Wealth and Emotions

Out of curiosity I often type the titles of my posts into Google search just to see what pops up.  Type “wealth and emotions,” into Google Search or click the link for a glimpse of the wide range of posts published on this topic.

Whether you like it or not your emotions – and how well you understand and account for them – have a huge impact on your capacity to build wealth.

Investing Your Emotions

Most great investors would tell you when they keep their emotions in check they almost never lose and almost always lose when they allow their emotions to rule the day.

It gets even better – all of us deal with emotions differently and are more prone to certain types of emotions than others.  For some of us anger is the dominant emotion while for others it is fear, shame, or even happiness and joy.  How we interact with these emotions – whether from a place of stress or a place of stability – can either hinder us or help us in our efforts to build wealth.

Consider the recession induced by the sub prime mortgage crisis of 2008.  Or the the dot com bubble bursting in 2000-2001.  The markets declined rapidly and left many investors watching their portfolios slide down the seemingly endless slope.  Individual investors as well as seasoned fund managers panicked and let fear spur them on to sell, sell, sell!

At exactly the wrong time.

When the market is going down you want to buy, not sell.  Selling on the way down is how you lose wealth.

The fear incited by watching stock indexes plummet causes normally rational people to forget everything they know about how the market works.

Seasoned investors and most savvy individual investors understand the market will eventually start climbing again and in relatively short time surpass market levels prior to the crash or recession.  Over the history of the stock market, the market has always grown.

The key is to diversify your investments, stick to a process for selecting, buying and selling, and sit tight during the storm, possible looking for opportunities to buy more shares of solid mutual funds or index funds at a discount price.  Remember when the market is down, shares are generally cheaper, and thus you can purchase more shares for your investment dollars and benefit from the returns when the market swings back up.

If you invested in one or two risky single stocks and the companies are about to implode, you probably want to sell as quickly as possible and contemplate the lessons to be learned while licking your wounds.  If this is you, I almost guarantee you bought those stock based on emotions and not on solid research with evidence of long term growth potential.

Emotional Wealth

I tend to be methodical and rational in my investment choices and leave things pretty much alone.  My advantage here is that I am a highly rational person who by nature does not tend to make big decisions based on emotions.  I tend to do the opposite in an emotional state; I simply make no decisions at all.  This is not necessarily a good thing.

When I am in a place of stress, I tend to withdraw from relationships and hold on tightly to liquid funds and possessions.  I make choices based on a fear of not having enough or being seen as cheap by my friends when I ask for a separate check.  If I don’t think I have enough to split the bill evenly, I will avoid the outing altogether.

The crazy thing is that this fear is often irrational and dare I say selfish.  Oh, and then pride steps in and refuses to accept charity when all my friends want is to be gracious and generous out of the love in their hearts.

Earlier this year I started new daily practice of short meditation followed by a brief daily journal right after my daily scripture reading.  The meditation allows me to practice awareness and clear my thoughts, and the morning journal exercise gives me an opportunity to set the course of my day.

In my journal I include the scripture I have read, three things I am grateful for, location, weather and emotional state, concluding with random thoughts such as what I need to do that day, things that I am wrestling with, or that kept creeping into my meditation.

Starting the day being grateful and taking time to take stock of where I am emotionally has had a huge impact on my ability to stay balanced.

No matter what we do, we all fall prey to our emotions and all become overwhelmed at times.  The idea is not to avoid our emotions, but to learn how to embrace them well and give them space to take their course without bankrupting us financially or emotionally.

Hey, ever heard the phrase “emotionally bankrupt?”  Google it.


Wealth & Personality

When I first thought of this particular blog post I had no idea what kind of image I would find to accompany it.  When I entered in a few key search words in Adobe Spark, numerous images of colored pencils came up.

Before I get into the meat of today’s post, I want to share something with you.  As a child, and even now and again in my adult years, I loved drawing.  Especially with pencil.  It just had a texture and feel that I loved.  Then I took an art class my senior year in high school and fell in love with colored pencils.  I created my personal masterpiece (okay, I consider it the best art piece I have ever done) in that class with colored pencil.

So searching for an appropriate image, these colored pencil images really stuck out because regardless of which colors I might like the best, I needed all of them, and sometimes even found new favorites.  The real fun started when I realized I could use several colors and blend them in sequence to match the colors I saw in front of me.

The picture you see with this post was perfect…not only did it show different colored pencils which could represent different personality types, it also featured a flower tucked between two of the pencils that I felt represented those personalities that have to be just a little different, who embrace life full on and whom we love to have in our lives (even if they aren’t the best with finances).  And thus we blend.

You may have guessed what this post is about if you’ve been following me for any length of time.

It’s about how our unique personalities influence our interaction with finances and wealth.

