
A journey of a thousand miles must begin with a single step. Laozi
My job is all about money, asset, time and money allocation, how to keep or spend money. One main takeaway is, 90% of your reading should not be related to the finance world. By understanding the sociological part of finance, which proves the irrationality, we start to look at money from a different point.
I plan to write a series of articles about personal finance for Alpha Community, but before that, I will want you to focus on yourself first, instead of money. Because that’s the only way to start solving your money problems. It’s always about you.
The book, The red pill, wrote by a Russian psychiatrist Andrey Kurpatov, can best help us understand why we are the problem in front of money. This book explains pretty well our functionality between our brain and consciousness. By understanding some core principles can help us among different parts of our life including personal finance. By solving the misconceptions and contradictions that we have, we will come to the root of the problem and be able to solve it from inside.
Just to give a simple example to clarify our brains are full of contradictions. People that want their cyberspace to be as private as possible. People do not want to be monitored by big companies at the same time having the whole house connected with assistants, all their banking details being saved in the phone or browser and just surrounded by all kinds of devices that collect personal data.
It is completely normal that our brains allow those things to happen because most of the time those two opposite views don’t clash if you don’t think it through. But it doesn’t make it good.
An example of a personal finance contradiction might be the ease of payment. Now by your phone, you order the taxi, pay for groceries, use public transport and others, easy right? But then when you go and try to budget your things, you are wondering where the money went. Your brain does not make the connection between, oh wow so easy to pay for things and get them instantly, which increases your happiness hormone, and how come I don’t get any savings. The only way out of this contradiction is you inventively clash the two ideas, make your brain see that your uncontrolled quick spending is the cause of a hole in your savings.
The name of the book, red pill, yes it’s taken from Matrix when Neo is offered the choice of red pill or blue pill. The author makes it clear that to choose the red pill which will show you the truth, you have to take it and normally this pill is bitter and hard to swallow, and you have to go through a hard process of internal changes, and if you are not ready you take the blue pill which is actually given, you will just wake up and think that whole thing was a dream.
The author goes on explaining a short plot of Matrix and explains that it contains one of our main childhood biases, that there is a hero somebody that is going to come and save us. This comes from childhood when we waited that somebody will always come and have our back. That is why we like superhero movies, where one person saves the world because most of us truly want to believe that in a hard moment somebody will come and save us.
But in reality nobody will come and save you, you have only your life and that’s about it. You will leave X amount of years nobody knows how many, and you will live it the way you will live it and then poof, it’s over. Not very long and not very interesting journey, how you will live this life is your own problem, nobody truly cares about that. You can be upset with this idea or go up to breaking the plates, it’s your choice to do that, but nothing will change.
If you don’t fix yourself first, your relationship with money will never be healthy.
If the words from above made you feel uncomfortable or even maybe scared, it means you still have the possibility to change your way of looking at things, but it is only a chance. So that’s why the book got me, all the questions that are brought shatter some of our beliefs, we thought that we are mature because we stopped believing in Santa and Tooth Fairy, but here we are still full of dreams.
While reading through the book I had a straight reminder of a scene from a popular cartoon BoJack Horseman.

Bojack’s friend was telling him, “you can’t keep doing shitty things and then feel bad about yourself like that makes it okay. You need to better.”
After Bojack tries to explain that he did badly because of some bad events, but now it passed and everything will change.
Then his friend continues by saying “ BoJack, just… stop. You are all the things that are wrong with you. It’s not the alcohol or the drugs or any of the shitty things that happened to you in your career or when you were a kid, it’s you! Alright? It’s you. …Fuck, man. What else is there to say?”
Give this dialog a good read, give it a good thought, if it makes you feel sad, you do know what your problems are, and maybe you feel that way because you know that you have been hiding behind some excuses. It is you as a person responsible for everything you do. Do not blame anyone else, it is you. You need to be better.
Of course, your boss is an idiot, and your husband or wife is annoying and not appreciating how great you are, and friends that are doing better is because they got lucky, and only you have to go through hard times and nobody gets how hard your life is.
