If you enjoyed the discussion of the book, the Culture Code two weeks ago, and if you're in any sort of leadership position, and if you like the style of how Ben and I communicate, you're going to love this book called Humbitious: The Power of Low-Ego, High-Drive Leadership by Amer Kaissi, just and I loved, loved this book. Of course Humbitious is the combination of humble and ambitious, and I've been raving about it to so many people, anyone who will listen, I gave it out to a bunch of people here at the office, and I realize I'm biased because it reflects one of our company values, which is "Compete fiercely, but remain humble", so we've long had this as part of our thinking. I think it also reflects the style of our organization, the culture of our firm, which is really high trust, high delegation, autonomy, high engagement between team members.

So again, if you're in leadership at all I highly recommend this book. And if you recall from our discussion about The Culture Code, the underpinnings to a successful team are the three things. Safety, vulnerability and purpose, and of course it all intertwines with the idea of Humbitious. So the author defines humility as the orientation that represents an underlying belief in one's capacity for substantial growth and self development, which I thought that's a really interesting framing, because I think a lot of people, I know I thought of this before, that if you're humble, it's almost false modesty in some cases, but when realize it's more about your ability to grow and to look for ways that will help you grow, I just love that way of looking at it. Anyway, so there's two big takeaways from this book, one is being humble... being humble is not a sign of weakness. The author argues that humble people are better able to self-assess, they're more realistic about their performance expectations, they're less likely to meet deadlines and rarely sacrifice the quality of their work.

Ben Felix: Less likely to miss deadlines.

Cameron Passmore: Yeah, less likely to miss deadlines.

Ben Felix: You said meet deadlines.

Cameron Passmore: Oh no, no, you meet deadlines. You're less likely to miss deadlines. So humble people also appreciate the strengths of others and are more likely to notice high performers and model their behavior. And humbitious leaders are humble and ambitious, but the ambition is for the organization, and that's the humility part of this. There's an unwavering resolve to produce long term performance for the collective, take ownership of poor results, give credit to others and set standards for greater organization. So again, according to the author, humble people are more open to feedback, they take remedial actions to improve things... get this, they're more satisfied with their lives, and they're generally more grateful and agreeable and less likely to be pessimistic.

More likely to be happier, have greater life aspiration and higher subjective wellbeing, and more likely to have meaningful relationships. But again like The Culture Code, the most crucial ingredient in a team that achieves and sustains historic greatness, is not the amount of resources, which is exactly what we talked about two weeks ago, the experience of the coach or the loyalty of the fans, it is the character of the captain, is what the author argues. And to be sustainable over a long period of time, you need a captain that leads from the shadows, so it's this combination of selflessness and determination that drives a great team to high performance.

Ben Felix: Interesting. We talked a little bit about the importance of leadership with Alex Edmans too. His belief is that CEO pay is not a problem. Like the high CEO pay? He doesn't think it's a problem because of how important leaders are at a value creation.

Cameron Passmore: Exactly. Interesting that the author also talked about how people are seeking systems and they crave learning and explorations, so it's a combination of systems to work in, but the ability to create and explore. And again, we talked about that a couple weeks ago and if ideas are not coming up, he says, "There is a culture of fear, period." And we talked about safety and vulnerability two weeks ago. So again, it all links together. So some of the ideas to create a more humbitious environment, so he says to set up a team to confront challenges with humility and confidence. He says you have to make sure you combine selflessness with fierce determination. That leads perfectly to one of our values. As I said, "compete fiercely, but remain humble." Model humility by admitting mistakes and shortcomings, that's being vulnerable, and create psychological safety, so people feel comfortable developing deep connections, and you empower employees to grow.

He also talked about humility. One of the big things to increase your humility is to acknowledge a block, which I thought was interesting. And the last point I wanted to make is he talked about an interview conversation that Oprah gave at some point, the common denominator, she says, in every one of the interviews she ever did, was that everybody wants to be validated. Every interaction you have, people are saying, "Was that okay? Did you hear me? Did you see me? Did what I say mean anything to you?" And he highlights big time that appreciation is the most important need that humans have, and as humbitious leader, you have the power to help satisfy that need. So I thought that was really interesting. Again-

Ben Felix: Very cool, yeah.

Cameron Passmore: Awesome book. Check it out. I know you've got a copy.

Ben Felix: I think it's in my mailbox. Because I live in the forest now, I have a post office that I have to go to get my mail, and I haven't been for a bit. I'll go pick it up soon.

Cameron Passmore: All right, onto the news stories.

Ben Felix: Yeah. So Wealthfront, which is a robo-advisor in the US, they, as their headline reads, are updating their smart beta offering. Well, I'll touch on it later, but Wealthfront's done some other funny stuff in the past, but this time around what they've decided is that, based on intensive research, they're updating the factors that they use and they're dropping the value factor in their smart beta model portfolios, because research suggests... this is their words-

Cameron Passmore: Was that air quotes you're doing there?

Ben Felix: Oh yeah, big air quotes. Research suggests, according to Wealthfront, that value is no longer as effective as it once was. Value is measured using a company's book equity to market value ratio, which is one way to measure value, so I think that's not the only way, but it doesn't account for our company's investment intangible assets like R&D, brand value and patents, all of which are becoming increasingly important in today's economy.

Cameron Passmore: Here we go.

Ben Felix: So they're dropping value, picking up profitability as a factor. So the smart beta model portfolios are no longer going to have value, but they will have profitability along with a couple of other factors that they're keeping. They think this is going to improve risk adjusted returns. Intangibles are an interesting one, because that's been part of the anti-value or the anti-book to market value narrative for a while. There's a good paper from Rizova and Saito from Dimensional, the paper's on SSRN for anybody to read, but they did a study of whether incorporating estimates of internally developed intangibles in value and profitability, result in larger premiums. I thought it was relevant to just mention his notes because Wealthfront is saying, "Intangibles are the problem. That is why we're dropping value." It's a funny reason they give, but we'll see why it's funny in a second.

