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<v Speaker 1>You're listening to Bill Handle on demand from KFI AM

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<v Speaker 1>six forty.

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<v Speaker 2>KFI AM six forty live everywhere on the iHeartRadio app.

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<v Speaker 1>Good Morning, It's the Bill Handle Show.

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<v Speaker 2>He is on vacation, Wayne resnick in And normally we

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<v Speaker 2>love to talk to Joel Larsgard, who hosts How to

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<v Speaker 2>Money right here on KFI on a Thursday, and we

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<v Speaker 2>will talk to him on a Thursday, but he was

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<v Speaker 2>kind enough to come on today because it's the last

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<v Speaker 2>shopping day before Christmas, and you betcha there's a lot

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<v Speaker 2>of financial considerations.

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<v Speaker 1>So Joel, welcome two days early.

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<v Speaker 3>Hey, thanks for having me. Wayne.

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<v Speaker 1>So I guess let's get into this.

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<v Speaker 2>This is the last shopping day before Christmas, and what

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<v Speaker 2>do you know about the consumer feelings this year in

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<v Speaker 2>terms of how their finances are and therefore how much

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<v Speaker 2>they might be spending on presents and compare that to

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<v Speaker 2>the reality of the economic situation in this country.

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<v Speaker 4>Yeah, I mean, I think the stakes are high when

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<v Speaker 4>it comes to how people feel about what they need

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<v Speaker 4>to spend in order to have a good Christmas. And

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<v Speaker 4>I think it's important for when you look at the statistics,

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<v Speaker 4>it's kind of unnerving the amount of people that are

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<v Speaker 4>still paying off what they bought last Christmas, like they

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<v Speaker 4>still haven't caught up to their overspending from last year,

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<v Speaker 4>and maybe they're doing the same this year. Something I

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<v Speaker 4>get a third of people are still paying off credit

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<v Speaker 4>card debt from twenty twenty three, and NERDWHILET just did

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<v Speaker 4>a recent survey and they found that ten percent of

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<v Speaker 4>consumers are planning on taking money out of their emergency

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<v Speaker 4>fund to buy gifts, and that they even more like

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<v Speaker 4>something more people are going to instead of paying bills

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<v Speaker 4>that they have due, they're going to spend that on

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<v Speaker 4>Christmas presents. And so I think we're in a tough situation,

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<v Speaker 4>or at least some people find themselves in a tough situation.

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<v Speaker 4>Instead of of having the hard conversation which probably should

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<v Speaker 4>have been had weeks ago, it's tough to have that

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<v Speaker 4>conversation now. But instead of doing that with friends and

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<v Speaker 4>family and talking about financial limitations, people are spending money

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<v Speaker 4>they don't have.

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<v Speaker 2>So the thing we're used to and hearing about, we've

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<v Speaker 2>been hearing about for years and years and years are

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<v Speaker 2>people who run up their credit cards to buy things

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<v Speaker 2>that maybe they can't afford to buy otherwise. And now

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<v Speaker 2>they have big credit card debt, But you're talking about

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<v Speaker 2>something different now these people are not necessarily adding to

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<v Speaker 2>their debt load. Instead they are taking from, or possibly

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<v Speaker 2>wiping out, any contingency fund for an emergency.

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<v Speaker 3>Yeah, it's a bit of both, right.

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<v Speaker 4>And the other thing is now they're even more unique

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<v Speaker 4>ways to pay for the items you want. There's buy now,

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<v Speaker 4>pay later, which I think people are more reliant on

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<v Speaker 4>this year than ever before. It's kind of become we've

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<v Speaker 4>normalized it so and people are instead of buying something

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<v Speaker 4>put on a credit card and not paying it off,

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<v Speaker 4>they're buying more things than they otherwise would because it

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<v Speaker 4>just seems less egregious to do it via buy now,

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<v Speaker 4>pay later, to just pay it in installments. But the

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<v Speaker 4>truth is then you spend even more than the otherwise would.

