Ep 191: The Negotiating Skills You Learn In A Brothel (And Other Wisdom From An Economist) 

Summary: What do the legal sex trade, the surfing world, gambling, and horse trading all have in common? They’re some of the unlikely places economist Allison Schrager has spent years studying risk, and we were blown away by the insight she shares with us this week on risk management and negotiating. Allison, who is also the co-founder of risk advisory firm LifeCycle Finance Partners, gained some of her more interesting takeaways when researching her book, “An Economist Walks Into A Brothel: And Other Unexpected Places To Understand Risk.” She says she was inspired to study the economics of personal finance because she wanted to help make some of life's most necessary economic lessons more accessible. In many cases, all people need to succeed with their finances is education, she says — even something as simple as understanding the dangers of procrastination can help people make better choices. As part of her research for the book, Allison spent time with sex workers and managers at Nevada’s bunny ranch, a legal bordello. There, she learned about the risks these women take, and how we can apply some of their negotiating skills to our daily lives. Allison surveyed the sex workers on what they charge customers, and was impressed by some of the negotiating tactics they employ — rather than having set prices for their services, these women negotiate for each individual transaction. Allison says that these conversations eventually ended up changing her own attitude towards risk. Perhaps hearing 'no' is not that big of a big deal — if you don't hear 'no' regularly, then you're not asking for enough, she advises. When it comes to negotiating in other career fields, Allison advises offering a "menu" of options to your boss so there's no confrontation, and no single demand put in front of them. She also details why your peak earning years as a sex worker are your mid-40s, why we end up taking more risk when we feel safer, and how we can all take a more sophisticated attitude to risk. Then, in mailbag, Jean tackles a quintessential money trade-off question, advises a woman who is underpaid in her field, and guides an Australian couple residing in the U.S. on some of the best investment strategies for expats.