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drawing and sketch showing our ideas don't grow when we're not exposed to other ideas

❝Always be a first-rate version of yourself, instead of a second-rate version of somebody else.❞ -Judy Garland

I'm on a Zoom call led by a mentor of mine, where he's going over a list of things that he believes are essential tenets of giving financial advice and being a good advisor. One of the tenets he says during the call is that we ought to be willing to tell our clients what to do. I raised concern about this idea because, although it is well intended, it strips away people's autonomy. I tell him that I think there is a better way to get to the same place. Unfortunately, he didn't want to hear an opinion different from his. I spoke politely, yet he thought I was oppositional and kicked me out of his group.

I'm a bit flustered by this, yet I find it fascinating that somebody so well-known could be so willing to surround himself only with people who praise him and never challenge his thoughts. I later write to tell him that I'm happy that I don't agree with everything he says because I don't want to be in an echo chamber. It's clear to me that he is searching for confirmation of existing beliefs.

How foolish!

Shortly after, I pull up my phone, start scrolling through my feed, and find myself engaging with posts I connect with. I'm adding to the conversation of people who said things I already believe, but they may have said them better. I'm praising them for their efforts. I also find myself scrolling past posts that I disagree with. I even find myself blocking and hiding people that have different views than I have.

That's when I realized that I also suffer from confirmation bias.

It's hard work to stay out of an echo chamber, but it is worth it.


The field of cognitive psychology studies the way we process information. Our brains have a lot of information to process, so it relies on shortcuts. These shortcuts are called heuristics. By relying on shortcuts, our brain is trading accuracy for speed. Therefore we sometimes are susceptible to cognitive biases; we process information incorrectly. For example, things that have happened more recently feel more probable because we've recently been exposed.

One of the most powerful biases we are susceptible to is confirmation bias. Confirmation bias says that we will notice information that confirms what we already think easier than information that goes against what we already think. In other words, any information that confirms what I already think I'm going to pay attention to, but information that proves me wrong will be ignored.

This is true about our beliefs about politics, economics, and other opinions we might have in life. But, it goes deeper than that. For example, we are more likely to surround ourselves with friends and choose a partner based on whether or not they share our beliefs. We surround ourselves with people who tell us we are right.

It goes even further. Instead of reading the entire newspaper like people used to, exposing ourselves to all of the information (or at least seeing the headlines), we set filters on our news apps so we only see news that we want to see. We don't even see the information that disconfirms our beliefs, so we're not ignoring it anymore; we are not even seeing it. Add social media to this, and the algorithms capture our attention by showing us what it knows we want to see.

What this means is that confirmation bias is becoming stronger. The danger is that confirmation bias leads to echo chambers.

drawing and sketch showing confirmation bias leading to echo chambers


Once you arrive at an echo chamber, you're at a place where you are never exposed to any beliefs different from yours. Tim Urban, in his book What's Our Problem?, notes that they are effectively about groupthink and conformity over free thought and new ideas. There is no progress in an echo chamber.

Think of an echo chamber as a big cave into which you shout your opinions. It echoes back what you said. This feels good because it confirms what you already believe. Thus, not only does confirmation bias lead to an echo chamber, but echo chambers reinforce confirmation bias.

We've all got narratives that we've crafted. We make sense of the world through the stories that we tell ourselves. When this is about money, these are money stories, and those are driven heavily by our Money Scripts which were written for us mostly in childhood. These stories are how we view money's role in our lives and how we think about our relationship with money. They tell us how money should and shouldn't be used and how we use it to relate to others. Most of the time, these stories are outdated and based only on partial truths (at best...fiction at worst). If we never have a chance to challenge our beliefs, then we are more likely to consider these money stories factually. We're more likely to do what we think we are supposed to do rather than what would bring us meaning and happiness. Living in an echo chamber can lead to regret.

drawing and sketch showing an echo chamber

Money Scripts® are subconscious beliefs we have about money that we learn these we are growing up in our family systems. A Money Script can be anything, but they tend to fall into four categories. Learn what categories your Money Scripts fall into.


Breaking out of the echo chambers in our lives allows us to question some of our beliefs. Once we question our beliefs, it helps us imagine a world in which we can live in line with our own personal values and what's important to us rather than societal norms. Without questioning our beliefs, we might not even know there's a better way. We might not even know who we truly are as our authentic selves. But expanding our horizons and doing the inner work to understand who we are and what's important to us allows us to live in line with our own values and sources of meaning.

drawing and sketch showing living aligned with values leads to a meaningful life instead of regret


Exiting the echo chamber is difficult because it means opening up to the idea that we might be wrong. If we're identified with our thoughts and beliefs, then a challenge to those thoughts feels like a challenge to who we are as a person. This can be uncomfortable and even embarrassing. But the discomfort and embarrassment are investments that have high returns. The echo chamber keeps us in a box, thinking we know all the right answers. Getting comfortable being wrong and learning from those things we were wrong about allows us to expand our horizon, more in tune with what we want out of life so we can live more authentically.

drawing and sketch showing how we can grow by being wrong and learning from it

We can't get rid of confirmation bias. However, by recognizing it, we can seek out opinions and other ways of thinking so that we don't end up in an echo chamber living the life we think we're supposed to live.

You get one life; live intentionally.


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Related Reading
References and Influences

Clements, Jonathan: How to Think About Money

Haidt, Jonathan: The Happiness Hypothesis

Kahneman: Daniel: Thinking Fast and Slow

Lukianoff, Greg & Jonathan Haidt: The Coddling of the American Mind

Manson, Mark: Everything is Fucked

McKeown, Greg: Essentialism

Stanley, Thomas & William Danko: Millionaire Next Door

Note: Above is a list of references that I intentionally looked at while writing this post. It is not meant to be a definitive list of everything that influenced by thinking and writing. It's very likely that I left something out. If you notice something that you think I left out, please let me know; I will be happy to update the list.



About the Author

Derek Hagen, CFA, CFP, FBS, CFT-I, CIPM is a speaker, writer, and coach specializing in financial psychology, meaning and valued living, resilience, and mindfulness.


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