Chapter 15. When Information Is Useless


· In the 1960s only between 1% and 2% of adults in England were obese.

· By 2019 the number was 28%.

· A further 36% are overweight but not obese.

· Obesity is the second leading cause of preventable death.

The biggest head-scratcher of these numbers is the fact that the diet and exercise craze really took off for the first time in the 1960s. People spend more money on this stuff than ever before, yet the results are going in the wrong direction. There are no official statistics on how much we spend on diet products, but the UK diet industry is said to be worth an estimated £2 billion a year. Spending on gym membership and exercise equipment has also grown. However much money we throw at this problem, it seems to get worse.

Human nature is such a powerful force that it can act against your own best interests. Knowledge alone is never enough to change behaviour.

Statistics don’t stick with us but stories do. Most people prefer get-rich-quick schemes to thoughtful advice on how to get rich slowly for the same reason people seek out fad diets. Tactics are easier to latch onto than wholesale lifestyle changes because they make you feel like you’re accomplishing something. This is the opposite of the power of small wins. It’s the acceleration of small losses.

It is a cliche at this point to compare personal finance to dieting and fitness, but this is as good of an explanation as any as to why financial literacy fails to help people improve their money skills. The solutions for both personal finance and getting healthy are fairly simple in theory:

· For your finances: spend less than you earn, live below your means, prioritise your spending, save and invest early and often, and don’t take on excessive levels of debt.

· For your health: exercise regularly, don’t overindulge, avoid too much sugar and carbs, eat less, and plan your meals in advance.

Unfortunately, this information is useless unless it’s paired with an intelligent concrete plan to change behaviour. It’s estimated that 95% of people who lose weight using a diet end up gaining the weight back. Bad habits are hard to break.

Food researcher Brian Wansink once wrote, “The best diet is the one you don’t know you’re on.”

This is a wonderful way to think about implementing a workable saving and budgeting plan as well. Automating your saving and spending is up next.

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