So, and in this paper they find that adding estimated internally developed intangibles to book value, would have in fact had a slightly positive impact on the value premium over the long term, but, and this part's really interesting, the impact is primarily driven by differences in the sector weights. So adjusting for sector differences in the regular value portfolio and the value with intangibles portfolio, adjusting for sector differences largely eliminates premium differences in the three regions that they studied, which was I think US, international developed and emerging markets. Now that makes sense because, if you take sectors like tech and healthcare, they're going to have more internally developed intangibles, so if you add that into HML, you're going to end up with a sector tilt toward those industries. So neutralize that, and any additional premium goes away. Then they also looked at an adjustment of profitability for estimated internally developed intangibles, because if book equity is adjusted for HML, we should also be adjusting it for profitability, because it's gross profit scaled by book equity, or operating profitability scaled by book equity.

You also have to adjust profits, not just on the book side, but you've got to adjust profits by adding back the capitalized portion of SG&A, so you can't just adjust book and not adjust profitability, is what they're saying in this paper. So when you make those adjustments, the profitability premium is slightly lower on average than the adjusted one.

So I don't know the details of how Wealthfront is going to be incorporating profitability, but presumably because of the importance of intangibles, they're going to be including intangibles presumably. And if they do that, they're going to, historically, get a slightly lower profitability premium, which is interesting. Maybe they posted their methodology, I didn't dig that hard. So if we're using the intangibles adjustment, then you get a slightly higher value premium, which fits with the narrative that Wealthfront has going, but you also get a lower profitability premium.

So then Rizova and Saito in their paper, they ask "What the impact of including the internally developed intangibles has on double sorts of value and profitability?" So previously we were just talking about value portfolio and a profitability portfolio, how do the intangibles affect the premiums? But then they say, "What if we do a sort on both variables?" So portfolios sorted on value and profitability. And what they found there was that adjusted and unadjusted, the premiums are similar. So you're not getting a higher or lower premium for intangibles, if you're doing the double sort on value end and profitability. For Dimensional that's interesting, because they are doing the sort on value and profitability, and that's been their point all along is that, as everyone's whining about intangibles, Dimensional is saying, "Well, because we're looking at book to market and profitability, it doesn't actually matter." It seems to come out in the wash.

And a lot of that I think has to do with noise, they've got another recent paper that came out on... there's a ton of noise in internally developed intangibles, and you can measure that by estimates versus realized on an acquisition. Anyway, so there's a tremendous amount of noise in that figure, which is probably one of the reasons that it's problematic to try and include in measures of expected returns.

Now back to the Wealthfront story, why is this relevant for investors or why does this matter? Switching value for profitability is probably inferior to combining value with profitability. We know there's a value premium, although I guess, Wealthfront is contesting that, on what grounds I don't really know, but we also know there's a profitability premium and I don't know why you would ignore a big chunk of the information that we have about expected returns by dropping value, instead of combining it with profitability. Anyway, it was an interesting story because a lot of people picked it up and said, "Hey, this is weird."

Cameron Passmore: To say the least.

Ben Felix: I thought we'd say a few things about it. Now, I mentioned that this isn't the first time they'd done something weird. So in 2018, they launched a risk parody fund, Wealthfront did, and they automatically opted their clients into it. And when they launched it, the fund had a fee of 50 basis points, which compared to the six basis point, whatever, ETFs that they have in their portfolios, and keeping in mind, these robo-advisory platforms launched as, "Hey, we'll give you access to super low cost ETF portfolios that are automatically rebalanced." And people signed up for that, and then all of a sudden they dropped this 50 basis point product in their portfolios that you have to opt out of, if you don't want it.

And then eventually Wealthfront dropped the fee back to 25 basis points, or down to 25 basis points, but people weren't happy. And I looked that fund up, it's performed really badly since then. It's only a few years, so that doesn't really matter, but you can imagine if you're an investor at Wealthfront and you showed up for the low cost cap-weighted portfolios, and you have this risk parity portfolio shoved down your throat, and it performs horribly relative to the market since inception, you might not be too happy.

It's interesting to think about generally, right? What was the purpose of these robo-advisor services? To keep people disciplined, to make portfolio management simple for a low cost, to execute and to rebalance, but when you look around and we've talked about Wealthsimple's in Canada, Wealthsimple's portfolios, and they've done weird stuff too, not to mention their crypto trading service. There's not a lot of money to be made in helping people make good decisions for low fees. I guess. That seems to be what's happening.

Cameron Passmore: I guess that's a question what if you have to stick to your initial mantra, which was your modern portfolio theory, while diversified low cost, or could they argue that their client base evolved, and they're just reflecting and they're just reflecting their demands?

Ben Felix: Yeah.

Cameron Passmore: I don't know.

Ben Felix: I don't know either. Cliff Asner's had some good commentary on this. So Cliff quoted the Wealthfront article saying they're dropping value in the quotes, in Cliff's tweet, "We'll no longer use the value factor in our service, as research suggests it is no longer as effective as it once was." And cliff says, "What research? Realized returns at the peak of a bubble? Here's the actual of research." And he links to his, "The long run is lying to you" post that we've talked about on the podcast a few times, and then he follows up with that tweet saying, and this is kind of what I was just saying, "Literally the main way you can add value," you being Wealthfront, "for your clients, is exactly not doing this, especially now but in general. You exist in theory to fight such short term momentum at a value time, horizon nonsense. This is an epic, reckless fail."

Cameron Passmore: That's Cliff. He's got a good point.

Ben Felix: Yeah, it's funny though, because a lot of this happened last year too, where he saw some value managers shutting down and people dropping value to strategy, and now Wealthfront's doing it too. Only time will tell if they're right, if value's really dead or if they're just capitulating as you'd expect people to do, investing in a volatile risk premium.

