Episode summary
Charles Chaffin: The Psychology of Financial Planning | Rational Reminder 395
The Rational Reminder Podcast
· · 1 hr 32 min · Hosts: Benjamin Felix, Braden Warwick · Guests: Charles Chaffin
Summary
Charles Chaffin argues that financial planning is as much about psychology as technical advice because people do not act like fully rational optimizers. He says humans are wired for short-term survival, so emotions, uncertainty, habits, and biases routinely override long-term financial plans. That is why the advisor’s job is increasingly to coach behavior, not just deliver information.
A major theme is how environment shapes money behavior. Chaffin says people can change outcomes by creating friction for bad habits and reducing friction for good ones, whether that means moving credit cards off shopping sites, automating savings, or changing the social and media environments that reinforce spending and FOMO. He also emphasizes that goals work best when they are tied to identity and broken into smaller wins that build confidence.
The episode also introduces a new seven-question risk tolerance questionnaire from Money and Risk Inventory, built around psychometric research rather than casual online quizzes. Ben Felix and Braden Warwick explain that PWL Capital is using the tool with clients and making a public version available, while Chaffin discusses why risk tolerance, financial self-efficacy, money scripts, and past financial flashpoints matter for both investor behavior and advisor-client relationships.
Key takeaways
- Chaffin says financial planning succeeds when advisors focus on coaching behavior, because information alone no longer has much value.
- He argues that humans are wired for immediate rewards, so emotions and uncertainty often overpower long-term investing plans.
- He says environment matters as much as willpower: friction, social norms, and media exposure can either reinforce or disrupt bad money habits.
- Chaffin says goals are more durable when they match identity and are broken into smaller, winnable steps that build financial self-efficacy.
- The episode highlights a new seven-question risk tolerance tool from Money and Risk Inventory that Ben Felix says PWL Capital is rolling out to clients and making public.
Notable quotes
“we're basically wired to be lazy. So we're so we we get the fast shortcuts to make decisions”
“money is like fire and our brains are like toddlers”
“The transactional piece is gone. Nobody needs a sage on the stage anymore”
“Think small. And so think about shorter time horizons”
How the episode opens
This is the Rational Reminder podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We are hosted by me, Benjamin Felix, chief investment officer, and Braden Warwick, financial planning product architect at PWL Capital. All right, welcome to episode 395.
Uh we're joined in this episode by Dr. Charles Chaffen. Really interesting guest and there is a bit of a backstory, but I I'll introduce who Charles is first and then we'll talk a little bit about the backstory.
And we have a uh I don't know what I'd call it. Is it an announcement? Is it a is it a gift for listeners?
I don't know. I don't know what it is, but it's something cool that people are going to like. Uh, okay.
So, Charles's work bridges psychology and financial planning. Uh, he's written a book uh on the psychology of financial planning. Uh, he's written a bunch of books, nine books in total.
Uh, the most recent one was on goals uh the psychology of defining, pursuing, and achieving what matters, which we did talk about. Um, and then his his sort of big meaty book on the psychology of financial planning is the psychology of financial planning practitioners guide to money and behavior. And there is a new edition of that book coming out in April 2026.
I read the 2023 version, I believe, to to think of the questions to ask Charles. Uh, so he's got this, you know, big body of of uh books on financial planning, psychology, and and related uh topics. He also creates instructional programs for financial planners.
Uh he is a professor of practice in the college of human sciences at Iowa State University. There's a very broad knowledge set in financial planning psychology. Uh yeah.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- behavioral finance
- financial psychology
- money scripts
- identity-based goal setting
- financial risk tolerance
Companies and tickers mentioned
- PWL Capital
Watch the episode
Watch “Charles Chaffin: The Psychology of Financial Planning | Rational Reminder 395” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Rational Reminder Podcast, this episode and its artwork belong to Benjamin Felix, Cameron Passmore, and Dan Bortolotti. Octagon is not affiliated with the show; this page is an independent summary.