Most of us realized at an early age that some people were better at math than others, including ourselves (I admit this even with a BS in Mathematics).  At some point we also realized that some people were better with finances than others.  And they weren’t always the Math nerds (or the business majors).

So this post is about how personality drives our interaction with money and wealth more than intellect ever will.

We are all very different people, with different personalities, different personal tastes, and certainly different backgrounds.  What makes us think, then, that we will all encounter and deal with money the same way?

In the American culture we are brought up and educated that we are all individuals who can be whatever we want to be.  This is a lie.  Not that we cannot achieve what we seek to achieve, but not all of us are cut out to be astronauts, or FBI agents, or accountants, or computer programmers, or even entrepreneurs!

I would like to believe I am an entrepreneur, but I have had to deal with the fact that while I have entrepreneurial leanings, I am not an entrepreneur in the true sense.   I know because I am close friends with a few of them, and we are so different in many ways.

What I have figured out is that I complement true entrepreneurs because I easily grasp where they are going and can build the initial infrastructure to support them, although I would likely have analyzed the idea for years without ever acting on it if left to my own device.

But on to personalities – there are so many beautiful and crucial differences between us as humans.  Some of us are very serious about finances and spending categories and sticking to a budget, while others see finances merely as means to an end, not worried about going broke if we have experienced a memory of a lifetime.

I for one have struggled my entire life with this and am still learning to let go and simply accept when friends suggest last minute once in a lifetime adventures.  I have turned down numerous opportunities that many of my friends would have given me the money to experience.

My personality type tends toward self-sacrifice before asking friends, even to the point of extremes (thankfully, I am gradually learning how to accept the generosity of friends – not an easy task for my personality type).

I ought to at least talk about my personality type.  I am an INTJ on the Myers-Briggs/Keirsey Temperament Sorter and a 5 with a 4 wing on the Enneagram.  On the DISC profile I am a C with a strong S and dominantly C under stress.  In general terms I am an extremely introverted, very rational, process oriented individual who is also creative and fairly in tune with his emotions and understands how personalities interact on a primarily intellectual level – the emotional content is mostly understood through observation, study and knowledge of types.  (The links here are only suggestions and are not affiliate links – there are many places you can take the tests for free for initial findings – I do recommend paying for at least one of them as the paid results are often more enlightening).

So I happen to be decent at math and really good at a personal finances and how people interact with money.  But I desperately need friends to drag me out to experience things that I would never do on my own.  So a balance is always needed in dealing with money – save for the future without missing the opportunities to enjoy the present.

As this topic is quickly outpacing the length of most of my posts, I will draw things to a close here with a final thought, and an invitation for comments if you would like more on this topic.  I am only at the beginning of my understanding of how each personality type interacts with money and finances, but am willing to educate myself as needed to answer the call if there is further interest.

Final thought for this post:

You are who you are.  If you are terrible with money, you need someone in your life who is good with money.  If you are great with money, and maybe a little like me, you need people in your life who know how to live and experience life.

Sometimes they pick up the tab.  Sometimes you should.  Just don’t die rolling pennies alone.


Wealth and Knowledge

Many of you might believe wealthy people all have high IQs, or all people with high IQs are really wealthy (or ought to be).  What might surprise you is how many regular people just like you are are wealthy.

IQ is not a determining factor in one’s ability to acquire wealth.

In fact, acquiring and maintaining wealth has very little to do with head knowledge, and much more to do with behavior.  Disciplined behavior trumps a know-it-all every time.

Smart people regularly do stupid things with money and wealth, often losing everything.  Why?  Because they fool themselves into believing they are smarter than the market and everyone else, and there is no way they can lose.  More often there is no way they will win.

Yes, there are some rare individuals who are smart and disciplined and hit the jackpot, but they are extremely rare, and would be the first to admit they are guessing 80% of the time and working overtime to reduce the impact of the inevitable downside.


The most brilliant person in the world can live their entire life as a pauper.  Book smarts and head smarts are not effective for obtaining wealth on their own without action and calculated risk.

Knowledge can puff people up in their own minds and make them overconfident, taking action without calculating the risk, or it can cause analysis paralysis, calculating risk to the nth degree and taking action too late or never at all.

Knowledge is good, and it helps to be smart, but you don’t have to be a genius to become wealthy.


Dave Ramsey, creator of Financial Peace University and best-selling author of The Total Money Makeover, talks about personal finances as being 20% head knowledge and 80% behavior.  Even if you aren’t a math major, you’d probably agree you could do more with $80 than with $20.  Four times as much.  Sometimes I just like to show of my math skills.

If there is any truth to this percentage split, then why on earth would we put so much emphasis on what we think we know instead of what we do?

