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#9 - The Fear Factor with Dr. Jane Cox

Transcript from interview #9 - The Fear Factor with Dr. Jane Cox

Nicole:   0:04

Welcome to the I ALSO Want Money podcast, where our mission is to democratize, demystify and demasculinize making money. I'm your host, Nicole Kyle, and I'm here with my co-host, Sophie Holm and ally, Harrison Comfort.

Nicole:   0:27

Harrison, Sophie, you guys know this about me, but one of the reasons it took me so long to get started investing and even still... I'm not super sophisticated with it yet. But the reason it took me so long is I'm afraid. I'm afraid of losing money. I'm afraid of making a mistake. And that fear definitely creates the sense of inertia, right? It's very real. And getting started with investing is hard as a result. So that's why I'm really excited to have Dr. Jane on the podcast today. I know she's going to talk us through ways of overcoming that inertia. She is going to talk to us about the link between confidence and investing. I think I'm really excited to hear her talk about how starting small is the best way to get started.

Sophie:   1:11

Dr. Jane, thank you so much for being with us here today!

Dr. Jane Cox:   1:14

It's an absolute pleasure to be here.

Sophie:   1:16

So we know women aren't as active in the investing space, and as active in growing the wealth as they should be. We've also been exploring throughout this podcast, how society has conditioned us to be okay with that. From a psychological perspective, Dr. Jane, why is that the case?

Dr. Jane Cox:   1:38

The thing that awoke me to this and I am somebody who is a psychologist, and it was before I kind of got particularly involved in financial psychology, is I was married and I thought I was relatively happily married. I was a good income owner. My ex husband was a good income owner. All was well, and as you do, you get very complacent in marriage. All the money went into his bank account. That's just how it was. Anyway, for various reasons I left him, and that was it. Within half an hour, he had taken my name off bank accounts, signing powers, off everything, and I literally walked out of a marriage with only money that was sitting in my purse and two very, very small children. And I remember thinking, wow, okay... I know I'm going to be earning money, but at that stage, I had literally been taken so by surprise. There was no forward preparation financially. I mean, it just never dawned on me, especially as I had ordinarily earned more than him. It was literally that, even that three or four weeks until my next salary check came through, that was an absolute nightmare. And suddenly I had walked away from the family home, had walked away from all of our assets, everything, and literally was starting from scratch with two little children. And I remember thinking you never thought you'd be in this situation. But sometimes we have to plan assuming the worst, and then be very happily surprised when everything turns out for the best. I'd rather be over prepared and not need it. As women, we've almost got an extra obligation because we know that for many of us we are going to interrupt our career, and we need to make those plans as well as  the normal plans that most of the men around us need to make. And generally speaking, if you are going to be a single parent, very often, still, it's a woman who ends up being a single parent and has that responsibility, as well. So it very, very quickly woke me up to the fact that I needed to not be complacent. But I think the thing is that what happens is I was in a position where I didn't have the luxury of time and I didn't have the luxury to feel the fear of how I was going to do this. I had to make a plan. I had to strip away all of that uncertainty and, oh, do I know enough? I had to just get on with it and do it and literally learn by hands-on experience. And I think actually, that was the best thing that ever happened to me and very often, the best thing that happens to women when it comes to their financial planning is getting a huge, big wake up call and going whoa.... I need to step up and take control. What I do find is that complacency comes in with women who haven't yet been in that situation, and it's not that they don't want to plan. It just has never dawned on them.

Sophie:   4:23

The sentence, or the quote, do I know enough? How do we break that mental barrier down?

Harrison:   4:31

Because as a guy,  sometimes when it comes to investing, there's a culture of just do it and figure it out later. 

Dr. Jane Cox:   4:39

Yeah, I think you're exactly right. And it's not helped by the fact that us women, and I'm sure it comes from the fact that we always feel responsible for everybody, and unfortunately, I think the perception is a little bit like financial advisors are like car repair people. They see women... there's the oh, she doesn't really know that much, so maybe this is my opportunity to do something a little bit less kosher, shall we say. Whereas with men I think there is that, okay... don't take advantage of me because you and I are going to look each other in the eye, and we're going to make sure that we do this as right as we possibly can. And I think you're right, Harrison. I mean, men don't go into investment just because they know all about it. They go into it thinking I will learn about it, as I do it. For women, it should be exactly the same.

Nicole:   5:33

Yeah, I think what you're talking about there is the risk aversion that plagues so many of us. Do you have any advice for overcoming that risk aversion?

