Speaker 1I asked 40 millionaires a really simple question. What is your biggest regret? And at first, the answers looked completely random. $22,000 a year put into life insurance policy instead of Bitcoin. $11 million of theoretical upside, gone. Tesla stock sold to pay for a wedding. Hundreds of Bitcoins sold at $300 to make payroll. A chance to join what became one of the biggest companies in the world turned down because the idea sounded dumb. And then there were answers that had absolutely nothing to do with money. I should have had kids younger. I should have waited longer to have kids. I spent my health making money. I didn't trust myself. I cared too much about being liked. Withholding love. That was literally somebody's entire answer. Two words. Withholding love. So I went through all 40 answers and then I went back through more than 100 conversations we've had on Money Wise and eventually I realized there aren't actually 40 different regrets. There are basically three. I can see the life I almost had. I didn't become the person I thought I could become. And I thought I had more time. That's it. And this is where the episode got way more interesting to me. Because psychology has been studying these exact feelings for decades. Not just rich people, but regret. Why we have it. Why certain mistakes disappear and others bother you for 30 years. Why sometimes the person who did objectively better feels worse. Why the thing you didn't think you can do became more painful than the stupid thing you actually did. And there's even research suggesting regret has a job. Your brain isn't just torturing. You're for fun. It's trying to make sure you don't make the same mistake twice. What regret actually is, is crazy. First, there's an important difference between regret and disappointment. If it rains on your wedding day, you're disappointed. If you picked the outdoor venue after three people told you it was going to rain. Now you regret it because regret needs something a little bit extra. It needs an alternate version of reality, the actual thing that happened, but your brain can also see the other thing that could have happened and crucially, you feel like your decision had something to do with which version you ended up getting. And there's actually a theory of regret called decision justification theory. The basic idea is that regret has two ingredients. One, the other outcome would have been better. And two, you blame your decision for not getting it. It's a nasty combination. I lost money hurts. I lost the money because of a choice I made that I now think was obviously stupid hurts differently. And we know this isn't just some figure of speech. In a 2004 study published in science, researchers studied people with damage. To part of their orbital frontal cortex, they put them through decision making tasks where they could see not only what happened with the option they chose, but what would have happened if they had chosen differently. Healthy participants experienced regret. The patients with orbital frontal damage didn't show the same experience of regret or anticipation of its consequences. Then another study put healthy people in an fMRI while they made gambling decisions. As people experienced more regret, activity increased in areas including the medial orbital frontal cortex, anterior. Singulate and hippocampus, which are three words I did not know how to say before this episode. But there's even more science that makes this all very cool. As the experiment went on, people started changing their decisions to avoid feeling regret again. The circuitry involved when they felt regret started showing up before the next decision, thus preventing them from making the same bad decision twice. In other words, regret isn't just you feeling bad about the past. Your brain is using the past to change. Your future. The science we're covering makes these 40 answers from these millionaires make a lot more sense as we start to pick them apart. Also, really quickly, the reason I even have 40 people willing to answer this honestly is Hampton. It's a private community for founders. And when I say honestly, I mean these aren't LinkedIn answers. People in Hampton talk about their actual P&Ls, their actual net worth, companies falling apart, marriages falling apart, having new marriages, having babies, all the different challenges that come from. Being an entrepreneur while living life. It's one of the few places I could ask a room full of really successful people. What decision still bothers you and actually get good answers? And these answers are what led me down this entire rabbit hole. Okay, so bucket one, I can see the life I almost had. This was the biggest pattern. And the easiest way to describe it is the counterfactual is painfully clear. All the investing answers are basically the same story. I owned the thing and sold it. I couldn't. I could have bought the thing and didn't. I thought I was smarter than the index. I listened to an advisor. I ignored Bitcoin. I ignored Bitcoin again and again. And apparently in one person's case, 17 separate times. The numbers are different. Psychologically, it's the exact same regret. I know what I did and I can see exactly what would have happened if I had done something