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<v Speaker 4>There's data about that about how big the shopping carts

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<v Speaker 4>balloon when you don't have to pay for it all

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<v Speaker 4>in one lump sum. So people are more reliant on

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<v Speaker 4>that than ever before too. And the more reliant you

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<v Speaker 4>become on future funds to pay for current purchases, the

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<v Speaker 4>worse of a financial position you're putting yourself, and you're

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<v Speaker 4>putting yourself behind the eight ball. So I guess yeah,

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<v Speaker 4>since we're basically at we're almost to Christmas, I just

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<v Speaker 4>want people to realize and to note you don't feel

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<v Speaker 4>like you have to go out and overdo it and overspend,

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<v Speaker 4>and in fact, if you feel like you have done that,

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<v Speaker 4>you might want to save some of those presents, hold

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<v Speaker 4>them back, make some returns.

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<v Speaker 3>And I swear it's not going to ruin your Christmas.

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<v Speaker 4>The Christmas season is about so much more, even though

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<v Speaker 4>in this country we've made it incredibly consumeristic, there's so

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<v Speaker 4>many other beautiful things about this season. And I know

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<v Speaker 4>it can feel demoralizing, or it can make you maybe

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<v Speaker 4>feel like you're not enough, you're not living up to

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<v Speaker 4>expectations of your kids, or your spouse or the rest

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<v Speaker 4>of your family. But I think it's really important to

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<v Speaker 4>not harm your finances for years to come based on

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<v Speaker 4>one special day.

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<v Speaker 2>So you already brought up one thing I wanted to

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<v Speaker 2>ask you about. I'm fascinated with the psychology of this phenomenon,

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<v Speaker 2>and what I can't tell is this. You just talked

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<v Speaker 2>about people feeling pressure in essence, performance anxiety. If you will,

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<v Speaker 2>it's about giving enough presence Okay, so I thought, well,

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<v Speaker 2>one reason you would drain your emergency fund to buy

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<v Speaker 2>presence is because you feel a big obligation to do it,

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<v Speaker 2>which would mean and this is where I need you

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<v Speaker 2>as the reality test. That way of thinking is basically,

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<v Speaker 2>these are people who who know that they're doing something

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<v Speaker 2>financially irresponsible. They know it, They are well aware there

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<v Speaker 2>will be consequences, or at least it's likely there will

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<v Speaker 2>be consequences, but they do it anyway because of the

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<v Speaker 2>pressure that they feel.

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<v Speaker 1>Is that the idea.

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<v Speaker 4>I definitely think there are a lot of people that

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<v Speaker 4>fall into that camp where they're doing it because it

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<v Speaker 4>feels like, well, that's how you show people that you

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<v Speaker 4>love them on the holidays, or they normalize a certain

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<v Speaker 4>amount of spending for the holidays, they see other people

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<v Speaker 4>do it. The commercialization of Christmas has kind of gotten

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<v Speaker 4>to them, and they bought into it, and I totally

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<v Speaker 4>understand that. In fact, there was another article I read

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<v Speaker 4>the other day just about how people feel there's a

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<v Speaker 4>higher percentage of Americans now been shopping and they feel

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<v Speaker 4>like they're addicted to shopping, and that's disconcerting. Also, I

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<v Speaker 4>think all of the technological tools and the algorithms at

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<v Speaker 4>the disposal of TikTok and Instagram and Amazon are kind

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<v Speaker 4>of fueling us towards spending more and normalizing it, and

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<v Speaker 4>so we feel compelled to spend more, even if we

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<v Speaker 4>deep down we know that it's it's not best for

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<v Speaker 4>us and that we're digging ourselves a deeper hole.

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<v Speaker 1>So that's one aspect.

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<v Speaker 2>But here's a different kind of person who might be

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<v Speaker 2>taking all the money out of their emergency fund and

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<v Speaker 2>buying presents. And this would be the person who doesn't

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<v Speaker 2>think they're doing anything financially irresponsible because they have such

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<v Speaker 2>optimism about how they will be able to replace that

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<v Speaker 2>money soon enough. That would that be the rose the

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<v Speaker 2>rose colored glasses people who are saying, look, I can

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<v Speaker 2>afford to do it now, because I don't know what

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<v Speaker 2>they're thinking specifically, I'm going to get a raise, I'm

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<v Speaker 2>going to get a better job, inflation's going to go away,

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<v Speaker 2>whatever it is, but I'm going to just replace that

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<v Speaker 2>money and three months from now we'll be back to

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<v Speaker 2>where we were anyway.