Cameron Passmore: Okay, onto the big show.

Ben Felix: Yeah, so speaking of giving up on value, I wanted to talk about regret. I mentioned in our last episode with just the two of us that I was going to do emerging markets as a topic, but I also had that paper that I mentioned last time that I've been working on, and the last section that I had to write was on regret. So I wanted to finish that and then it ended up taking all the time that I had. So emerging markets will have to wait until a future episode.

So financial decisions, like we were just talking about with the value premium, are always going to be surrounded by uncertainty. A good decision made with all the best inputs from being as scientific as you can, does not come close to guaranteeing a good outcome. There's just so much uncertainty in financial markets, but also in life. And regret is a unique emotion for people making decisions. Like you only get to feel regret if you make a decision, which is interesting when you're talking about decision making. It's a fundamental aspect of regret. If you get a bad outcome that you're not happy with but you didn't make a choice, that's disappointment. But if you make a choice and get a bad outcome, you get regret.

And I think it's easy to say, and I've got a YouTube video where I did say this, that you should separate the quality of your decision from its outcome, but I think it's a lot more challenging to suppress feelings of regret if you get an outcome that you're not happy with. Dan Pink in his book explains regret as "The stomach churning feeling that the present would be better, and the future brighter, if only you hadn't chosen so poorly, decided so wrongly, or acted so stupidly in the past." I thought that was a pretty good definition of regret.

Cameron Passmore: And give a shout-out for that book in the reading challenge, it's an excellent read.

Ben Felix: It is good, I agree.

Cameron Passmore: And hopefully we'll have him join us one day.

Ben Felix: Yeah. The feelings of regret can be experienced about decision process and also decision outcome. So you can look back and wish that you put more thought into a decision, but you can also just have regret about the outcome itself. And regret in the absence of self-regulatory abilities, and that's an important piece, so people who are not good at self-regulating, frequent episodes of regret are associated with poor life satisfaction. So that there's potentially real implications on enjoying life for regret. So understanding regret is important for people making financial decisions, understanding ways to prevent it, and also understanding ways to deal with it, but just understanding what it is, I think, is important.

So to talk about regret, we've got to talk about counterfactual thinking. Counterfactuals are alternative realities that you construct in your mind, where things turned out differently than reality. So you might feel regret if you can readily imagine having taken an action that would've led to a more desirable outcome. So that's the mechanism for regret. And one of the strongest determinants in forming counterfactuals is closeness. The closer that you were to an alternative outcome, the easier it is to form the counterfactual. So Kahneman and Tversky give the example in the 1982 paper, where I think they defined counterfactuals, "A passenger who messes a flight by five minutes, generally experiences more regret than one who messes a by 30 minutes, because they were closer to-

Cameron Passmore: Absolutely.

Ben Felix: ... making it.

Cameron Passmore: It's a great example.

Ben Felix: And closeness is not just about timing, like in that case they were five minutes away from missing the flight, so it was easy to form the counterfactual, it's the ease with which elements of reality can be cognitively altered to construct the counterfactual. It's not just about time, it's like if there was one small action that you had done differently, that's also a closeness. And there are two main mechanisms that drive counterfactual thought. One is contrast effects, so that's juxtaposing reality against what might have been in an alternative reality, so as an example, winning $50 feels nice if you would've otherwise won nothing, but if you almost want a hundred dollars, winning $50 does not feel quite as nice. And that one, there's a famous study on Olympic medalists. And this is also in Dan Pink's book.

Cameron Passmore: This was so interesting.

Ben Felix: Yeah. So the study authors found that the dominant counterfactual that "I almost came first", which is an upward counterfactual, gives the silver medalist less satisfaction, while the dominant counterfactual that "I almost came in fourth, and didn't" medal, which is a downward counterfactual, gives the bronze medalist more satisfaction. So bronze medalist at the Olympics are happier than silver medalists. I think it's been studied out of their initial sample as well with similar results. Pretty interesting. Empirically upward counterfactuals, those are the, "if only" whatever, "things would've been better," are much more commonly experienced than downward counterfactuals, which is the "things could have been worse". So that's interesting too, right? If you think about counterfactuals, people aren't as often walking around thinking, "Well, at least that happened. Things could have been worse." They're more likely to be thinking, "Ah, if only things would've been better." So that's important.

The other mechanism for counterfactuals is causal inference effects. I think this one's particularly important for financial decision making, so causal inference effects of the result of imagining an alternative reality. For that reality to exist there has to be a set of alternative facts. If everything else in the alternative reality is the same, except for a single action believed to be the causal force behind the outcome, then it feels like changing that action would change the outcome. Now, the problem is that changing that one action in a future situation may not give you the same outcome as it would have in the past. So using stocks as an example. Say you decided to sell a stock before it increases in price substantially. So you're kicking yourself for having done that. Your action of selling might be perceived by you as the causal force behind the outcome and the counterfactual therefore involves not selling the stock, holding onto it, for its price increase. And the causal inference is that if you'd not sold, you would've gotten the better outcome.

Now, I think stocks are a particularly good example for this. This is only true if all of the other facts, including the stock price increase, are the same. And when you think about the enormous positive skewness in individual stock returns, that's pretty unlikely. So causal inference can lead to an incorrect application of the perceived cause of relationship, holding onto the stock, in my example, to future decisions. And another way to think about that is that it's something called base rate neglect, where you neglect the base rate that most stocks don't go to the moon. So, okay. So those are the mechanisms.

This next piece I find absolutely fascinating. Empirically, what do people regret? And some of this comes from Dan Pink's book, some of it comes from a 2011 study by Morrison and Roese. So empirically, Dan Pink in his 2020 US regret survey, finds that people's regrets most commonly involve family 21.8% of the sample, partners 19.2%, education 15.6%, career 15.1%, finances 13.5% and health at 6.6%. And most people regret inaction, so not doing something, rather than action. So people regret their inactions more frequently than they regret their actions. So that's Dan Pink's 2020 finding and then Morrison and Roese in a representative US sample, pretty similar findings.