else. The stock market is basically a regret calculator. Most decisions in life don't give you that you have no idea what would have happened if you had gone to a different college. You don't know who you would have married if you hadn't met your wife or your husband. You don't know if the business you almost started would have been amazing or would have ruined your life because you never started it. But if you sold Bitcoin at $300, well, you can open your phone and calculate very easily how much money you would have made if you hadn't sold. The alternate universe has a ticker symbol, and that can be brutal for people who are filled with regret. But there's an incredible study that shows us why. In 1995, researchers studied Olympic medalists. They looked at footage from the 1992 Olympics and had people rate how happy the athletes appeared. Bronze medalists look happier than silver medalists, which on the surface makes no real sense. Silver is better. They literally beat the bronze medalists. But the researchers' explanation was counterfactual thinking. The silver medalist is standing there thinking, I almost got gold. One tiny thing changes and I'm the Olympic champion. But the bronze medalist has a different comparison. One tiny thing changes and I'm fourth. If I had gotten fourth, I would get nothing. It's the same Olympics. It's the same podium. But the silver medalist objectively did better and can still feel worse than the bronze medalist. Because regret doesn't care about what actually happens. It cares about what almost happened. Now think about selling Bitcoin at $300. You didn't just miss Bitcoin. You had Bitcoin. That's the silver medal. The guy who never heard of Bitcoin doesn't have the same problem. There's no vivid alternate life sitting three inches away. And now we get to what I think is one of the most important studies in this entire episode. In 2005, researchers combined a 11 studies asking people about their biggest regrets. The most common categories were education, career and romance. Education was 32 percent. Career was 22. Romance was 14. But finance was only about two and a half percent. Which is fascinating because my very unscientific sample of wealthy founders was drowning in financial regrets. Why? The authors of that paper came up with something called the opportunity principle. Their finding was that regret tends to be stronger in parts of your life where you believe you had an opportunity to do something differently, where you had choices, where there was a lever you could have pulled, where some version of your future was actually available to you. And suddenly my weird little millionaire survey actually makes sense. These people have had a ridiculous number of financial levers. Buy, sell, hold, raise, don't raise, take the deal, don't take the deal, sell the company, keep the company, hire the investor, ignore the investor, put the money in the S&P, put it in real estate, buy Bitcoin, don't buy Bitcoin. Most people don't make dozens of eight figure decisions in their lifetime, but these people do. So, of course, that part of their life generates counterfactuals. I don't think money magically makes you regret money more. I think agency creates regret. And rich people have had a lot of agency around money. Even research separating regret from disappointment has found that perceived responsibility matters. A bad outcome happening to you and a bad outcome resulting from your choice aren't psychologically identical. So that's the first bucket, the most painful, and the last bucket is the second bucket, the most painful. The second bucket is the most difficult. The second bucket is the most painful. I'd like to take it back, but here we are. That's the kind of conversation that happens inside of Hampton, and particularly what Hampton was built for. OK, now bucket two, I didn't become the person I thought I could become. This was the second group. At first I labeled it as not taking enough risk, but I don't think that's actually right, because when you put all the answers next to each other, they're not really about risk, they're about agency over your life. If you take more risks early or you stop looking for the perfect situation, maybe you trust yourself, stop looking for validation, stop trying to be liked, don't let older, quote, wiser private equity people run the company for you or don't follow the standard school or job or career founder path just because that's what you're supposed to do. It's stuff like betting on yourself. All of these regrets have the same underlying sentence. I knew there was a version of me I wanted to be, and I didn't fully become that person. There's a 2018 paper that gets almost freakishly close to what these founders were describing. The researchers separated two versions of the self, the ought self and your ideal self. The ought self is who you think you're supposed to be responsible, a good employee, a good citizen. Pay your bills, call your mom, keep your promises. The ideal self is who you want to be. The entrepreneur, the artist, the great dad, the person who took their shot, the person who built something, the version of you that lived up to your potential. Across six studies, people's most enduring regrets were more often connected