Korva is a scroll of the internet’s best ideas.
Surprises hurt more than hard talks
Regular money conversations
Regular conversations about money keep the surprises out. Galloway sits down with his partner on a regular basis and goes through the finances: what he is investing in, where money is coming in, how much there is, and whether he lost money in the market last month. None of it has to be anyone's fault. A certain level of transparency about this taboo topic matters most early on.
Telling it all early
That is how he handled a relationship that was getting serious with a woman in residency to become a surgeon. She talked about her student debt. He told her how much money he had, which stocks he held, what he was trying to do with his business, what he was worth, and what he spent. He wanted her to know everything about him.
She was transparent right back: she wanted to be a surgeon, here was how much she was going to spend, and here was her student debt.
Why do money surprises hurt more than bad news?
A surprise breaks an expectation, and research on trust shows that the discovery of a concealed fact damages a relationship more than the fact itself would have. Psychologists call the effect expectancy violation. A canceled vacation or a large tax bill is painful on its own, and the discovery that it was not disclosed adds a second injury. Studies of couples have linked concealed spending to lower trust and lower satisfaction.
How can options trading lose money so fast?
An option is a contract with an expiration date, giving the holder the right to buy or sell a stock at a set price. A buyer's maximum loss is the premium paid, and that premium can fall to zero if the stock does not move the right way before the contract expires. Options also carry leverage, so a small move in the stock can mean a large percentage change in the option's price. In the US, brokers require traders to be approved for options before they can place these trades.
How long does a surgical residency last?
Residency is the paid training that follows medical school, and for general surgery it lasts five years in the United States. Residents are paid a salary, but one that is modest compared with the loans many carry from medical school. Subspecialty fellowships can add one to three more years of training. The match system, run by the National Resident Matching Program since the 1950s, assigns graduates to residency programs.
More from The Prof G Pod with Scott Galloway