Romance is the most common, 19.3%, keeping in mind Dan pink found partners, which is similar at 19.2%. Morrison and Roese find family is the next, and again that was also top in Dan Pink. Education, career, finances and parenting. It's pretty common threads across those two samples, interesting to see. In the Morrison and Roese sample, they had it broken down by demographics as well, so they found that women and people not currently in a relationship are more likely to have romantic regrets. Men and better educated respondents are more likely to have career regrets, and over time regrets about action tend to dissipate, while regrets about inaction linger for longer. It's pretty interesting.

Dan Pink in his book, classifies regret into four categories, and I thought this was also useful to think about it. So foundational regrets, and this is based on his US regret survey, and he has also got a world regret survey, and based reviewing thousands of responses from that, he'd figured that regrets fall into these four buckets, like factors I guess, for regrets.

So foundational regrets... actually maybe not, because I don't know if they'd overlap. Factors probably isn't a good analogy. So foundational regrets stem from failures in foresight, responsibility and prudence with long term consequences. So these are small decisions that are immediately enjoyable or not a big deal, but they have long lasting effects due to compounding. So overspending and under saving, it's a good example. Doesn't hurt so bad or maybe even feels good at the time, but then one day you're 65 years old and don't have savings and it hits you all at once. Not exercising I think is another good one, where watching Netflix instead of working out, seems like not that big of a deal, but then you start having health issues and it hits you all at once. Smoking is another good one, drinking too much, not eating well and giving up an education is another one. So those are foundational regrets. And probably stems from temporal discounting, people tend to favor the present at the expense of the future when they're making decisions.

That's pretty well documented. It could also be a weak connection with the future self, like we talked with Hal Hershfield about. But in either case, the empirical result is future regret. And in Dan Pink's book, he says that foundational regrets take years or decades to materialize, and that the nature of compounding on financial assets and other aspects of your life, is probably what makes it hit you suddenly and compounding is not easily understood by people, which makes this even more problematic. Because it seems like all those little actions or inactions are not a big deal, and it's hard to think about the exponential effects that they might have, which is why it feels like those regrets hit you all of a sudden, all at once.

Boldness regrets, are the next category, so those are the result of playing it safe, followed by the counterfactual where taking the risk that you didn't take, would've resulted in a better life. So this could be missed romantic connections, which remember is a big, common regret, declined job opportunities, or maybe not starting a business. Maybe holding individual stocks fits into this one too. If you had a position in a single stock that did go to the moon, but you did sell it, maybe you'd look back and wish that you took that risk. In the long term people tend to regret things that they fail to do, more than the things that they did do, so that's the inaction thing that I mentioned earlier. And those inactions don't tend to dissipate in the same way that actions do. So even if you regret an action, that regret will tend to dissipate, but regrets with inaction won't tend to.

Moral regrets are the next category, so that's doing things that felt wrong. So Dan Pink uses Jonathan Haidt's 2012 Moral Foundations Theory, to categorize moral regrets. Hurting people, so that's through stuff like bullying or insults or ghosting romantic interests, cheating, which could be in relationships or in school or stealing, stuff like that, disloyalty by falling short of obligations to a group, subversion through disrespect to parents or teachers, and desecration or violating sanctity. Those are moral regrets.

And then connection regrets, which I think Dan Pink says are the biggest category from all the responses that he collected. So those are the biggest one, and it's letting go of relationships or letting relationships break down and not fixing them, was a big one. And that's one that you can maybe do something about, because if you have situations like that, you typically can go back to the person and rekindle the relationship. Maybe, I don't know if typically it's the right thing to say there, but in some cases you can do that. And then of course, there's all the research on how important relationships are, so it shouldn't necessarily be surprising this is an important category of regret. And there's also a paper from Morrison and Roese, 2011 paper, and they find that regrets involving primary social relationships, being romance and family, are felt more intensely than less socially based regrets, like work and education, suggesting that social connectedness plays a central role in what people regret the most.

Pretty interesting. So preventing future regret, so we get the idea that regret is something that you maybe want to avoid if possible. Future regret can be moderated or eliminated by improving decision quality, increasing decision justifiability, transferring decision responsibility, ensuring decision reversibility if possible, and avoiding feedback about unchosen alternatives. That last one's pretty interesting. So improving decision quality, it's really like being more thoughtful about decisions. So I thought of Heath and Heath, same Heath I think, that wrote your numbers book you mentioned earlier. So they suggest a framework in their book, Decisive, widening your options, reality testing your assumptions, attaining distance before deciding and preparing to be wrong, but in general, improving decision quality is one way to minimize the chance of future regret. Increasing decision justifiability, and this one's fascinating, so making normal decisions generally produces less regret than switch decisions, like unusual decisions. But it's challenging because normal decisions aren't always good.

When you think about regret aversion in investing, can lead people to popular investments, whether that's popular stocks or calculated index funds, I don't know, stuff like that. And it's the whole concept of tracking a regret, I think, we can tie into that. Where if you do something that's different from what most people are doing, your chances of feeling regret are going to be much greater. I also thought about this one for housing, if you choose to rent when it's normal to buy, and then the real estate market goes up, you might feel worse than if you choose to buy and the real estate market goes down. Because in that case, you're doing the normal thing and you're in it with everybody else, it doesn't feel as weird. Not to say that buying a house is the right decision, but I think that exposure to potential regret is at least worth thinking about.

