Emotions play a huge role in everything we do, especially when it comes to money.
getty
The title of my book is Emotionally Invested. I picked that title because money is freakin’ emotional! Understanding this is the key to finally getting to the root of your money woes and eventually achieving greater financial happiness in retirement.
I’ve found that people don’t want to be billionaires. (Well, most don’t.) They don’t care if Warren Buffett is short on corn futures. They just want to feel financially secure and stop worrying about money.
Identifying why you handle money the way you do and why you’re in your current financial situation can be a life-changing experience. I know. I see it every day.
When I started as a financial advisor, I thought I would be a natural at the job. I’d worked in finance at Fortune 500 companies. I understood stocks, bonds, and investments. Most importantly, I believed that everyone was just one chart, graph, or Excel spreadsheet away from achieving financial happiness.
But my world wasn’t my client’s world. They didn’t get what I was saying, and I didn’t understand how they made—or responded to—financial decisions. I’d thought I would just tell them what they should do, they would do it, and they’d be happy and grateful. How arrogant and stupid of me!
I eventually realized that most people aren’t meeting their financial goals because of their relationship with money. It’s not that they lack knowledge. It’s that they don’t grasp why they did or didn’t make certain financial decisions.
So, I learned you can’t be an effective financial advisor without delving into people’s worries, fears, and relationships with money. In other words, their Money Why. In fact, the top reason for client satisfaction with financial advisors is not exceptional portfolio performance but rather feeling that “me and my goals” are deeply understood.
Some years later, I learned there was an official name for the approach I was taking: behavioral finance. It’s based on behavioral science—the study of human behavior through experimentation and observation.
The thing is, what we’ve learned about how humans behave is rarely applied to finance. Most money advisors (then and now) abide by the rational man theory: if you give people enough info, they’ll make a highly rational decision. That’s insane!
We are human beings—we are never purely rational. Emotions play a huge role in everything we do. When I started helping my clients identify and understand their Money Why, things finally made sense to them.
After more than two decades of “financial therapy,” as I prefer to call it, I wrote a book. It’s intended for individuals and couples who feel frustrated and overwhelmed by money and have a hard time talking about it. And believe me, that’s a lot of people.
Instead of telling you what stocks or mutual funds to buy, my book contains my most important observations from working with more than five hundred individuals and families for over twenty years.
Chief among them is the different Money Whys people bring to the table, how these Money Whys subconsciously affect financial decisions, and, most importantly, how you can identify yours (and your partner’s).
Knowing your Money Why can change your financial world—and no, I’m not exaggerating.
Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Evans Wealth Strategies is not a registered broker/dealer and is independent of Raymond James Financial Services. Every investor’s situation is unique, and you should consider your investmentgoals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. You should discuss any tax or legal matters with the appropriate professional.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Mary Clements Evans and not necessarily those of Raymond James. Evans Wealth Strategies 1134 Pennsylvania Ave., Emmaus, PA 18049, 610-421-8664 www.evanswealthstrategies.com