to gaps between their actual self and their ideal self than gaps involving the ought self and the explanation. This is very. good. When you screw up an obligation, there's usually a way to respond. You apologize or you pay someone back or you fix it. There's closure. But how do you close? I never really went for it. Where's the finish line for that? How do you prove that starting the company would have failed if you never started it in the first place? How do you prove moving to New York would have been awful if you never moved there? How do you prove you couldn't have been the person you pictured if you never tried to become that person? You can't. The unlived version of you never has a bad quarter. They never get divorced. Their company never fails. They never realize the dream job kind of sucks. They get to stay perfect because they never had to exist. And I think that's why some of these answers felt so heavy. The regret wasn't, I should have taken more risk. It was, I don't know what I would have been capable of if I had just trusted myself a little bit more. Every year when summer ends, you tell yourself it's finally time. Start taking health seriously. But work picks up, schedules fill, and your health slips down the priority list again. Does this sound familiar? This, my friends, is why a growing number of Hampton members have been loving Daily Body Coach. It's become an inside secret within the community for getting lean, strong, and healthy without the mental load of having to think about training and nutrition. Daily Body Coach is run by a Hampton member, Anthony Monica, who's also a software founder. And you feel that pedigree come through in this experience. As a customer, you get your own team of trainers, nutritionists, and psychologists who take the time to understand how you operate, what tends to throw you off, and what your daily life actually looks like. The result is a highly personalized operating system that's guaranteed to deliver results. If you want to avoid falling off, restarting, and repeating the same old cycle, you need a system that can work long term. Which means it needs to be designed around your existing habits. That's what Daily Body Coach builds for you. So if you want to transform the way you look and feel and start taking your health seriously over the long term, you've got to try Daily Body Coach. Click the link in the description or go to dailybodycoach.com slash moneywise and I'll connect you directly to you. with Anthony. That's a much harder reality to digest. And there's a famous piece of regret science that you've probably heard something around. People regret what they do in the short term, but what they don't do in the long term. And one of the original studies had this incredible number. 84% of people said their bigger long-term regret involved something they failed to do. Which is basically the academic foundation for every quote, take the trip, start the business, tell her how you feel, buy the ticket. All these Instagram posts that you've seen about going and doing the thing. It's because 84% of people have said that their long-term regret involved something they failed to do. There's science behind this. Except there's a small problem. The study that said 84% of people tend to do that only studied 32 people. So in 2023, it was tested again in public at a psychology museum. This time, 2,600 people. And the result got way more robust. For recent regrets, the original pattern looked pretty good. 58% were more troubled by something they'd done. But when people looked at their entire lives, 51% was due to regret from some action that was taken and 49% was due to inaction. It was basically even. So now technically the broader interaction between time and action versus inaction was still there. But that huge, you'll definitely regret what you didn't do thing that was found in earlier science studies. No, at least not in this sample more recently. The researchers point out that the museum sample was younger, which definitely could matter. Maybe you need more life behind you before inaction really starts to hurt. Like, what do you regret when you're on your deathbed in your 80s or 90s? But the science is there. We cannot confidently say that everybody reaches old age regretting what they didn't do more than what they did. Do you agree with that? I don't know. The science is there, but I'm not sure I actually agree with this. And I actually think the ideal self-research gives us a better way of thinking about this anyway. Maybe the thing that sticks isn't simply inaction. Maybe it's the gap you never closed between the two. Maybe it's who you became and who you thought you could become. Sometimes that's because you didn't act, but sometimes it's because you did act and chose the wrong path. Which brings me to the weirdest response I got from the survey. A 23-year-old told me his regret is that he isn't pushing hard enough. Then in the same message, he said, I'm definitely in the never enough stage right now. It's fascinating. He can see the machine working while he's inside the machine because the problem with an ideal self is that you can move him. You can make a million. You make 10. Ideal you makes 50. You sell the company. Ideal you would have held it. And I've heard this exact thing from guests on Money Wise where they have this perfect journey outline and then eventually they do it, but that $10 million acquisition now becomes a little bit filled with regret. Oh, I wish I'd gotten 50 or 50 becomes 100 and you keep moving the goalpost. 