Another way to reduce potential regret is transferring decision responsibility, and I'm not saying the papers that these are from, but there's citations for all these for all these that we can maybe put in the podcast notes. So transferring decision responsibility reduces regret by making another party, typically an expert, responsible for the decision and since I mention it, that's a Zeelenberg and Pieters 2007 paper, when decisions are reversible, people anticipate less regret. And this one's fascinating too. So if a decision is reversible, people anticipate less regret, but they may experience more regret because reversibility increases counterfactual thinking. So if you make a reversible decision, people anticipate less regret, but then as they go on through time, they may experience more regret because they're always thinking about the option to reverse the decision. Yeah, I thought that was interesting.

And I thought that was interesting too, because one of the most common questions, not everybody asks this, but it's definitely a very common question when we're talking about asset allocation with PWL clients, it's very common to say, "We can change it, right?" You notice that too?

Cameron Passmore: Yeah.

Ben Felix: And that's clearly an investigation about reversibility. Another tactic for avoiding regret is avoiding feedback about unchosen options. So it relates to the last thing that I just mentioned there, where if you don't see how the alternatives turned out, then you don't have an opportunity to feel regret, because there's no counterfactual.

Cameron Passmore: Speaking of future regret, was it Pink's book that talked about Alfred Nobel?

Ben Felix: Not sure. I don't don't know if I remember seeing that in there.

Cameron Passmore: I think it was another book I read and it was all melded together. But an example I read was Alfred Nobel was a chemist who created dynamite and explosives, and his brother passed away but they accidentally wrote the obituary about him in the paper. And he got slammed for having created dynamite and some of the bad things that came from that. So that's when he didn't want that to be his legacy, which is effectively a future regret for when he did pass away. So he repositioned his life and created the Nobel Prize and funded it. So now he is known obviously after his passing for having created this, and that's his legacy as opposed to being a... I don't know if he created dynamite, but he was a chemist behind dynamite. Just thought that it was interesting how he had a decade to basically rebuild his brand.

Ben Felix: That is interesting. Okay, so we talked about preventing future regret, managing current regret, so there's stuff that past decisions that are currently being regretted, can be reduced by undoing the decision if possible, justifying the decision or reappraising the quality of alternatives, as people are more likely to undo decisions of action than inaction. I think that's a practical thing, like it's harder to do decisions of inaction because of the compounding stuff that we talked about. If you didn't do something 20 years ago, it may be harder to go and just do that thing now, whereas if you did do something, it might be easier to go and I don't know, apologize for it kind of thing? But not all actions or inactions are reversible, of course. When they're irreversible, justifying the decision, or in Dan Pink's words, "taking an at least perspective on the decision can reduce regret." An alternative counterfactual perspective that may minimize regret is the, "even if," perspective, where the outcome is equally bad, even if a different decision had been made. So that's reappraising the quality of alternatives.

And then the last piece I think is really interesting on this topic is embracing regret. And this is one of the things I took away from Dan Pink's book, is regret's not always bad. So that uncomfortable feeling that I described earlier using Dan Pink's quote, can actually improve future decisions, boost performance and deepen meaning. Regret aversion has been shown to make decision makers take significantly longer to reach a decision and to collect significantly more information before making a choice. Interesting. And that's Reb 2007, that's where that came from. Upward counterfactuals, that's the, "if only, things would've been better," heighten the intention to perform success, facilitating behaviors and engender greater improvement on a task. Through counterfactual reflection, the upsides to reality are identified.

A belief in fate emerges and alter more meaning is derived from important life events. That's Cray AL 2010. So based on that, the popular phrase in this... Dan Pink also talks about this in his book, but the popular phrase of "no regrets" might not actually be a sensible objective. Regrets are normal and can actually be beneficial and empirically, this is also very interesting, people value their regrets more than they do their other negative emotions. Interesting, right?

Cameron Passmore: Great summary. Great book. Anything else to add to that?

Ben Felix: No, I don't think so. So that, like I mentioned earlier, that was the last section that I needed to finish in a paper that I've been working on, so that we'll try and release in the next few weeks.

Cameron Passmore: So instead of talking sense this week, can I ask you the question I mentioned before we started recording?

Ben Felix: Yeah, I don't know if I have a good answer for it.

Cameron Passmore: So I think it's a question Shane Parrish asked on The Knowledge Project, which is, "What are you obsessed with these days"?

Ben Felix: Yeah. I still don't have a good answer. I don't know. I spent the last couple weeks reading about regret, but I don't know if I was obsessed with it though. I don't know if I can honestly say that I have obsessions.

Cameron Passmore: Oh, that's interesting. I guess it depends on the definition of obsession.

Ben Felix: Are you obsessed with something right now?

Cameron Passmore: I'm not crazy about the word obsession, it sounds like you've gone overboard, but I'm really interested in, and you can tell by the book reviews, I'm really interested how to enable what frameworks, what tools, what communication styles, what knowledge do you need and how do you package that knowledge, to help a team be all that they can be, because we've grown pretty quickly and people's roles are evolving quickly and people are developing quickly, and what is the best way to make sure that we all get a chance to do what we think we can do, and how do you discover what you're really good at? There's a lot of creativity. This reading challenge is one example, this whole thing about regret and the paper you're doing as another example. We have this culture where you just take an idea and run with it and we throw the reading idea to our great marketing team and they come up with stuff and find the program and make it all work.

Whilst, how do you keep that scale? How do you ensure everyone's fulfilled? How do you keep lines of communication open? What's the best methodology? Do you train people? How do you train people? How do you learn? Because this is something when we were smaller, it was only part of each of our brains, but now it's becoming a bigger part as more and more people are managing more and more people. So that's my latest quasi obsession, I guess.

Ben Felix: That's pretty cool.

Cameron Passmore: And it's hard because there so much material. A lot of it is somewhat similar, but then it's also, what is the best way to help people to learn it? Do you teach it? Is it self-taught, is there a multimedia format? Is it a mentorship? How do you do that?

Ben Felix: It's probably a combination, but yeah, not an easy problem to solve.

Cameron Passmore: I know that and I may be over-obsessed about it, because I know some large companies that don't think about this as much, and other smaller companies that have a whole training system in place. So, is it something that's right for you and your organization or are there best practices, regardless of the size or style of the company? Anyways, it's fun to figure out.