Dr. Jane Cox:   5:43

I worked with a  manager when I was very young. I was literally 17 or 18, and I remember sitting having lunch with him, and he was saying that he had always advised his daughter from the minute she earned her first salary check as a part- time waitress to put 10% aside and save it. And that if that's all that she did for all of her life, she'd find her life was so much easier. And I remember thinking, oh, wow, what a wonderful idea. Anyway, I got to meet the daughter and it was a wonderful idea. I literally watched a woman who was able to buy a house in her own name, in cash in her early twenties, and who had developed that saving mentality. But I think what was interesting talking to her was her dad hadn't just said, listen, stash it under a mattress and maybe one day you can whip it up, do something with it. He'd gone: why don't you try this? Why don't you try that? And what he done is gone... You know what? So let's imagine you're waitress... you know, 10% of your salary as a waitress is £100 a month, right? Split it into five parts. What are you going to invest that £20? What are you going to invest that £20 in? Literally test the waters. See how all of these different markets, or different investment ideas performed. Put that one in a bank. Put that one in a unit trust. Invest that one in stocks or shares. Stick that one under the mattress and see for yourself what works best for you on. And just so happen, her specific interests were very much, once again in South Africa, around wines and cheeses, and all of these sort of luxury products. And she started investing in startup wineries and thing like that because she was given the power very early on to trust her intuition and go with something that she loved, and therefore she was able to take real interest in her investment because it was in areas that she was interested in. And that's an interesting way of doing it. I think we've got to piece of the conversation we probably need to be dealing with here one: how we're going to overcome our psychological barriers and, two, how we can raise our children to not have those psychological barriers in the first place.

Harrison:   7:53

How big is trusting your intuition when you find something that you think is a good idea in terms of getting over the fear of making an investment?

Dr. Jane Cox:   8:02

I think women are very tuned into their intuition as a matter of course. And I think we tend to trust our intuition more when we go, oh... I'm not sure about that person, or I'm not sure about that investment.

Nicole:   8:16

If someone tells me to follow my intuition when it comes to finances, I'm not doing it. 

Harrison:   8:23

But does your intuition ever tell you, hey, this could be a good thing? Or is it always this investment is just terrible?

Nicole:   8:30

No, no. What I'm saying is... I think you need a baseline sense of literacy in something before you can have intuition about it. Like, for example, I have intuition about hiring decisions because I work with people every day, But I don't have intuition about stocks because I don't have a lot of exposure at this point. 

Sophie:   8:48

I think that's a great point. I think you need some baseline exposure and some experience with something before you can have an intuition.

Dr. Jane Cox:   8:56

But it's an interesting thing that you said Harrison, because I think we forget to look at when our intuition is going, oh that actually does sound like a good idea. Or maybe this is somebody that I can listen to and I can trust. So once again, it is overcoming that caution, which we have, but we tend to use it against ourselves sometimes.

Nicole:   9:18

Jane, I love that story about your manager's daughter because it signals two very important things. The first is starting small is OK, and that's one of the best ways to get started. And secondly, it signals to invest in things you're interested in. It'll be more fun that way, you will be more engaged, and it kind of says to me, we don't have to invest the same way the guys do, or we don't have to invest like anyone else. Invest in a way that's interesting and fun for you.

Dr. Jane Cox:   9:44

Absolutely. And the thing is... I mean, there are so many different places that you can put your money. You can invest in hard assets, you can invest in stocks or shares. You can invest in all sorts of different various bank accounts and savings accounts. You can invest in start up businesses. You can invest in so many different areas. But if you invest in areas that really don't resonate with you, you're always gonna have that fear attached to that money, or you're just not going to bother to track it because you just think I don't understand it, so I hope somebody's keeping an island, making sure that I've got something at the end of this five year or 10-year period or whatever it is, you've decided to sort of invest in that area. If it's something that you can be [sufficiently] interested to go, wow, this is an interesting area. Oh, my goodness, it does seem to be doing well. And it becomes a fun thing to do. We always talk about having your money working for you, but how wonderful to watch your money working for you.

Sophie:   10:36

Yeah, I think that's a great way to get into the mindset of investing and starting to get familiar with some of the terminology that is used in the industry. Personally, I recently have been getting really into the photography market and made two investments in that space, which I'm really, really excited about. But it definitely helps think about alternative routes, and get me excited about some of the more less traditional investment options out there. Jane, how does understanding our psychological and emotional why behind our decisions, how does that help us on our investment journey and our risk approach?

Dr. Jane Cox:   11:23

I think our why decisions are important for every journey that we ever take. Once we understand why we're making any decision or taking any actions in our lives, we're going to embrace it and do it differently because we're doing it from... we're internalizing something. So what we want to be doing with investment, we want to internalize our need to invest. We want to understand why we're doing it. I know you are talking about your I also sort of theme, and I think you know what's my I also theme? And my thing is that I want to make my life decisions from a place of financial ease. You make decisions very differently when you're not desperate about those decisions, when you're doing it from a place of personal security. So largely, our confidence as people is linked to our financial security. It's just how we are, because we're programmed to be providers... we are programmes that way. So if we can understand that our why for making sensible financial investment decisions is not just to have that financial security, but to build our own sense of self, our own sense of self esteem, our own self confidence. If you've made some great investments and they're really paying off, I promise you feel a million dollars about yourself.

Sophie:   12:44

When you went through some of those financial hardships, and you were entering into your journey to become financially independent, how important was community and conversation in that journey?