100 becomes half a billion and then a billion and it just never ends. So I don't think the lesson from these founders is take every risk because that's stupid. The science definitely doesn't say that. I think the lesson is much more interesting. Be careful about handing somebody else authorship over the person you are trying to become because apparently you're not going to be able to do that. You're not going to be able to those gaps can stay open for a very, very long time. Okay, bucket three strap in. This one is a bit deeper. I wish I had more time. This one is totally different because eventually the money disappears from the answers. Eventually you're so old and maybe have so much money that it just doesn't move the needle for you anymore. So some of these regrets were around having kids younger. Someone said, I wish I had had kids younger. Someone said, I wish I waited longer to have kids. I spent my health making money and then spent my money trying to get back my health. Is what someone said. Some people said they wished they had spent more time with their family. There was a founder who sold his company for $80 million and then hit rock bottom. Then they looked back and realized the thing they really wanted wasn't the company. It was their wife and kids. There's an entire branch of psychology that helps explain why some of this stuff gets important suddenly as you get older. Laura Carstensen at Stanford developed something called socio-emotional selectivity theory. The basic argument is that our priorities change depending on how much time we believe we have left. When the future feels huge and open-ended, we're more attracted to things with future payoff, like going to explore or meeting new people or building a dense network or learning or growing. But when the time starts feeling limited, humans start prioritizing emotional meaning. The people closest to us, relationships, experiences that matter now. But this is not strictly about being old. It's about perceived time. Research on this theory has found similar shifts when people are made to think about endings, or a limited future. So the 40-year-old who suddenly has a health scare can start thinking differently. Or the 30-year-old having a kid can also start thinking differently, which personally I resonate with greatly. When I first had kids, I completely changed everything about the way that I thought. I even had a midlife crisis. At 30, I started eating differently. I stopped drinking alcohol. I started running. Everything in my life started becoming, oh my goodness, I need to stick around for my kids. I need to be there when they're growing up. I want to be around to see them have families of their own. Everything in my mind shifted. I think this is common. Anything that suddenly puts a border around time can change what feels valuable. Because it means a 25-year-old founder obsessing over growth and a 65-year-old founder obsessing over dinner with his kids aren't necessarily operating with completely different values. They might be responding rationally to completely different perceived amounts of time. And then there's another study that I think gives us the most useful advice in this entire episode. Researchers looked at regret across adulthood. There were opportunities to undo consequences of their biggest regrets. But among those older adults, more intense regret was associated with worse quality of life. So what helped? Two things. When there was still a realistic opportunity to change something, engaging with it helped. When the opportunity was gone, being able to disengage from trying to undo it helped. And having meaningful future goals helped. There was even a later three-year study of retirees that found a very similar pattern. If the regret could still realistically be addressed, engagement was with better outcomes. But if the opportunity was gone, disengagement was protective. That is so much better than live with no regrets. Because honestly, that's just meaningless. The research basically says, figure out whether the door is open. If it is, regret might be telling you something useful. Like, go do something. But if the door is closed, continuing to mentally negotiate with the past stops being useful. You need another goal. And this is also where the Harvard study of adult development becomes interesting. They've followed people for decades When researchers looked back at participants at age 50 to see what predicted who would be the healthiest around age 80, relationship satisfaction was a better predictor than things that they expected more, like cholesterol, having high or low cholesterol. Again, not really a study of regret, and I don't want to pretend that it is, but it does make the family answers from these founders hit differently. Apparently, the thing people start valuing when time feels scarce is also connected to how well their lives actually go, which makes withholding love a pretty incredible two-word answer. So what is