Ben Felix: Very interesting. Speaking of... you reminded me of the other project that we recently started exploring. In our last episode with just the two of us, we talked about goals, and I wasn't convinced that was going to be an episode that people would find particularly interesting, ended up being, I think the biggest driver of new signups into the Rational Reminder community ever, because people were interested in hearing about other people's goals and sharing their own goals. So that was interesting. Wasn't expecting that at all. Good to see though. But the idea that it gave me is, and I guess reading Dan Pink's book helped me with this too, but Dan pink had these regret surveys where he had questions about regret that he put on a website and had thousands of people fill them out, and then he used that to do research. And I think we can do something similar with financial goals.

And one of the things we talked about in the previous episode is that people aren't great at identifying what their objectives are. And one of the tools that you can use to help with that is a goals master list, but we don't have that. And so how do you get that? Well, you collect the goals from a whole bunch of people and then do what Dan pink has done. You synthesize them down into common elements and then create a tool that people can reference. So if you sit down and say, "Hey, what are your objectives?" We know people are only going to get about 50% of what is actually important to them down, but if we have the master list to give to them, it'll help spur their thinking and they'll have to say, "Oh yeah, that other thing is actually really important."

So we're doing that. We're working on building a form on our website and we'll roll that out probably internally with employees, maybe to PWL clients and in the Rational Reminder community and elsewhere, maybe we share it on LinkedIn and Twitter and whatnot, we'll see how many responses that we can collect, and then we'll synthesize it down into a master list of goals. So based on the response from people, just when we talked about this, I imagine there'll be pretty uptake for filling out this little survey that we're creating, but we'll announce that when it's ready, but just so people know that is something that we're working on.

Cameron Passmore: And I think the results are going to be fascinating.

Ben Felix: Yeah. They'll probably be fascinating and they may well be exactly what you expect, or not. I don't know.

Cameron Passmore: I don't know. I don't know. Okay, shall we go to our conversation now with Neil?

Ben Felix: Let's go hear about reading and how to read more and why reading's important.

Cameron Passmore: So here's our conversation we have with Neil Pasricha. Neil Pasricha, welcome to the Rational Reminder podcast, and thanks so much for contributing to our reading challenge.

Neil Pasricha: My pleasure, Cameron Felix, thanks for having me.

Cameron Passmore: It's so great to meet you. So tell us, why do you think reading is so important?

Neil Pasricha: There is no better form of compressed knowledge, period. We have not figured out a better way to improve upon the idea, the way you get into thoughts, you can get into emotions, you can get into the nuance of anything. When you watch Big Little Lies on HBO Max, Cameron, you're watching someone else directing. They choose the set, they choose what Reese Witherspoon wears, they choose what the music plays, they choose everything. But when you read that book, you're the director. I think there's a reason there's a Game of Thrones quote that says "Our reader lives a thousand lives before he dies. The man who never reads lives, only one."

Ben Felix: That's some serious reading enthusiasm, I love it. So Neil, Cameron discovered you through an article in the Harvard Business Review that was published in 2017.

Neil Pasricha: Yes.

Ben Felix: Now I read the article, it's fantastic. But the world has changed a lot since then. Has your view of reading changed at all?

Neil Pasricha: Yeah, sure. So that article's called "8 Ways to Read (a lot) More Books This Year", where I suggest eight simple practices you can do, like putting a bookshelf out your front door, for goodness' sake. There could be simple ideas, and yet in a way the world has changed, there's a lot more stuff attacking our brains. We've got to beyond a defense all the time, for all the things that want to hook our attention and feed us endless ads. I do think to your point, because the news media's goal isn't to give us the news. It's to make us look at detergent jingles, MSNBC's goals isn't to give us... it is to sell us Subarus. Let's be honest.

Instagram's goals isn't to make us new friends, it's to sell us a 21-day juice cleanse. So we have to be even more defensive, we have to move the TV even further away, we have to keep the screens even more out of the bedrooms and we have to think of our reading vestibules or your reading home, whatever it is for you, as this protected little nest, where you can have clear thoughts to yourself, with a clear voice and a book.

Cameron Passmore: So before that article that Ben mentioned, came out, you were not reading a whole lot, but you cranked it up to reading like 50 to a 100 books a year.

Neil Pasricha: Because I got shamed by my girlfriend.

Cameron Passmore: That was the impetus for the change?

Neil Pasricha: Well, she came over. She's not my wife, Leslie. She comes over to my apartment and she's like, "Where's all your books?" And you probably know that old quote, "If you go to someone's house and they don't have any books, don't bleep them." And you've probably heard that old quote, it's printed on the side of tote bags and stuff. So she's like, "Where's all your books?" I was like, "Who's got time to read anymore, come on. Yeah, I read Twitter. Yeah, I read email. Yeah, I read like a good long juicy magazine article in The New Yorker once in a while, but who's got time to read books?" And she looked at me with this stricken face.

She's like, "Oh, you don't read books, are you kidding me?" I was like, "Oh yeah, five books a year you know, slow burners on the bedside table, couple books on the beach vacation."

She's like, "Neil, books are everything." I was like, "I know I used to love books when I was a kid when people used to read." She's like, "Really?" And then over the next year, to your point Cameron, I changed a number of things in my life. I canceled cable, I canceled five magazine subscriptions, I canceled two newspaper subscriptions, I started announcing what books I read in the form of an email list, so I had a little bit of monthly pressure. Everybody... my mom's going to read this email, so I've got to tell her what books I read. And then when that list grew to 10, 20, 40 people, that helps. So these simple little things, I was proud of myself for increasing my reading, that I wrote this article, it hits number one and HBR, and now I'm known as this reader guy, and so now I feel like I need to live up to that identity.

Cameron Passmore: So how did that morph into the Three Books podcast?

