How to Take Smarter Risks in Life & The Lies You Tell Yourself

Something You Should Know

This episode explores the various ways reality is distorted, both physically and psychologically. It examines why car mirrors are engineered

Key takeaways

• Car mirrors are curved outward to provide a wider field of vision, intentionally sacrificing distance accuracy for safety.
• Economist Allison Schrager notes that while modern society is safer, increasing risk aversion among younger generations may hinder neurological development and economic growth.

Main topics

• Car mirror physics
• Generational risk aversion

Notable quotes

Objects in mirror are closer than they appear.

Conclusion

Understanding that our perceptions—whether through a car mirror or our

Transcript preview

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Use code S-Y-S-K at Monarch.com to get your first year of Monarch Core half off at just $50. That's 50 % off your first year at Monarch.com with code S-Y-S-K. Speaker 4 (1:22) Today on Something You Should Know, why are objects in that mirror closer than they appear? What's the point there? Then, we are taking fewer risks than in any time in history. Speaker 1 (1:35) It is starting to come at a cost. I've been talking to some neurologists about this, that if you grow up not taking the risks you're supposed to as a kid, a lot of sort of brain development doesn't happen. And that might be why we're seeing more risk aversion amongst young people. Speaker 4 (1:51) Also, why your cat can never enjoy dessert like you do. And you understand what propaganda is, but do you know about inner propaganda? Speaker 2 (2:01) Inner propaganda is really a set of stories that we sell to ourselves that become the beliefs that we buy into. Our brain is optimizing for what it's interested in, which is survival and stability. And the problem is, because it's our brain, therefore we don't even challenge it. All this today on Something You Should Know. Speaker 4 (2:21) A big thank you to today's sponsor, Vinted. I think most of us have what I call someday clothes. I'll wear that someday. That'll fit better someday. Someday I'll have a place to wear that. Meanwhile, it's been hanging in the closet for three years. Vinted offers another possibility. Sell it. Every day people can sell clothes they're no longer wearing and make some extra money. And they've made the process pretty painless. Take what you don't wear, list it on Vinted. Listing is quick and simple. And when an item sells, Vinted creates the prepaid shipping label for you. And importantly, there are no seller fees on Vinted. So when you sell something, you keep everything you earn. I like this whole idea because instead of clothes just taking up space, Somebody else gets to wear them and you get some money out of the deal. Your closet looks better too. I mean, everybody wins, even the closet. So maybe it's time to stop waiting for someday. Download the Vinted app for free and start listing with no seller fees so you keep everything you earn. Speaker 4 (3:38) Something you should know. Fascinating Speaker 3 (3:40) intel. The world's top experts. And practical advice you can use in your life. Today, Something You Should Know with Mike Carruthers. Speaker 4 (3:51) I'm sure you've seen that warning on your car's rearview mirrors a million times. It says objects in mirror are closer than they appear. But have you ever asked yourself, why? Well, that's what we're going to start with today. I'm Micah Ruthers. Welcome to Something You Should Know. So why would car makers deliberately install a mirror that makes you misjudge distance and then put a warning on it that objects in the mirror are closer than they appear? Well, it's because the passenger side mirror is curved outward, and that curvature makes cars behind you look smaller and therefore farther away. But there's an important payoff. You can see a much wider area next to and behind your car. A flat mirror would give you a more accurate sense of distance, but a much bigger blind spot. So engineers deliberately trade accurate distance perception for a wider field of vision. So that little warning on the mirror is essentially saying, we distorted reality a bit because it makes you safer. And that is something you should know. Speaker 4 (5:03) Risk is one of those words that sounds like a warning. That sounds risky. Usually means maybe you shouldn't do it. But think about almost anything important in life. Changing careers, investing your money, starting a business, falling in love, having a family. There's risk in all of it. And if you spend your life trying to eliminate risk, you may also eliminate a lot of opportunity. So maybe the goal isn't to avoid risk, but to get better at taking the right risks. And that may be especially important now, because my guest says, we've become increasingly risk-averse, often without realizing what the caution is costing us. Alison Schrager is an economist who studies risk. She is a senior fellow at the Manhattan Institute, a columnist at Bloomberg Opinion, and author of the book Worth the Risk. The seven myths that keep us from taking the chances we need to take. Hey, Allison, welcome to Something You Should Know. Speaker 1 (6:06) Hi, thanks so much for having me. Speaker 4 (6:08) So I find it really interesting that you say we're taking fewer risks than we used to. How do we know that? Speaker 1 (6:15) Well, it shows up in a lot of economic indicators. Anyway, we often feel like we're living in these fraught times and we see headlines about everyone getting addicted to sports gambling and all these things. The risks that really matter are actually in decline. We've become less likely to move. We've become less likely to change jobs. We're less likely to start a business. And all of this is showing up in sort of lower economic growth and actually slower wage growth. Speaker 4 (6:43) But it's a generational difference, right? It's not that overall people are taking less risks than they used to. It's just that as younger people mature, they are