Can anyone become wealthy (legally, you criminals) without saving at least some of their hard earned income?

Oh, of course, win the lottery.  Sure, they get a huge amount of money all at once, but it rarely makes them wealthy.  A quick online search turned up several articles citing the National Endowment for Financial Education as reporting 70% of windfall recipients end up broke.

70% is a lot closer to 80% than 20% if you catch my drift.  If you read the myriad articles about why lottery winners go broke, it’s pretty much all about their behavior.

Consider the following scenarios:

  1. Bob is a regular guy working hard to earn a decent income.  Bob decides at age 20 to save $100 a month for retirement and continues to do so until he reaches age 66, yielding an average 10% annual rate of return.
  2. Sam is also a regular guy working hard to earn a decent income.  Sam, however, has a plan.  At 20 years of age Sam starts spending $25 a week or $100 per month on lottery tickets, dreaming of that day when he’ll win the jackpot.  Of course, Sam wins sometimes, but breaking even is a long shot at best.  The odds are actually stacked against him ever breaking even. Yet he continues to play the lottery until he reaches age 66, and let’s say he hits a long shot and breaks even.

Can you guess which one retires wealthy?  Yep, it’s Bob.  Every time.

Bob invests a total $56,400 over 47 years and ends up with $1,151,000 in his retirement account at age 66.

If Sam breaks even, he ends up with the $56,400 he spent on lottery tickets and won back.

I like Bob’s way better, even if Sam hits the Jackpot.  Bob has built wealth through behavior and discipline and is not likely to lose his wealth.  Sam, however, has not developed the discipline or behaviors to use money wisely, and odds are he will lose everything long before he is ready to shuffle off this mortal coil.


Let the smart people take all the chances and risk losing everything while you stay disciplined and retire wealthy.



Wealth and Money

Wealth and Money

When most of us think of someone wealthy we think of Hollywood starts or billionaire CEOs. The reason we think of them first is the illusion of how much money we think we know they have.

I say illusion because many of those we consider wealthy, are wealthy on paper only, meaning that most of their perceived wealth is tied up in real estate, stock valuations, or future royalties.

Some of those we consider wealthy actually ARE financially wealthy, like Bill Gates and Warren Buffet, but many of them are not.  Think about how many pro athletes, music stars and movie stars end their careers and lives nearly broke.

So what is the relationship between wealth and money?


Money is currency.   Money is whatever we are willing to accept in return for supplying goods and services.  Money can be paper or coin as we know it in the modern world, or Money can be livestock, potable water, real estate, stocks in a company, or a service in kind of some sort.

Money changes forms as often as it changes hands.

Acquiring money is not the same as acquiring wealth.  Wealth is a much broader and more complex concept than money.  Wealth far surpasses money as a concept.


When we finally grasp what wealth really is, the entire universe opens up to us.  When we separate money from wealth, we open ourselves to areas of wealth we might never have contemplated:

  • Wealth of knowledge
  • Wealth of relationships
  • Wealth of integrity
  • Wealth of morality
  • Wealth of wisdom
  • Wealth of experience
  • Wealth of inspiration

We can find wealth in whatever we do and wherever we are.  It is up to us to perceive it as wealth.

If we are merely looking for money, a paycheck, then true wealth will always elude us.

True wealth comes when we focus on what we can contribute.


Wealth and Work: Too far in to Get Out now?

Do you feel like you are Too Far In to get out now?

In the finance world their is a concept called “sunk cost bias,” which refers to the phenomenon where an individual or company has spent so much capital on an investment or product they cannot stop even when failure is the only outcome.

They have gotten too far in (spent too much) and cannot justify the wasted time and cost (investment) if they drop the product.  Here is a definition from businessdictionary.com:

Expenses paid for previously that are not affected by current or future decisions and costs that should be ignored when analyzing new investment activities.

Read more: http://www.businessdictionary.com/definition/sunk-cost-bias.html

What does this have to do with our job/work/vocation/career?  More than you might think.

Expenses paid for previously that are not affected by current or future decisions

At any point in our career path, we can look back at the work we have done, the various jobs we may have had, the rewards, raises and promotions we hopefully earned along the way, and all the things we helped accomplish.

None of that can be altered by the decisions you make now or in the future.  It is what it is.  Your decision to stay in a dead end job because you only have 10 years left to full retirement doesn’t change what you accomplished in the past, it doesn’t affect the promotion you either got or didn’t get 4 years ago.

The only value of the past is the experience you can take away from it.   Some example questions to ask yourself might be:

  • What did you learn about yourself?
  • What things did you do better than anyone else?
  • What things did you loathe doing?
  • What relationships were helpful to you in getting to where you are?
  • What skills did you acquire that you can bring to a different job or career?