regret for? Take a step back. 40 millionaires, more than 100 conversations. And I don't think the three buckets are actually money, risk, and family. Those are just the subjects. The real three buckets are, one, I can see the alternate timeline. Two, I left a version of myself unfinished. And three, I realize a window was closing after it started closing. And all three require your brain to do the same weird human trick. Imagine something that never happened. Compare it to what actually did happen. Then feel something about the difference. Psychologists call those counterfactuals, what might have been. There's a major review paper from 2008 arguing that counterfactual thinking actually helps regulate behavior. The useful sequence is basically, I should have done X, which produces, next time, I'll do X. And that changes what you actually do when another opportunity comes around. That is literally regret doing its job. You sold too early. Next time you create rules around when you sell, your gut because an investor sounded smarter than you. Next time, you listen differently. You spend 10 years saying, family comes first while your calendar said the opposite. Maybe tomorrow's calendar changes. That is useful regret, but there's unuseful regret as well. Bitcoin was $300. It's not $300 anymore. You can't go back. Your kids are already grown. You can't make them four years old again. So if they're four years old now, you've got to lean in and do what you think you're going to want to have done 30 years from now, now, because you can't go back. Your company was sold. That deal is closed. At some point, the counterfactual stops producing new information. You're just replaying it over and over again, and that's unhealthy. And I also think that's the distinction I was missing when I started this episode. A regret you can act on is information. A regret you can't act on can very easily become entertainment, but like super painful entertainment. So I want to introduce something called the regret test. Take whatever your biggest regret is and ask three questions. What is the alternate life I'm comparing my actual life to? Be specific. Not I regret selling, but like what exactly do you picture happening if you didn't? And not something simple like I regret working too much, but what do you actually think that time would have looked like instead if you had worked less? There's a very decent chance you've built a counterfactual where everything went right. Second, is the door actually closed? Can you still call that person or start that thing or change how you invest or spend time with your kids or take care of your health or make the apology of yes, great. Then your regret still has a job. It's still useful regret. And third, what exactly am I going to do differently because I learned this? Because if the answer is nothing, then you're not learning from the regret anymore. You're just collecting regret, which is so destructive. Don't collect regrets, deal with them, figure out if it's a useful regret and act on it. And if it's not a useful regret, get rid of it. The part that surprised me most about asking rich people this question is that money did not eliminate regret. It almost gave some of them higher resolution regret, like regret in 4k. They could put a number on the other life, $11 million, hundreds of Bitcoin, a company that became enormous, an exit they wish they hadn't taken. They can actually, see the chart and assign their regret to those numbers. But once you get past the charts, their regrets become unbelievably normal stuff. Like I didn't trust myself or I worried too much about what people thought, or I should have spent more time with my kids. So maybe wealth doesn't change the machinery very much. It just gives it more expensive material to work with because regret seems to hurt most. When three things are true, you can clearly imagine the other road. You believe you had some control over which road you took. And you realize that the opportunity to switch roads might be disappearing. That's why silver is so important. Silver is so important. Silver can feel worse than bronze. And that's why the person you never became can bother you for decades. And that's why eventually the regret stops being about money and starts being about time. The goal probably isn't to have no regrets. Your brain seems to have them for a reason. The goal is to make sure you're still getting something useful from them. Because if the door is open, go do something. If the door is closed, learn the lesson, pick another door. And if you're a founder doing seven figures or more, and you want to be around people willing to have conversations like this without the LinkedIn humbled and honored version of themselves in the room, that is hell. That is where I asked this original question and where a lot of money wise starts. Maybe you're living with unuseful regret and you don't really know who to talk to about it. If that's you and you're running a company and you need some people to talk to, go to joinhampton.com. Thanks so much for listening to money wise. If you haven't already, please subscribe. That means so much to me. I'm Daniel Burke, your host. I'll see you next week.
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