The way you think about money has a significant effect on the way you live, and if you happen to be a financial professional, your feelings about money are certainly going to affect how you work with clients.
Tampa, FL (PRWEB) February 26, 2013
With the stock market registering its worst decline so far in 2013, the Dow plunging more than 200 points (1.55%), some investors are likely feeling a bit jittery, while others are calmer, believing that long term everything will be all right. FPMG, a performance management firm, understands that the psychology of money has a lot to do with people’s diverse reactions to this event and others like it.
“The way you think about money has a significant effect on the way you live, and if you happen to be a financial professional, your feelings about money are certainly going to affect how you work with clients,” says Denise Federer, Ph.D., FPMG’s founder. “It can be invaluable to take the time to think about what money means to you, a process that may often uncover financial fears and irrational thoughts.”
FPMG believes that money messages—people’s earliest memories about money, often passed down by their parents—influence financial perspective in an extremely powerful way. Federer says those who are taught the value of saving money as children are likely to be savers themselves as adults, and they’ll pass on that virtue to their children—and the same can be said for those who grew up in an environment where spending was the norm.
She goes on to note that those who were raised to believe that money equates to power, freedom and control are going to behave much differently than those who were taught that money isn’t a good thing. Among the money messages some people learned as a child are:
- You have to work hard and suffer to earn money.
- Having a lot of money isn’t “spiritual.”
- Money is too hard to manage.
- You’ll never be rich.
“If you were brought up with these beliefs, you can actually sabotage yourself as an adult with respect to making financial decisions,” Federer says. “Your upbringing will also have a lot to do with whether you’re a prosperity thinker or a poverty thinker.”
She explains that those who focus on prosperity believe money is for pleasure, and they derive joy from spending it; money gives them a sense of abundance and optimism, and they believe they’ll always make more. On the other hand, poverty thinkers have a mistrust of money and negative feelings about it; they operate out of pessimism and fear. They’re reluctant to spend money and never feel secure or as if they have “enough,” regardless of the truth about their finances—and their feelings aren’t necessarily based on reality.
FPMG believes that living at either extreme can be a problem; those focused on prosperity need to ensure they’re not living above their means, and those more worried about poverty can look like they’re not generous, even to their own family members. It shouldn’t be a surprise that mixed monetary philosophies in marriages can result in significant tension over finances.
“It’s critical to be aware of your money messages and how they influence your decisions and actions. In particular, you must be willing to shift your thinking to get out of ‘victim mode’ and find the balance that works for you on the prosperity-poverty continuum,” Federer says. “Whether you’re making investments for yourself, or serving as a trusted advisor to clients, you must understand your beliefs about money, and work proactively to ensure they don’t affect your behavior in ways that result in negative consequences.”
FPMG is a Florida performance management consultancy dedicated to guiding successful people to be their best. Based in Tampa, we help you uncover the non-financial issues that impact the bottom line. FPMG offers consulting for family business problems, financial advisors legacy advising, leadership development, and more.