Neil Pasricha: Yeah, so that article came out in HBR in 2017. Like I mentioned, it was one of those viral articles and it was sent around and so on, and it tipped off for me this idea. And think about the title of that piece, "How To Read (a lot) More Books This Year". Well, you couldn't ask for better click bait. I don't think that was the title I gave it them when I submitted my word document to HBR, but they know something that I didn't, which is that everybody, when given the invitation, likes to read more, but they don't think they can.

And when I ask people, "Why don't you think you can?" They say, "Two problems. Number one, I've got no time," and to this one I say, "You're wrong. The University of California says the average person consumes 200,000 words per day. It's called Instagram comments, blog feeds, news headlines, nevermind the average knowledge worker gets 147 emails a day. So I'm calling BS on this idea that you don't have time to read. I say get rid of 20 pages of garbage, and add 20 pages of a book. Even at that rate you'll read 20 books a year." 65% of Americans read zero books for pleasure last year. That's a huge job.

The second complaint I always get though, the first one's of course the time, the second one I always get is, "Well, what am I supposed to read?" You go on Amazon there's 200 million books. When you pick a book, you grab War and Peace by Tolstoy, you get five pages and you quit, you think you suck. You think, "I'm not a good reader." Well actually, that's not the problem. The problem is, we don't have discovery mechanism in the publishing world to help this specific reader with this specific desire. They like this pacing, they like this type of comic timing, they like... we don't have a good model to match those together, unless you've got a wonderful librarian or a wonder bookseller at your disposal. So, to answer your question, in 2018 I started a podcast to address that. My podcast is called Three Books, and I've decided to spend 50 years of my life looking for the one 1,000 most formative books in the world. I fly around or do it virtually during the pandemic, asking people, big name people and small name people.

I ask people like Malcolm Gladwell, Brene Brown, Quentin Tarantino, Judy Bloom, George Saunders, David, "which three books most change your life?" And they think they say, "Yes" to me, just because it's a weird question they don't get asked much. There's no other reason to say yes to me, a small town potato guy from Toronto, but then I also ask a bookseller that I love. A librarian that I meet. The world's top ranked Uber driver. We did an episode in the back of his Uber. And I'm trying to capture the biggest, broadest, diverse set of people passionate about reading, because in my mind, it's been the biggest lever for me, and I haven't said this yet, to becoming a better husband, a better father, a better writer, a more intentional person. Reading has given me a sense of groundedness and created space in my life to actually achieve a lot of the things I've done over the last few years. It's been wonderful. So the Three Books podcast was created as a bit of an output of the feedback I heard from the 2017 article in HBR.

Ben Felix: You mentioned earlier, ditching your TV, cutting cable, stuff like that. How important do you think it is to have a physical space dedicated to reading?

Neil Pasricha: Well, I was thinking about this, because you were kind enough to say, "We're going to ask you about this physical spacing." And I thought, "Wait a minute, I read everywhere." But then I thought about it a little bit more. I thought... but I'm very careful. I do not have any screens anywhere upstairs in my house. And when we bought our house, I guess the guy who lived here before was a sport agent or something, there was a plasma stuck in every wall. Now we don't have anything anywhere. And I have a very strict policy. No screens in the bedroom. Look, the research from Australia shows that if you look at a bright screen an hour before bedtime, your brain does not produce as much melatonin overnight. That's the sleep hormone guys, you don't get that, you wake up, you've got low resilience, you need a dopamine hit, give me what's going in the Hang Sang index. You know what I'm saying? You need something in the morning.

Neil Pasricha: But if you get the phone completely out of the bedroom, you don't look at screens an hour before bed, so I guess the dedicated reading place is the screen-free bedroom, then guess what happens? Well, I've got nothing else to do, I've got this book here. After the first couple pages it's itchy, I'm going to confess, kind of itchy, my anxious, social media, adult brain is looking for a little bit more, but once I get into the rhythm of it and the flow of it, then what happens is, the next day, if I can hold on to that sensation, the news AM on radio, that's the thing that sounds grating and overwhelming now. You just have to get your mind back into a slower vibe. It's hard to explain, but readers will know what I'm talking about.

Cameron Passmore: So two weeks ago we kicked off an online reading community, our challenge site. So what do you think about make a public commitment to reading more?

Neil Pasricha: It was one of my eight things in that article and I believe it heavily. Look, I think there is something... when I first signed up for a Good Reads account, I was like, "Who is going to go through the trouble of saying, oh, it's on my To be Read list." Then I started reading it. Now I'm on page 112 of 402. People actually update this thing every day. And then they are like, "Then I'm done, and then it's added to my finished pile with the..." I'm like, "What's the point?" And they don't care if anyone's reading it. They're making a public commitment. Then you've got three people following your reviews, you feel indebted to them. It adds a bit of pressure. For me it was an email list, for some people, it might be Good Reads, for some people, it might be Twitter, and for others it might be this wonderful reading challenge you're doing. A public commitment adds a positive fresher. The same as betting three friends that you're going to lose five pounds.

Ben Felix: Through your podcast, you get to ask some pretty interesting people what books have been impactful to them. Where else do you find ideas for books to read for yourself?

Neil Pasricha: Yeah. It's funny that you mentioned this because literally a minute ago, before we started chatting, my wife says to me, "Oh Neil, could you post on Twitter? I'm looking for a new book. Here are six books I liked." And she's saying books that... just different than the books I like, right? She's like, "The Help, The Time Traveler's Wife, The Book in Negroes." Well, I don't know what the fourth book is in that sequence. So I just post it on Twitter. Within one minute... and I don't have a big, huge, gigantic following, I've already got 20 recommendations for my wife. So that's one.

Here's what I would say to avoid. Avoid the bestseller lists, avoid the piles at the front of the airport and avoid the piles at the front of the bookstore. The piles at the front of the airport and the bookstore are paid for. They're paid for by co-op dollars and that money is essentially part of a giant marketing spend for the biggest, most popular authors and their biggest most popular books.