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<v Speaker 4>Yeah, I definitely think there's some of that as well,

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<v Speaker 4>and that's why you see people in January oftentimes try

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<v Speaker 4>to cut back and push more money towards paying off

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<v Speaker 4>that debt that they accrued. But I also think that

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<v Speaker 4>that's probably not a great way to go, is to

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<v Speaker 4>dig yourself in a hole and hope that you can

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<v Speaker 4>fill that hole in in the coming months. I guess

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<v Speaker 4>that would be because you just never know what other

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<v Speaker 4>emergencies are going to come along. And that's really what

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<v Speaker 4>like when I talk about people tapping their emergency fund

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<v Speaker 4>to pay for gifts, that the emergency fund is not

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<v Speaker 4>for that, right, it is for the unforeseen unexpected. And

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<v Speaker 4>that's why, at least for like twenty twenty five Christmas,

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<v Speaker 4>I want people to start to think about starting something

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<v Speaker 4>called a sinking fund, where you're funneling money in every

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<v Speaker 4>single month. Let's say you're like, I want to spend

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<v Speaker 4>you know, eight hundred dollars next Christmas on gifts for

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<v Speaker 4>my friends and family. Then I'm going to start setting

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<v Speaker 4>aside seventy bucks a month, every single month.

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<v Speaker 3>In preparation for that.

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<v Speaker 4>These are things that it's I know it's not easy

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<v Speaker 4>to have that foresight, like, but it's really crucial if

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<v Speaker 4>you want to have if you don't want to, if

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<v Speaker 4>you want to kind of avoid that future come next

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<v Speaker 4>year to start planning about that for that early. But yeah,

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<v Speaker 4>I think there are some people who basically just like

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<v Speaker 4>don't think it's as bad as it actually is, or

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<v Speaker 4>maybe they're assuming that everything is going to go just

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<v Speaker 4>fine in the first few months of the year and

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<v Speaker 4>they'll dig themselves out quickly. But that just might not

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<v Speaker 4>be the case because you never know what's coming down

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<v Speaker 4>the pike.

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<v Speaker 1>All right, Joel, thank you so much.

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<v Speaker 2>We're going to talk to you again Thursday at the

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<v Speaker 2>normal time about some other personal finance stuff, and in

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<v Speaker 2>the meantime, check out the podcasts of your show How

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<v Speaker 2>to Money and listen to it live when it airs.

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<v Speaker 2>You're on Sunday noon to too.

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<v Speaker 3>Sounds good, Thanks Wayne.

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<v Speaker 2>There was there was an implied question mark at the

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<v Speaker 2>end of that sentence, even though it didn't sound like it.

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<v Speaker 1>Yes, and of course you're on social media at How

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<v Speaker 1>to Money, Joel, Joel.

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<v Speaker 2>Lars Guard, everybody, Thank you sir, talk to you on Thursday.

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<v Speaker 3>Of course. Sounds good, looking forward to it, all right.

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<v Speaker 2>Do you know about Nike ID. This is where you

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<v Speaker 2>can completely customize the shoe and you get a personal

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<v Speaker 2>ID for the shoe that can be any combination of

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<v Speaker 2>letters and numbers when that had when Nike came out

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<v Speaker 2>with that. This is not an ad for Nike. When

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<v Speaker 2>they came out with Nike ID. Some people will buy shoes,

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<v Speaker 2>make them for themselves, and others will customize a shoe.

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<v Speaker 1>As a present.

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<v Speaker 2>Now, nobody thought when they came out with this that

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<v Speaker 2>it would reveal deep insights about human psychology and gift giving.

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<v Speaker 2>But here comes a study from the journal Psychology and Marketing,

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<v Speaker 2>and it doesn't have to do specifically with Nike shoes.

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<v Speaker 2>It has to do with giving somebody any kind of

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<v Speaker 2>personalized gift and what that does in their brain. And

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<v Speaker 2>the bottom line, I'll just flip all the cards and

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<v Speaker 2>then I'll tell you how they found out. When you

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<v Speaker 2>give somebody a personalized gift, this could be a journal

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<v Speaker 2>with their name inscribed on it. It could be a

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<v Speaker 2>chocolate bar. There are places where you can have a

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<v Speaker 2>chocolate bar made with the exact combination of flavors that

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<v Speaker 2>you specify. Anything like that, they appreciate it more and specifically,

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<v Speaker 2>it causes something called simulation.

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<v Speaker 1>Emotional simulation.

