Healthcare and education professionals spend their careers caring for others—often at the expense of their own financial clarity and security. At some point, many of us quietly wonder, “Who’s taking care of me?”
Hosted by Mike Powers, physical therapist and full-time educator, this podcast examines personal finance through the shared culture, constraints, and values of healthcare and education. Like good clinical care and effective teaching, personal finance lives at the intersection of evidence, judgment, and human behavior. Each episode helps you place data and strategy within the context of your goals, priorities, and psychology—so you can move forward with confidence and intention.
In this updated release of episode 2, Mike makes the case for what he calls "cognitive optimism" - optimism grounded in data and informed by your unique perspective and values. If you can resist the lure of pessimism and the tendency toward negativity bias and loss aversion, you will discover that optimism is associated not only with higher savings rates but also longer lifespans - after all, we want to be around to enjoy the fruits of our labors!
Michael: Welcome to Rehab Your Finances, a podcast about personal finance for healthcare, education, and caregiving professionals. I'm your host, Mike Powers, physical therapist, full-time educator, and certified financial education instructor. Each episode, we'll look at personal finance through the intersecting lens of healthcare and education. Just like clinical practice and teaching, personal finance is both an art and a science. Want to send a quick reminder that information presented on the show is educational in nature and should not be taken as investment advice. Let's get started. Today I'll be making the case for what I'm calling cognitive optimism and the relationship between optimism not only to improve financial health, but also improved health and lifespan. Optimism done correctly is really a powerful lever you can access in improving financial outcomes and also health outcomes. And these improvements in health outcomes mean that you're more likely to enjoy the fruits of all the hard work you put into establishing good financial health. Now, I to be very clear. I'm not talking about false bravado or ignorant optimism. Sticking your head in the sand while avoiding real problems is not the goal here. Rather, I'm advocating for what I'm calling cognitive optimism, optimism that's supported by evidence. and that is bolstered by determining how your specific situation aligns with that evidence. Let's start though, before we can dive into centering around cognitive optimism, need to probably start with the barriers to optimism. And really, this is not our fault. As humans, we are predisposed to what's called negativity bias. We prioritize identifying and avoiding threats, whether real or perceived, and this provides an evolutionary advantage. However, This ability to identify threats and stay away from them is really incompatible with many modern stressors. We're no longer being chased, well, most of us, would assume, by lions. We're not fighting day to day in most situations for our very survival. Instead, our stressors are more chronic, more long-term, little more insidious. Now, this negativity bias, this potential that seeing threats as more urgent, than opportunities while improving survival and reproductive chances really has a negative impact on our financial health and our physical health. Here I also want to tie in the concept of loss aversion. This is a concept popularized by Daniel Kahneman and the thinking here is that losses hurt more than gains feel good. So the psychological pain of losing is twice as intense as the pleasure of gaining an equivalent amount. We feel worse about losing $100, two times as bad about losing $100, than we feel good about gaining $100. So this means that we're wired to live in that part of our brain that's that fight, flight, or freeze. We're going to look at things, we're going to scan for threats, and anytime we do experience a negative outcome, it hits us twice as hard. So these are all key points to remember. as barriers to optimism. There's few other barriers to optimism I want to mention as well. In his excellent book, The Psychology and Money by Morgan Halsall, he has a full chapter, chapter 17, devoted to what he calls the seduction of pessimism. He notes that optimism sounds like a sales pitch and pessimism sounds like someone trying to help you. So if you want to sound smart, be negative because the optimists just sound like they're trying to sell you something. Another book I want to reference is The Soul of Wealth by Daniel Crosby. He cites in his book multiple examples of failed pessimistic predictions. So although more critical and pessimistic viewpoints are perceived as more intelligent, and there's data to back that up, we don't typically go back and review when pessimists were wrong. So there's an incentive to be pessimistic because you're sounding a little bit smarter and you're perceived as smarter. Another key point in that book, The Soul of Wealth by Daniel Crosby, is if you think about