willing to take less risks as adults. It's a generation thing. Speaker 1 (6:59) We say that about every generation. And there's a reason we say that about every generation is because each generation is getting progressively more risk averse. I'm a borderline Gen Xer. And for some reason, Gen Xers have sort of grabbed this mantle that we're this amazing risk takers because we were latchkey children. But really, like we took less risk than boomers and millennials took less risk than us and Gen Zers take less risk. And that's partially just because as we become wealthier, as we have more technology to manage risk, we just start taking less risk. And so we see this sort of increasing risk aversion across generations. And I think it's just getting to the point, some of it's desirable. It's nice not to have a risky life. You know, I think we in some ways feel good that teenagers aren't going around causing mayhem as much anymore. But it is starting to come at a cost, particularly, oh, I've been talking to some neurologists about this, that if you grow up not taking the risks you're supposed to as a kid, a lot of sort of brain development doesn't happen. You know, like all these neural pathways that teach you how to be a smart risk taker as you get older just aren't there. And that might be why anyway, we're seeing more risk aversion amongst young people. We're also seeing them when they do take risks, not maybe taking the best ones, like for instance, sports gambling, rather than investing in an index fund. So I think what we're seeing is this combination of people, it's harder to take risks. We've set up a society in a lot of ways where it is more expensive and the downsides feel more precarious, but we're also raising generations to be more risk averse and then they feel unprepared to take on risk. Speaker 4 (8:42) You said a moment ago that if adolescents, young people don't take the risks they're supposed to, what are the risks they're supposed to take? Speaker 1 (8:50) Well, I mean, I don't want to endorse any bad behavior, but to some degree, a lot of it is just spending time with friends and doing stupid things. You know, not that they should be drinking and being promiscuous, but they're doing a lot less of that. They're certainly doing a lot less socializing. And it is a lot of the risk taking does happen in groups. And, you know, this neurologist I spoke to was saying that she's a professor at Vassar, that she sees these really under-socialized kids showing up, and then they're more likely to do, like, binge drinking because they haven't sort of taken those sort of smaller risks or more controlled risks when they were younger. Speaker 4 (9:27) Yeah, well, I have this sense about younger people today and the last couple of generations of younger people that they were brought up in a... A world where they were told to be careful. The world is a dangerous place. And, you know, when you hear that message, you are more cautious and take less risks. Speaker 1 (9:51) Yeah, and I mean, more people survive childhood now. I mean, that's good. But on the other hand... There is a cost to that. There's this sort of central truth to financial markets that, granted, people in financial markets like to pretend isn't true either, but we tend to delude ourselves in all areas of life that there's no extra reward in finance without taking on more risk. And anyone who tells you differently is defrauding you or charging you a very high fee. And that's just a hard truth no one wants to accept. But it's true in life, too. If you shut children out of risk, they're just going to get less. out of life. And I think that might be contributing to a lot of the sort of unhappiness. Younger people are taking less risk, but they're also really unhappy. And particularly the sort of lack of risks around socialization is very concerning. I spoke to a professor at Tulane who was telling me she took a bunch of the girls in her class out. And they were saying they're afraid to date. And I assumed that was driven by risk aversion, mainly about being hurt or, you know, maybe even, you know, violence or whatever. And she said, no, they're just afraid to be out on a date and have an awkward conversation with someone they don't know well. I mean, I mean, that is part of dating, unfortunately. But even that scared them. Speaker 4 (11:05) That is so strange because you know how you get better at conversation? Having conversation. Speaker 1 (11:12) Yeah, exactly. Speaker 4 (11:13) And so if you avoid it, you'll never get better at it. So how does that help? Speaker 1 (11:19) Also, yeah, I mean, a lot of the evidence for getting to be a better risk taker is, you know, it's important to take risks and have them not go well and realize, you know, it wasn't the worst thing. And then you feel better about taking risks again. So, yeah, you go and you have a bad date and you realize the world doesn't end or you realize, OK, this is how I can save this date and keep it going by being more practice at conversation. But they're just not getting these experiences. Speaker 4 (11:42) Well, that is, I think, what you just said is so important about risk-taking that often doesn't come up in the conversation, and that is by taking risks and failing, you realize it's not so bad much of the time. I mean, some risks have huge consequences, but most everyday kind of risks, it's just not the horror you think it's going to be. Speaker 1 (12:05) No, but we've set up this idea. I mean, we certainly see this with especially a lot of young people, especially I live in New York, and a lot of the kids in school feel so... And it might be just a social media thing. They feel like they're being watched and monitored. And they feel like if they have a setback, if they make a mistake, it's going to be there forever and haunt them for the rest of their lives rather than just adolescence is a time where you should be doing stupid things and making mistakes, saying stupid things. It's part of your developmental process. But they feel so inhibited for a lot of