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<v Speaker 2>Simulation theory is that people can recreate mentally other people's

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<v Speaker 2>experiences and emotions. You know, how your uncle the sports

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<v Speaker 2>fan and when his team wins, he acts like he

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<v Speaker 2>was in the game because he can mirror how the

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<v Speaker 2>team must feel. Or you've seen the parent and their

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<v Speaker 2>kid was in the school play, and oh my god,

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<v Speaker 2>they pride about the kid in the school play because

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<v Speaker 2>they are mirroring how the kid feels about doing a

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<v Speaker 2>good job in the school play. So when you give

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<v Speaker 2>somebody a personalized gifts, you usually feel really.

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<v Speaker 3>Good about it.

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<v Speaker 2>You feel a sense of accomplishment that you made a

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<v Speaker 2>specialized gift or bought I mean, you didn't necessarily make it.

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<v Speaker 2>And then the receiver taps into your sense of pride

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<v Speaker 2>about how you handled giving them the gift. And they

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<v Speaker 2>did four different studies. One of them they took they

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<v Speaker 2>had people give people a piece of personalized clothing, and

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<v Speaker 2>they also had people given regular clothing. And then they go, hey,

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<v Speaker 2>look at all this stuff you have. You have this shirt,

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<v Speaker 2>you have this shirt that's got your name on it.

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<v Speaker 2>Tell us what you would change about all these things.

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<v Speaker 2>And sure enough, they had very few ideas for what

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<v Speaker 2>they would change about the personalized gift. They had a

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<v Speaker 2>lot more ideas about what they would change on the

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<v Speaker 2>non personalized gift. That was one of the experiments they did.

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<v Speaker 2>The next thing is they compared They showed videos to people.

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<v Speaker 2>One of them is making a custom T shirt and

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<v Speaker 2>the other one is a video.

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<v Speaker 1>This talk about a boring video.

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<v Speaker 2>It's a video of somebody going online and browsing for

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<v Speaker 2>a T shirt and just selecting a generic T shirt

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<v Speaker 2>to buy. And even when they took into account how

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<v Speaker 2>long was spent doing these things customized presence more appreciation. See,

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<v Speaker 2>it used to be the amount of time that you

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<v Speaker 2>spent selecting the gift. We thought, oh, that really shows

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<v Speaker 2>you care. If you spent an hour thinking about what

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<v Speaker 2>could I get this person, that meant you really cared.

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<v Speaker 2>But now it turns out you don't have to spend

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<v Speaker 2>a lot of time. You can just go to things

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<v Speaker 2>remembered and go give me that and put that on it.

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<v Speaker 2>You didn't spend any time at all. But it's personalized

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<v Speaker 2>and the person that you've given to it's gonna love it.

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<v Speaker 1>So that should reshape.

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<v Speaker 2>I guess if you're looking to get maximum response and

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<v Speaker 2>maximum good feels from your gifts, really, I guess think

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<v Speaker 2>about personalizing or customizing the gift, which they expect to

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<v Speaker 2>grow to a thirteen billion dollar industry in the next

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<v Speaker 2>three years, the customized gift market. So that's probably the

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<v Speaker 2>way it goes. Now for me, here's the way I

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<v Speaker 2>consider it. Give me cash, and I feel like it's

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<v Speaker 2>already personalized because each bill has a unique serial number

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<v Speaker 2>on it.

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<v Speaker 1>Good enough. Should cops be able to lie? Okay? Yes?

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<v Speaker 1>But also no, here's the yes.

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<v Speaker 2>Let's get this out of the way as an example

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<v Speaker 2>of how cops absolutely one hundred percent should be able

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<v Speaker 2>to lie and must be able to lie. And that

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<v Speaker 2>is the classic are you a cop? You have to

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<v Speaker 2>tell me if you are. First of all, that is

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<v Speaker 2>not true, and it's a good thing it's not true

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<v Speaker 2>because there are all kinds of investigations that could never, ever,

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<v Speaker 2>never happen if it was as simple as saying, are

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<v Speaker 2>you a cop?

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<v Speaker 1>And that's the end of the investigation.

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<v Speaker 2>Into your drug dealing or your sex trafficking, or you're

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<v Speaker 2>anything odometer rolling back, or you're dumping of illegal chemicals

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<v Speaker 2>into the river or anything. So that's an example of yes,

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<v Speaker 2>of course, cops should not have to tell you their

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<v Speaker 2>cops if they're working under cover.

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<v Speaker 1>But what about.

