The Dumb Tax

By Mark Bertrang, The Creator of the Financialoscopy® on Thursday, October 19th 2023


In the book - The Road Less Stupid by Keith J. Cunningham, the author shared a concept that made me laugh: the concept of “the Dumb tax.” We have already heard about federal income tax, capital gains tax, short-term capital gains tax, dividends tax, ordinary income tax, and state tax, but what the heck is a “Dumb tax”? According to Keith Cunningham’s book, “The key to getting rich (and staying that way) is to avoid doing stupid things. I don’t need to do more smart things. I just need to do fewer dumb things. I need to avoid making emotional decisions and swinging at bad pitches” (Cunningham, 2018). You need to stop and think.

This made me think about the amount of time that people spend on social media. They keep on scrolling through posts, going after that elusive boost to their dopamine levels. They want a hit of “Oh, look at where they’re going on vacation, look at that brand-new car, or look at the wonderful new house they just got.” People get this dopamine rush because they see all this stuff on social media, and they want to have it for themselves. It’s not because they’re not making enough smart decisions; it’s because they’re making bad decisions based on a dopamine rush.

He goes on to say “Emotions and intelligence work inversely. When emotions go up, intellect goes down. Optimism is a deadly emotion in the business world. Warren Buffett said it best: ‘Optimism, is the enemy of the rational investor’ …. More often than not, critically thinking about what could go wrong and doing the work to mitigate those risks before taking action is abandoned in favor of comfort zones, the path of least resistance, and speed (instant gratification)” (Cunningham, 2018).

Unfortunately, this is exactly how we’ve been programmed since the beginning of time. When cave people were hungry, they got the urge to go kill something to take care of that hunger. You know how difficult it was in the beginning for people to decide to become farmers, i.e. to break ground, plant seeds, weed, and cultivate. It went against their nature to have the cognition to dedicate an entire season to planning, farming, and harvesting to collect enough food to get them through the winter. That is why evidence of early humans shows them walking the earth and traveling from place to place. They followed the paths of animals because they had to hunt those animals as their only food source.

That was a huge mental shift from instant gratification (I’m hungry, let’s go kill something) to planning, planting, and nurturing a harvest. This is still the reason why 401K balances are so low. People would rather have the boat, the car, the trip, and the experiences. Their dopamine levels go way up. You need to control the drugs produced inside of your body that work against you.

Sometimes, we are the adults in the room. We help people plan for the long run.  I don’t mean that we’re the adults telling you “No, No, No, No, you can’t have this or that.” We realize that you have to have some fun along the way. We just help you determine for yourself how much of your time and money should be spent on fun, and how much of your time, money, and thoughts should be towards planning for tomorrow. There is already enough taxation in your life. If you are also fearful of paying a “Dumb tax”, then perhaps it’s time for you to schedule your Financialoscopy®.


Cunningham, K. J. (2018). Chapter 1. In The road less stupid: Advice from the chairman of the Board. essay, Keys to the Vault. 


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