But if we will be honest, if your boss is such an idiot and you know better than him, why you are not the boss? Why you don’t leave that job? Because if he is so bad then this company is a sinking ship. Go open the same type of company you can kill the rival company if you are so capable. If your husband or wife doesn’t appreciate how good you are, why did you choose them? Where were your eyes at that time? Or maybe you are not that great?
Then you will ask me: what should I do to become better???
The truth is, there is no point giving step by step guide. The best takeaway from this book is we cannot have one guide that will apply to all of us. I cannot stress this point enough about understanding things for yourself. Even though we are very similar in general aspects in details we quite differ. There is no quick guide for anything, how to get rich, how to be in good body shape, how to get a better partner or kid, how to sort your own relationship with money.
So that’s why this book is very interesting. It does not give us an easy answer. One of the key ideas in this book starts with a saying from a Russian philosopher. In death and understanding, we are totally alone. We die alone and can understand something alone, nobody for us will die or will be able to understand anything for us.
Then he proceeds to explain the difference between knowing and understanding things because a lot of us know a lot of things but most of us use the knowledge to hide from it; few use it to truly change themselves. The book doesn’t contain simple and easy steps like do this and everything in your life will be amazing because the process of understanding its individual, the only thing that author gives us is the glass of water to swallow the pill but you have to make a conscious decision to swallow it.
So the only thing he does is to give studies and facts of how our brain and mind works, but the process of understanding and using this information is your work.
And that is why in the topic of personal finance I will be writing about contradictions and misconceptions that we have, not rules that can be followed, because any expenses you have will not necessarily be the same as mine, we are different in detail.
Do you think if anyone that will discover a bulletproof way to make millions will write a book about it and sell it for 30£? Even if this book will be written most probably it will be stolen halfway to typography. A lot of things that happen are in detail, to be in the right place to say the right things at the right moment, it is too many things left to the chance.
Do your own homework. You keep in mind this, then we’ve got a good start.
Until you are ready to let go of your old thinking, new things will not appear in your life, and try to sit on two chairs at the same time won’t work, because if you try to do so, you have to understand that in between chairs is emptiness. For the series of topics on personal finance, I will be using some studies that might challenge your beliefs. And until you are ready to have some of them shattered I’m afraid you are still holding on to old things. That is why is called PERSONAL FINANCE you need to know yourself better before trying to learn more about money.
But it’s hard to let go of your old thinking, so it’s hard for anyone to take the red pill consciously. I can’t tell you to skip that one more Starbucks or a new car. I can just show you the truth — why you want one.
Most of us think that we take the decisions consciously, but there are numerous studies that show that first, our brain takes a decision let’s call it subconscious, and our consciousness is just informed of the action to be made and acts more like a moderator, so of course this puts under a big question our free will.
You might not like this idea but neuroscience will have a laugh because if they can scan your brain they will be able to predict if you want to press a button before you make a decision consciously, one of the famous experiments a recommended read (https://en.wikipedia.org/wiki/Neuroscience_of_free_will)
Our so-called subconscious doesn’t operate on the basis this is good for me or this is bad for me, that is why when you have to study, a lot of people will find excuses, and when you are asked to kill everyone in the game your focus and motivation appears in the same moment.
So that is the reason why it is hard to get rid of bad habits even you might know that it is bad for you, your brain will take the decision, and then your consciousness will have to deal with that. Our brains are trying to optimize it’s work so once some links have been established the brain will use this link as a train that goes back and forth because this is easy and doesn’t require many resources.
So when every day to the office you are buying the coffee it is your subconscious that takes the decision, why? because you did it a couple of times and maybe it made you feel better for that particular moment, so the link was formed you have your coffee it means it makes you feel better and doesn’t matter that this eats into your personal finance or that you hate waiting in the queue, your brain took the decision and only thing that is left for your conscious is to deal with it.
We have the possibility to be better, but for that we have to take the hard decision of taking the red pill, challenging our views and beliefs, making the process of active thinking a daily thing, find the contradictions that keep us from being better, and just being ready for changes that might be painful.
To end I would like with another famous dialogue from BoJack horseman.

the hardest of all of that is to take this red pill every day. To make this choice every day.
