It is just past the halfway mark and so far 2011 has been a pretty busy year for me. I’ve expanded and refined my fee-for-advice services, given my website a facelift, launched two new newsletters – one for clients and one for advisors – and currently I’m working on the very first Debt & Cash-Flow Management Certificate Course with The Knowledge Bureau.
I also wrote and published my second book: $pent. The focus of the book is how our financial personalities or “Money Mindsets” as I call them, determine our decisions when it comes to borrowing, spending, saving and investing. My assertion is if we know and understand what makes us tick when it comes to our finances, we stand a far better chance of managing the money we have to build the life we want.
Enough about me though. What can I do to help you with all of this stuff I’ve been working on?
Share it with you, of course.
When it comes to how people use their money, there is more than just math and common sense at play. Our personalities, feelings, temperaments and upbringing have a huge impact on how we use money whether we realize this or not. Even feeling certain you are not emotional about money has an emotional component. During my decade in the industry I have listened to thousands of people talk about their money.
In particular, because of my fascination with debt and cash-flow, I have witnessed a lot of emotional discussions. I don’t mean weeping on the desk over debt. I mean I watch people literally have a conversation with themselves about their money. It often starts with what they think I want to hear, and then it moves to a more honest version of what they feeling about their finances and finally ends at a place where they get clear about what they really want from their money.
Here’s a great example.
I wrote some recent blog posts about this particular couple and their original goal to buy a cottage.
When I first met them, they told me how great both of their incomes were and how excited they were about their financial future. A few minutes in (without me asking many questions) they begin to talk about wanting a cottage. Then, they explained why they wanted it. They said it is so they can get away because work is hectic but in reality what they really ended up saying is…We are working so hard and we don’t feel like we have anything to show for it.
When we exposed the reasoning behind this goal, what they thought they’d get from a cottage –rest, relaxation and time off – in the end, it was really going to amount to even more stress and little time to enjoy it. When it came down to it what they wanted was time and to feel better about their debt and spending situation and adding more debt to their over $300,000 pile was going to equate to less time and more stress.
This client’s cash-flow and debt plan allowed one of them to cut down the number of days they worked every week, and one to reduce the excess workload. The problem of time was taken care of and thanks to their plan, their debt repayment kept on track. I gave them exactly what they wanted but it didn’t come the way they expected. The tail was wagging the dog but because I could see their Money Mindset early on, it was easy for me to come to the best conclusion for what they were really asking for and be able to explain it in a way that they could absorb and run with.
There are seven different Money Mindsets. You’ve got one and so does every one of your clients. There is The Bunker, The Brick Wall, The Undercover Agent, The Polly Anna, The Dreamer, The Justifier and The Masquerader. None of the Mindsets are bad, none are good. They just are. You can be any one of these and be independently wealthy or completely broke but the Mindset dominates the way you think and react to money. Knowing this about your client could really help you understand how to work with their spending and investments.
For an example of how to deal with a Brick Wall, click through below.
