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Make Even More Money With a Mindset Shift, According to Science

By Jennifer Reardon - Feb 9, 2021 at 5:00AM

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Science shows how mindset, habits, and discipline can help achieve positive results.

Learn why investors need to consider how mindset, habits, and discipline can help achieve positive results, according to science.

Here, in a video recorded live on Jan. 6, 2021, Fool analyst Tim Beyers and contributors Brian Stoffel and Asit Sharma analyze Dr. Alia Crum's TED Talk "Change your mindset, change the game," featuring her own "Mind over milkshakes" study, as well as a placebo study by Dr. Fabrizio Benedetti. 

Tim Beyers: The choices that we make in our mindset are choices we control. Boy, they give us way more power than we may think. It's actually really quite amazing.

Brian, can you talk a little bit about this milkshake experiment?

Brian Stoffel: Yeah. I'll just tell two real quick. We're going to be referencing a YouTube presentation that I'm putting in the chat right now. Well, there's a researcher and right now, I cannot remember her name.

Tim Beyers: Dr. Alia Crum.

Brian Stoffel: Alia Crum. One really quick study she did was these patients who just had thoracic surgery were given the same amount of morphine, but one set of patients had the morphine distributed through them while watching the doctor put it into their tube and the other group had it put in without them knowing through the tube. So they both received physically the same amount of morphine. But the group that watched the doctor do it reported feeling more relief.

This was odd to many people because they both received the same amount of everything, but they reported that they felt more comfortable and less pain as a result.

Then there was a second one that was done down the line. That first experiment was the first domino, and later on she did an experiment where she brought in two groups of people. What she did was, she told them that they're going to drink a milkshake and then they were going to measure how much of a certain hormone or enzyme was going through the body, and basically, when there's a healthy drink, there shouldn't be a ton of this enzyme, when there's an unhealthy drink, there should be a ton of the enzyme.

You bring in the first group, you tell them they are drinking the healthy drink, and they measure, and there's just a little bit of this enzyme that enters the blood stream as it should be when it's a healthy drink. Then she brings back in another group and she shows them that they're going to be having the unhealthy drink, basically, you're the most calorie-dense drink you can get from Starbucks (SBUX 8.15%). The stuff my daughter would love to get every time we go there.

Tim Beyers: I'm drinking my dessert.

Asit Sharma: It looks good. [laughs]

Brian Stoffel: Obviously, when they do that, when they give the people this drink, they have way like three or four times more of this enzyme in their blood. And here's the catch: They were all given the same drink.

Tim Beyers: Same drink.

Brian Stoffel: They were all given the same drink, and one group produced four times more than the other. That kicked off a talk about mindset, which is what you believe is happening to you, the beliefs that you have, the story you are telling yourself, and then I'll pass it off. It's not omnipotent, but it has power.

Tim Beyers: It has a lot of power. What was so interesting about this is that it was on the labels. Some who were drinking the luxurious drink thought, "Oh, my goodness. I'm drinking so many calories." That tells the brain, "Boom, we are drinking a ton of calories right now, release the enzyme to increase our ability to digest all of those calories."

The others who looked at the healthy drink and said, "Oh, this isn't that many calories." So the brain said, "Don't worry about it."

What was interesting about this and what the whole purpose of this TED Talk was, the story that you tell your brain about what's going on or what you believe has a direct impact on outcomes, the way that you will respond.

We want to talk a bit about core beliefs, and Asit, I want to tee you up with something that you talked about. Let's just get maybe Sparks, if you have a yes-or-no poll ready, I want to see how many people have heard of a man named James Clear. Yes or no, have you ever heard of James Clear and his book Atomic Habits? James Clear. We're early, but it sounds like most people have not.

So let me explain who this guy is. James Clear wrote this book called Atomic Habits, but he's been a writer on habit formation and things like this for a long time. If you go way back with us on Fool Live, Asit, you and I did a mindset session about the power of habit. Remember we did a little book review?

Asit Sharma: When the first mindsets, in spring last year.

Tim Beyers: That's right. Yeah, and it was interesting. Clear found, in all of his research, he found that the clearest way, the easiest way to change a habit you would like to change. So putting this in an investing contest, I don't want to be day trading anymore. Instead of defining the things that would make you not be a day trader anymore, the "whats," what he found is that, if you instead changed your belief and said, "You know what, I'm not a person who day trades. I'm not that person." And you instill that belief in yourself, you are much more likely to change that bad habit.

In other words, the belief influences the action, which is the same thing your brain, affecting the way your body reacts. This is why we wanted to talk about this.

But Asit, you had something on habits, I want to tee that up first because most people, I guess, have never heard of him. We did the poll and it was only about 20% of the audience. So talk a little bit about what you were sharing with us about habits.

Asit Sharma: Yeah, the first thing that I want to say is, it's a wonderful book and a great time of the year when many of us are still forming our New Year's resolutions.

Tim Beyers: Yeah.

Asit Sharma: Put this on your reading list everyone, especially if you're trying to change some habits, it's helpful. But mindset is so interesting.

There was a study at UCLA in 2016, and a professor there put forward a theory that our mind isn't just what exists inside our skull in the form of our brain, it's really something else, it's harder to define, it's emerging systems that we have in our body.

There are some autonomous systems in our body that you read about in high school. You have your central nervous system. Basically, this professor was trying to posit that it's almost impossible to define what the mind is.

I want to loop this into what Tim was saying, that you actually have some control in that sense in shaping your mind. You have this subconscious narrator who's going on all the time. You can let that subconscious narrator just keep narrating the story. But you can get involved on a conscious level, too, and knock on the door and say, "Hey, subconscious narrator. I want also to work on this chapter."

To me, the whole idea of mindset is not so simple, because it's a framework. We've talked about frameworks. It's the ability to be resilient, we talked about that. It's so many things in one. But it is a discipline that you've got to develop. You've got to work on it every day. That's why we do this every week because if it were so easy, we would've done one hour on mindset and we wouldn't need that, we can move on to just talking about stocks all the time.

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