Unfortunately what we end up doing by promoting 20 books at the expense of the other 1,980 that came out that week, is we neuter the public discourse and the public taste and the huge variety of minds and souls that we have, instead of giving someone this weird George Saunders Books of Short Stories that might hit them right in the gut and it's got the good pacing, and it's funny and it's a nice little invitation and it's only 200 pages long, we end up putting a giant... and I won't use any names because I'd be insulting people, but we end up putting the giant news anchor's biography that just came out, but it's like, "Man, if I picked up that thing, they're going to think I hate reading." So you've got to with the side aisles. Find the booksellers, go online and ask for recommendations and talk to the most interesting people you can find and ask them which books changed their life.

Cameron Passmore: So true confession, Neil, do you read every book you start through to the end?

Neil Pasricha: No, I absolutely don't. So I was in Oshawa, Ontario, Canada, 1979, just to give people a little picture of growing up in the 80s and 90s. You get assigned a book in 9th Grade, Lord Of The Flies, you've got to read that thing, beginning to end. Sure you might buy the Cole's notes or the Cliff notes afterward, but you've got to read that book, or you've got to find out what happens to Piggy in chapter 13. But now, I actually have decided to embrace my social media adult brain, and especially in non-fiction, so I'm making a non-fiction declaration here. I read a book like I'm eating at a buffet. And the book is the buffet. So if you go to a big Chinese buffet, #2019, you're like, "What are all the smells? What are all the sites? Where do I want to start first? I want to grab this slice of roast beef, and then maybe I'll throw a little dessert on the side of the plate."

Guess what? I read the back, I might check out the flap copy. I read the table of contents, "Hey, what's in the index? Do I know any of the people who study is mentioned? What do they say? What do they say about that? Oh, this chapter 14 sounds really fascinating. Let me read chapter 14 now. Ha, great context. I think I'll read the intro." And I'm almost eating the book, like I'm at a buffet, and by the way, at the end of the book, I might only have consumed 50% of the information or wisdom available. But I consider it a done book when I'm done with it. Not when it's done with me.

Ben Felix: Yeah, that's interesting. That's typically how I read books too. Do you read physical or digital? And do you think it matters?

Neil Pasricha: I do think it matters. And just to insert into that thing, there is a sub-point I was trying to make there, which is no book shame, no book guilt. This is the biggest value I have on my podcast, Three Books. It's called "no book shame, no book guilt." And you know when I tell people this? Everyone breathes a sigh of release. "You mean you don't have to have read War and Peace?" "No. You're fine to read comic books your whole life. You're fine to read young adult. You're fine to read what's interesting to you. Don't think the biggest, thickets, fattest books make you any smarter, because to tell you the truth, most people haven't got through the Jared Diamond book, if you want to be honest. Now, flash forward to your next question, here's what I do know. The research shows that if you read on a device where you can and do anything else, you will." I got that from Seth Godin. I interviewed him in chapter 3 of my podcast. He's told me that that research is very clear.

So if you read on a device like an iPad, where you can get text message alerts and notifications, that's a horrible way to read. I don't know why Oprah's going around... I'm about to get a poisoned dart in my neck here. I don't know why Oprah's going around telling people to read on the iPad, I'm sure she's getting paid by Apple to do so, but I think it's a horrible idea. Single tasking is the new multitasking. I am a real book person, because it gets you off a bright screen, but if you happen to be a Kindle person, or an Audible person, as long as you're following the adage that single tasking is the new multitasking, and you can't do anything else on your reading device, great.

Personally though, I know how much and time and effort... I just picked up a book and people can see me. They're there. I know how much time... what's the color? What's it feel like? What kind of font do we use? How big is the paper? There's so much thought into the packaging of the book, and I think we are neutering, to use the word twice that I really never use at all, we are neutering the reading experience when we make it try to fit into our devices. Get off the devices. Believe me, there's nothing like reading a real book. Personal opinion.

Cameron Passmore: I must say that's the most compelling argument for physical books that I've ever heard. It's really interesting. So over your right shoulder, you have a lot of books in your bookshelf. Do you keep all your books?

Neil Pasricha: No, I only have two, so thank you for pointing that out. This is just my fiction. I file all my books in the Dewey Decimal System. I find this very, very helpful. Inside the front jacket copy of the book, it says DDC, that number, you can download an app called Decimator, you can find... listen, there's a reason every library in the world's organized in Dewey Decimal. Then you're like, "Oh, I really need to spruce up on my knowledge of science, I have a huge gap in 593 Fungi." And I just find that it makes my knowledge pure periodic table-ish. So this is just A1354, this is just fiction. Upstairs is all my non-fiction. And I only keep two books on my bookshelf, to answer your questions. I only keep books I love and books I have not read. That wide chasm or chasm, whatever that word is, in between, books I like, books I thought were pretty good, books I thought were okay, books I didn't like so... they're out.

I only keep books I love and books I have not read. Everything in between gets going to a little free lending library, gets being sold back to a used-book store, because I want the turnaround time on my book to be very fast, and I want... this is one of my eight points in the article. I want to think of my bookshelf as a dynamic organism. I want to think of it like a living breathing thing, not a static, dust collecting piece of wallpaper.

Ben Felix: Neil. This has been great. Any last words or advice for our listeners who might want to read more this year?

Neil Pasricha: Well, I'll just close off with what I say at the end of every single chapter in my podcast, which is you are what you eat and you are what you read.

Ben Felix: Very nice

Cameron Passmore: Neil. This has been awesome. Thank you so much. Thanks for the energy, and I think you had an impact.

Neil Pasricha: Thank you guys for having me. This is a wonderful podcast and I'm really, really grateful for the work you guys are putting out into the world. Thanks so much. Wonderful being in the podcast solar system with you.