it, investing, saving, putting away money for a future day is inherently an act of radical optimism. So we're going to remember this as we later on talk about importance and the benefits of optimism. Further making it hard to be optimistic and further ingraining us towards pessimism is that setbacks happen quickly. Progress really happens too slowly to notice. Think about this in your own life, maybe with health changes, maybe you've started a new exercise program, a new nutritional program, your positive changes seem like they take forever to show up. But if you stop exercising or you start eating in a way that you really don't want to, you'll notice the setbacks quickly. This happens with finances as well. Quick losses, we see them, we internalize that, it's a negativity bias. The compounding interest though that's happening to money that's invested and held through the long term happens too slowly to notice on a daily basis. So because of this, these quick setbacks and the negativity bias really do make pessimists seem more realistic. These incremental improvements and the negativity bias really makes confirming that optimism is a viable outlook more difficult. Let's talk about the link to healthcare and education because I would argue healthcare providers, educators, were inherently optimistic as it relates to those that we're providing care towards or that we're educating. So in my own domain as a physical therapist, I'm trained to identify problems and then set goals with the expectation that patients progress towards these goals. Despite as a human being wired for negativity, training as a physical therapist and those of you listening who are healthcare providers, I'd argue we're trained. to be optimistic or else we wouldn't be doing what we're doing within our jobs and professions. Similarly with education, we really encourage our learners to have a growth mindset. We expect a process of learning. There's an expectation that students grow and develop. Despite again, maybe the negativity bias as a human, educators are inherently optimistic. So my challenge to you is can you translate this professional optimism towards your own personal finances? Is it possible that by identifying and intentionally targeting problems and barriers, you can reasonably expect future improvements? Yet I think if this seems challenging, consider any scripts and narratives that you may have. We'll talk about money scripts and narratives in a future episode, but I'd really think about questioning within your own realm if you have a negative outlook towards money, why that is and why you think setting goals and working towards progress is outside the realm of possibility. Why be negative in this area when our professional training does lean into optimism? What I'm going to be presenting next is the dual benefits of optimism in terms of increased lifespan and increased savings rate. And we know that savings rate is tied closely to overall financial health. Let's talk then about positive psychology and not toxic positivity. I want to make a clear distinction here. I'm not talking toxic positivity. Those of you know me in person, I'm not a fan of fake positivity. Here I'm talking about positive psychology. Positive psychology was a phrase coined by Martin Seligman who really thought that in the field of psychology too much effort was spent on what's wrong with people and not enough effort was spent on determining what's right. The research I want to cite here is a 1990 study by Seligman et al. talking about the attributional style. So the stories that people told themselves or how they made sense of something that happened in the world really could correlate with subsequent performance. Here they looked at swimmers, world-class Olympic swimmers. I these were college swimmers. And the researchers, I'm laughing because it's kind of a mean study in a way. They gave the swimmers after a practice run, they told the swimmers they swam a little more slowly than what the swimmers had thought. So they gave them a fake slow time. It was slow enough though, or it was within a normal range. So the swimmers didn't think it was fake, but all the swimmers came out disappointed. The key finding in the study is that the optimists believed that the poor time was a one-off event. In the optimists, those with an attributional style that was more optimistic performed the same or better in their subsequent swimming trials versus the pessimists attributed the poor, again, this is a fake poor time, to internal and permanent factors. So the educational correlate here is this correlates very closely with growth mindset. I see lot of correlates to this in personal finance when people tell themselves, I'm just not good with money. Random stressors and maybe not some that aren't so random that maybe could be planned out, but financial events happen, stresses arise, emergencies come up. And the question is, do you approach it with optimism that well this happened, but I can get things in order and I expect things to improve? Or do you tell yourself, I'm just not good with money? things always happen to me. And Seligman's work here would