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What stories are you telling yourself about money?

money stories

Have you ever had one of the moments when you see, read or hear something that completely challenges assumptions you’ve previously had? The kind of moment that everything you thought to be true was just how you saw the world but others didn’t.

Not so long ago, when I had first started this business and I was in the early days of not having any clients I would worry that the business might fail. Then, listening to a podcast in the car one day the host, Carl Richards, told a story about a similar time of his life and a conversation he had with his wife which went along the lines of:

Carl: “Are you not worried it might not work?”

Carl’s Wife: “Well, I can be if you want but I don’t see what good it would do.”

That anecdote really hit home for me. It instantly changed my thinking:

You mean I don’t have to worry because, actually what good does worrying do?

Aligned to that thought pattern was the acknowledgement that there are things we can control and there are things we can’t (watch this space for a post on that theme). All I need do is to show up and do my best with the things I can control and not worry about the things I can’t control; because what’s the point in worrying about something I can’ t control?!

I’d love to be able to tell you that I’m 100% free from worry or that I always just focus on the process and never get hung up on the outcome, but I wouldn’t be human. But at least when I find myself it that unhelpful thought pattern I’m more easily able to correct myself.

A Bolt from the Blue or a Drip, Drip, Drip

Often these insightful moments can come out of the blue but sometimes it can be a drip, drip effect as you consciously and unconsciously gather information that challenges your perspectives. The lessons I learnt about investing that form the bedrock of my investment philosophy were a result of a drip by drip awareness.

The assumptions and preconceptions we carry around with us are usually hard-wired from an early age through the messages our parents or other influencers send us directly and indirectly. It can also be through positive and negative experiences we have. Neuroscience teaches that our subconscious brain is continually working in the background to ensure our behaviour fits with our unique belief system: “don’t do that you might get hurt, do that instead it is safer.”

As a species, this inbuilt defensive system stopped us getting eaten when we first walked the planet but it is long due a systems upgrade because it can inhibit positive responses that would give us a more holistic view of the world.

These messages and experiences shape our approach to life in adulthood. They influence everything from our relationships to our careers: a hard-to-please parent can create a perfectionist behaviour style. Being told you are ugly may likely lead to self-confidence issues later in life. As much as we like to believe we consciously control our actions, the reality is that there are millions of bits of data being processed by our brains that influence our response long before we consciously take action. By our mid-30s most of our behaviour is run by internal brain functions we have no conscious control over.

And Money is No Different

The relationship we have with money is no different, indeed, perhaps more emotionally charged. We will all know people who are spendthrifts and people who are skinflints. These behaviours are likely to have been ingrained with childhood experiences and are opposite reactions to the same general experience: “we didn’t have any money growing up so I’m not wasting any I have now” or “we didn’t have any money growing up, so I’m going to enjoy what I have now”

Two opposite behaviours from the same base experience: not having money in childhood so I’m going to do something about it. Both behaviours may be deeply ingrained in the individual’s psyche but to the other person, they are illogical: “how can you be so reckless with your money? What if you need it?” compared to: “why are you so miserly with your money? Life is for living, you might get hit by a bus tomorrow!”

The same is true for the risks people take with their money. One person may see their parents lose a lot on an investment which confirmed to them that risk leads to loss. Another person may have been the child of a successful entrepreneur and see risk-taking as a necessary way to generate wealth.

None of the above examples are right or wrong but sometimes it is a case of being able to shine a light on our assumptions and question how well they are serving us.

Yes, I might get hit by a bus tomorrow so there is much about today that should be enjoyed but equally, I need to know that my future self can continue to enjoy the lifestyle I’ve grown accustomed to.

Yes, taking unnecessary risk may be foolish but not taking some risk with my money is risky in itself if I want to know that I can maintain the purchasing power of my money as long as I live.

Acknowledging that our attitude towards money is not THE right way and accepting there may be more appropriate behaviours can be enough to free the shackles of past learned behaviour and start making smart financial decisions. Decisions that can lead to the outcomes that you want to see with your life.

Financial Planning is Both an Art and a Science

As with my revised view of what I can do to grow a successful business (focussing on the processes, not the outcomes), taking the same approach to planning your future starts with making smart financial decisions rather than worrying what may be.

We can’t control what the investment markets do, nor what future legislation may permit or restrict. Neither can we control whether we will get hit by a bus tomorrow (other than looking when we cross the road). We can control the process of understanding what we want our futures lifestyles to look like, what that the cost of that will be and what we can do today to make sure tomorrow is the one we want.

If you want to understand if the stories you are telling yourself about money are limiting the chance of you living your ideal future contact me to see what smart financial decisions you can take.

 

Photo by Corey Blaz on Unsplash

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