Our possibilities now and in the future are endless.  We need to look forward and stop worrying so much about what we have done so far.

Cost that should be ignored when analyzing new investment activities

One of the biggest problems I had with leaving my previous career was getting over the idea that I had put too much time in to leave now – I would be giving up everything I had worked for so far.

Many colleagues stayed on in jobs they no longer enjoyed simply because they only had 5 or 10 years left to qualify for early retirement.

Then they would stay on 5 more years to max out their retirement benefit.   Sadly, a few timed their retirement perfectly to get the max benefit, only to pass away within a few years after retiring.

As stark as that sounds, this happened to more than one colleague I knew personally, and even more whom I knew professionally.  I took this lesson to heart when I made my decision to leave.

I could not justify staying in a career simply because I was only so many years away from one benchmark or another.  I left just three years shy of a full 20 years in, which would have significantly increased my retirement benefit.  But it wasn’t worth it.

I ignored the cost of 17 years in when I analyzed my options for a new career, a new vocation.

If you are facing a crossroad in your current career, analyze your new options, ignoring the cost or time in to date.  Set it aside and don’t allow it to skew your analysis for the future.

Moving on

Once we have done the clear analysis, and made a decision to move on or stay with a renewed sense of purpose, we can review our past efforts and glean out the experiences, skills, relationships, etc. that will serve us well going into the future.

These are not tasks we performed or even job titles we had.  This is an extraction of the valuable lessons, the interpersonal skills, and the expertise that we can continue to improve on and use to benefit our current and future endeavors.

Leave the titles and position descriptions behind and define your value in your own terms.

Wealth and Work: Co-opted Someone Else’s Calling?

Pursuing Someone Else’s Calling As Our Own

Have you ever wondered why you ended up in the career you are in?  Does it feel like you were pushed or pulled in that direction by other people?

If so, you may have co-opted someone else’s calling as your own.


Sometimes we are pushed into a career or a particular vocation because our parents, teachers, or friends pushed us in that direction.  This push could be along the spectrum of forceful shove to gentle nudge.  They may have done it unawares.  Sometimes they knew exactly what they were doing.

Most of us can recall at least one story where a child was pressured to become the first doctor, lawyer or priest in the family.  Or to follow in their parents’ footsteps, regardless of talent or passion for the family business.

Wolfgang Amadeus Mozart was pressured by his father to compose for years for people who did not appreciate his true talent.  Fortunately for all of us, Mozart eventually pushed back and pursued his love for opera.  This move destroyed his relationship with his father, but freed him to produce an unprecedented volume of compositions in a very short period of time.

Not all of us experience a strong push in our careers, but most of us have been influenced by our parents, teachers and friends because we love them and trust them.  We may have received slightly higher praise for efforts leading toward a favorable career versus a less favorable one.  Art is good as a hobby but no way to make a living; math, science and law are much more lucrative, responsible and secure.


Others of us may not have been pushed so much as pulled.  We identified ourselves with someone so strongly that we followed in their footsteps – we wanted to be just like them.

In this case we adopted their vocation or calling as our own, and while some may experience success in doing so, others pursue a futile fantasy.  In either case, we deceive ourselves and deny who we are.

When I think back to my own childhood, I remember the admiration I had for my brother, who in his early teens joined the local Explorer’s club and began volunteering at the local ambulance corps.  It seemed so cool, and he enjoyed it so much, that I wanted to do it also.  So I joined the Explorer group after him without really thinking it through.   Fortunately, it didn’t take too long for me to realize my brother’s calling was not my own, and I eventually wandered down another path.  (I have wandered down quite a few other paths since then – in fact my calling could end up being “wanderer”).

Unlike being pushed – where we feel a sense of resisting or pushing back, being pulled can feel like a free fall, or give the sense of being off balance, as if we are about to fall on our face.

Path, Pace & Purpose

The solution here is not to make drastic changes or even blame anyone, but to take a moment to stand still and observe the paths available to you.  Which one feels right?  Now imagine that path merging with your current path for period of time.  You don’t always need to leave the path you are on to journey down another.

Go slow – find your own pace and move forward with grace as you stumble here or there.  As you find your balance you can quicken your pace – you are in control – but not so fast you miss where the path turns left or right down paths less and less traveled by.  Remain present and observe.

If you feel like you have been pushed into the career you are in at this moment, take some time to reflect back on when you felt pushed, observe the dynamic of what was going on in that moment, and uncover what it was we were being pushed away from as this may provide clues about our true calling.

If you feel more pulled than pushed, ask someone close to you who knows you well to reflect back what they see.  When pulled we often need others to help us see what we were running from, which is often another clue about our true calling.

When you have reflected a while, move forward with purpose.