suggest that that more pessimistic mindset is going to have really a self-reinforcing effect. Couple other studies on optimism that I want to cite here. These are going to relate to both personal finance and health. First one is finance related. This is by Gladstone and Pomerance in 2025, a systematic review with a sample size of over 143,000 people. And they determined that optimism, those that had an optimistic attributional style, was associated with an average, so it's an average, some higher, some lower, of 16.9 % increase in savings. And this makes sense if you're optimistic, if you think that tomorrow's gonna be better than today, or you think that there's a reason to save for tomorrow, you're gonna put money away. If you think, well, you know what, only bad things happen, there's no reason for me to put money away. you're not going to save. So this optimistic viewpoint is associated with a higher savings rate and savings rate is going to be the main driver towards your overall financial health and well-being. Let's link then optimism to health. Couple studies here, Rosansky et al in 2019, systematic review of over 229,000. So very large systematic review across 15 different studies. and they found that optimism was associated with a 35 % lower risk of cardiovascular events and all-cause mortality. So being optimistic, your 35 % lower risk of cardiovascular events and all-cause mortality. That's unbelievable to me. Just that outlook at optimism is protective against cardiovascular health events and all-cause mortality deaths from all causes. Enol in 2019 looked at a study of 69,000. This study was a little bit skewed. was 69,000 women and 1,500 men skewed more towards women, which is nice to see for a change. Most studies skewed towards men, but I did want to point out there was a gender difference in this study. Still a very large sample size. And they found optimists live on average 11 to 15 % longer than those who aren't optimistic. An optimist had an excellent chance of achieving what they call exceptional longevity, which is living to be over the age of 85. Let's combine these two studies and really dive in here. So if you're optimistic, 35 % lower chance of cardiovascular events and dying from any cause. If you're optimistic on average, you're living 11 to 15 % longer and you have an excellent chance of achieving exceptional longevity. So it's really good if you're optimistic that you have up to a 17 % higher savings rate, because you're going to need it, because odds are you're going to live longer, which is all great news. So to summarize and to look ahead a little bit, I'm making the argument for cognitive optimism. This was a quick dive into some data and research showing that optimists save at higher rates and have better health outcomes. This cognitive optimism is aligning your personal goals and your situation with the evidence that is again indicating optimism is correlated with improved financial health and general health outcomes. Keep in mind we're wired and conditioned not to be optimistic. We prioritize detecting threats over opportunities. This has an evolutionary basis. We are also subject to loss aversion. And pessimists just sound smarter. While those of us, and I put myself in this bucket, I'm an optimist, those of us that are optimists, we sound out of touch with reality, and at worst, we sound like we're trying to sell you something. As you're considering this, I would really encourage you to think about, though, the evidence supporting these positive outcomes from the optimistic viewpoint, again, that is supported by data. Now, my emphasis on cognitive optimism is not to suggest a stress-free future. Rather, this is a mindset that fosters planning for your unique future by anticipating general improvements over time. And you're planning on these improvements based on the evidence and support of optimism, as well as the work that you're going to be doing to rehab your finances, to know your numbers, to get your financial house in order. So this optimism is supported by numbers and data. Expecting improvements over time is also the hallmark of our work as educators and healthcare professionals. So I'd argue it stands to reason we can apply this thinking to our own financial health. Big picture, considering and potentially accepting this cognitive optimism helps when we unpack money scripts. Again, more is going to be coming out in a future episode and when we consider risk. We can't just go through life blindly saying I'm optimistic and avoid thinking about risk because risk is very real and it needs to be addressed. And because of that consideration, we're going to be covering risk as the topic of our next episode. But we start with the good news first because we're wired for that negativity bias. I wanted to lead with the good news with the optimism first before we dive into risk in the next episode. Thanks so much for trusting me with your time and attention. I do look forward to connecting with you in the next episode. And in the meantime, think about how your outlook may be impacting not only your financial health, but your overall health as well.