Dr. Jane Cox:   13:00

When I started.... okay, I have to make my own life more financially secure. I didn't really have anybody to talk to, so it was literally me in the wilderness, trying to kind of figure out where I'm going and what I'm doing, But it's a very interesting thing because as I started making little forays, little steps into that arena, I was meeting more and more people who shared my ethos, male and female, every age group. But I was meeting people who weren't afraid of their own money. And that was a very, very key ingredient. I was meeting people that weren't going, oh income,  oh expenditure,  oh my God! they were literally embracing money and they were going, oh, my God, yes, I do this with my money, and I do that with my money. And suddenly money stopped feeling scary, and started feeling like a tool. That's all it is. It's a tool to utilize and make life better for yourself. or to not make life better for yourself. And it was... it was the conversation... it was mixing with people who knew more than I did, and could share their knowledge and share their expertise and share their life experiences. that made me feel more confident with my approach to my money and to realize that actually, yes, it is a tool. All of us can earn it. Money is out there to be earned every single day. It's actually lying on the streets. We just have to know how we're going to choose to pick it up, what particular career part we're going to use to pick that money up on. Once we've picked it up, where do we put it? It's in our hands. We can spend it. We can save it. We can burn it, if we like. But it's such an exciting thing to think oh my God, look at this incredible raw material that money is... what am I going to create with it? And that's what it becomes. It becomes something exciting. It becomes something you could be as creative as you like about. It starts generating its own excitement, which I never ever thought I would have. I always thought money would be a, spend this, save this, be careful here, be careful there. And instead it opened my eyes to the fact it's a playground.

Sophie:   15:04

How do you know when you have enough money to step into that playground? And just a side note, I wish there was more money laying around in the street, just going to get the groceries. Picking up a couple of hundred pounds would be awesome.

Dr. Jane Cox:   15:20

It is there. It just needs to be picked up by you, and you'll find your ways to pick it up. But I think the thing is,  the everything we do is we go, okay, how much will I need to have in my bank account to comfortably retire, knowing that I never have to rely on anyone, nor any potential state pension or anything like that? What do I need in my bank account? And exactly what you said, it depends on your lifestyle, it depends on your expense base. We've all got a different number, what that magic number is. But what we do is we sit there going... okay, well, if I had £2 million in the bank, I'd feel very comfortable and very secure. Wow. Over the last three months, I have managed to save £1,000. I'm a long way short of this lofty goal that I have, and so we almost feel like we have to have a minimum amount before we can be serious about money. But it's like any set of stairs... to get to the top of the stairs. You're gonna take the first step and then you have to take the second step. Then you got to take the third step. And you know what? If you end up retiring and you've got £500,000 in the bank and not two million, I guarantee you're gonna feel a whole lot better than having no thousand pounds in the bank because you never took that first step.

Nicole:   16:31

Do you have any advice for how to stop psyching ourselves out of investing? I know., for me, that happens all the time. There's this mental calculus in my brain about, is the risk of failing worth the effort to put in and the chance of having a reward? And, I think that really just results in me procrastinating, right? I procrastinate on starting my wealth journey because I'm scared of failing.   

Dr. Jane Cox:   16:58

If you decide you want to learn a new language, or you want to learn how to play a musical instrument, you're not gonna sit and do it 24 hours a day, and think, oh my God, this is a huge, big, onerous thing that I'm doing. You think, well if I learned 10 new words a day by the end of the week I'm going to have 70 new words. If I learned one scale on the piano this week, then I understand that scale, that scale, and that scale are going to be something I will have accomplished and understood before the end of the month. So it's not about setting aside a whole lot of time. It's about taking an amount of time, all the time. And we do waste so much time on distracting behaviours. Read some articles, speak to some people, join Twitter accounts, or join forums that are full of people who are thinking the same way. Not necessarily investment experts, because you'll feel intimidated and kind of unwelcome. And it's gonna be your perception, not their perception.

Sophie:   17:55

Dr. Jane, thank you so much for being here with us on this podcast today. We really enjoyed it and appreciate your time and insights.

Dr. Jane Cox:   18:04

It's an absolute pleasure talking to all of you. And I look forward to talking to you again sometime soon.

Sophie:   18:13

I really liked her point around women being programmed to be providers. It just makes a lot of sense, and it really helps you contextualize and put things into perspective.

Nicole:   18:23

Yeah, and it's interesting because society tries to gender this notion of provider, right? But I think Jane's point is such a good one around, women need to embrace their provider-ness and start investing.

Sophie:   18:36

I agree. And the other big one, for me here is... just how important your confidence level, or how much it's affected by increased financial literacy. So I definitely felt that starting my own journey. Getting involved, and  starting to invest, and starting to make my money work for me, it definitely has impacted my overall confidence levels.

Nicole:   19:01

Yeah, and the last point I'm really taking away is that starting small is OK. And you know, we can't wait for these huge catastrophic events to start. We've got to start now.

Nicole:   19:12

Thank you for listening. If you like what you're hearing, join us in the #IALSO movement. This means, take to your social platforms and post a #IALSO  statement. Follow us on Instagram at IALSO podcast. And, of course, subscribe. This podcast is produced by Harrison Comfort, and the theme tune is by Malin Linnea.

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