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<v Speaker 2>This, This is the story of time Thomas Perez times two,

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<v Speaker 2>Thomas Perez and Thomas Perez J. Thomas Perez went missing

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<v Speaker 2>and for some reason, the Fontana police decided that Thomas

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<v Speaker 2>Perez J. Was a was a suspect into possible bad behavior.

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<v Speaker 2>And even they decided for themselves that he had killed

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<v Speaker 2>his father. So they bring him in for an interrogation

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<v Speaker 2>for hours hours, and of course he said, I didn't

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<v Speaker 2>do anything, and cops don't believe that. And then they

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<v Speaker 2>told him that his father was dead. They told him

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<v Speaker 2>about his father's body on the slab in the morgue,

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<v Speaker 2>and then they kept interrogating him for hours and hours,

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<v Speaker 2>and finally he admitted that he had killed his father.

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<v Speaker 2>Then he tried to hang himself. Luckily it was not successful.

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<v Speaker 2>But guess what, he didn't kill his father. Guess what,

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<v Speaker 2>nobody killed his father. His father was alive. His father

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<v Speaker 2>was found alive and well. Several hours after this young

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<v Speaker 2>man tried to hang himself after being coerced into falsely

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<v Speaker 2>confessing to killing his father, probably honestly to a great extent,

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<v Speaker 2>just because they had him there for hours and hours

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<v Speaker 2>and they wouldn't let up. But telling him his dad

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<v Speaker 2>was dead definitely pushed him over the edge. Now, that's

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<v Speaker 2>perfectly legal for cops to tell you your father's dead

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<v Speaker 2>when they have no reason to think he's dead, and

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<v Speaker 2>in fact he's not dead, and it is allowed, and

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<v Speaker 2>it is allowed as part of a technique that has

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<v Speaker 2>been in place for quite some time called the Read technique.

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<v Speaker 2>And the Read technique of interrogation was put together by

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<v Speaker 2>a guy named John Reid, who was a Chicago cop

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<v Speaker 2>and a polygraph expert, which is now we now know

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<v Speaker 2>being a polygraph expert is like being an expert in astrology.

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<v Speaker 2>But he was, and another guy, fred Enbow I believe

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<v Speaker 2>his name was, he was a criminologist. Anyway, they put

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<v Speaker 2>together this the Read technique where.

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<v Speaker 1>And it's not as bad.

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<v Speaker 2>Well, hold on, I'll tell you what it's not as

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<v Speaker 2>bad as in a second. So it has three steps.

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<v Speaker 2>The first two are totally good, gather evidence, talk to

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<v Speaker 2>the people involved in a non confrontational interview designed only

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<v Speaker 2>to get information. But then step three, anyone you think

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<v Speaker 2>is guilty, boom, get them, interrogate the but Jesus out

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<v Speaker 2>of them. And one of the things you're allowed to

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<v Speaker 2>do is lie. Now, you can't lie about anything you want.

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<v Speaker 2>You can't lie. For example, if you say we have

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<v Speaker 2>your DNA on the body, you can and you don't.

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<v Speaker 2>You can't say that. But this kind of thing like

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<v Speaker 2>your father's dead, your friend has already said that you

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<v Speaker 2>did it totally fine. And therefore the read technique causes

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<v Speaker 2>quite constantly false confessions.

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<v Speaker 1>Now I said it wasn't as bad as something I

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<v Speaker 1>guess it's not as bad as what it replaced. You know, the.

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<v Speaker 2>Phrase give them the third degree, they gave them the

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<v Speaker 2>third degree, or don't give me the third degree? That

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<v Speaker 2>actually comes from a police tactic. In the early parts

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<v Speaker 2>of the twentieth century. Police officers would routinely beat the

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<v Speaker 2>hell out of suspects, not let them have food, water

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<v Speaker 2>the bathroom, not let them sleep, keep them in confinement

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<v Speaker 2>for days at a time.

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<v Speaker 1>It was illegal.

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<v Speaker 2>It was illegal, but it happened a lot, and as

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<v Speaker 2>you might imagine, a lot of people confessed to things

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<v Speaker 2>just to make it stopf I Am six forty Live

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<v Speaker 2>everywhere on the iHeartRadio app.

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<v Speaker 1>You've been listening to the Bill Handle Show. Catch My

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<v Speaker 1>Show Monday through Friday six am to

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<v Speaker 2>Nine am, and anytime on demand on the iHeartRadio app.