THE FISCAL BLUE PRINT
WITH COACH JEFF MONTGOMERY
Episode 5: Mind Over Money
We have an extremely important topic to talk about this month and that topic is your mind! And your mind specifically in relation to your money! We’re going to talk about how your mind works and how you think about money. Sometimes this is not an easy subject.
From my experience most people don’t like to talk about money especially when it comes to some of the decisions and possibly mistakes they may have made in the past.
We’re going to have you think about this in a different way and have you ask some tough questions of yourself including how you think about your future and what that future looks like.
In this series were going to understand the behavioral side of finance and why people make some of the decisions they do. We are going to dive into the mind and examine our instincts, our emotions, our perceptions and our cognitive abilities.
Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So unless you’re a client I can’t give you advice because I don’t know you. So think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser , and your financial adviser………….right? that’s just common sense
(2:40) Practical Planning Segment: There is war going on for your money, but even more importantly, there’s a war going on for your mind!
This starts at a very young age with the Stock Market Game in elementary school as young as 10 years old. There brain isn’t even developed enough to understand the difference between speculating/gambling vs prudent investing. On top of that, the adults teaching them this game don’t understand this either.
That war is extremely important because I don’t think it’s too heavy to say that your future is going to depend on your ability to win that war and protect yourself from that mis-information.
Money is the fuel for life’s journey, and that fuel should be in alignment with our core values. What I mean by that is that you’re going to need money for your dreams. The CPA Ed Slott has a saying that you really don’t want to settle for the government’s retirement plan. (i.e. medicare, Social Security only.)
(6:00) Right or wrong, the government likely won’t be able to support you if you mess it up.
Getting the investing part wrong can destroy a lifetime of saving and investing – your dreams destroyed.
There was a story about a doctor a while back, he thought that he truly understood investments and was set to retire. Well, he had over $3 million and lost about 85% of his portfolio in the .com crash. Why did this happen?
Everybody has fears: These fears come in different forms: maybe your income, health, saving for college, retirement. But essentially, they all boil down to a fear or this worry of not being able to make it! This is called survivorship stress. Most investors live in a state of doubt, fear, apprehension, anxiety, desperation, and suffering about what will happen.
(10:00) The media sensationalizes and that adds fuel to our fears. Lets face it! Many people think the media’s job is to inform. But really, they are in the advertising business and the
directive is to increase ratings! Why?
(11:28) Types of Wall Street Bullies: The Con Man, The Prognosticators and The Gurus.
The media LOVES to highlight all of these people, but there is usually an underlying motive. (selling a book, advertising, hedge funds, etc.)
(15:00) Four areas we are going to explore when it comes to our minds and money: Cognitive: What we know. Perception: How we see things. Instincts: How we behave. Emotions: How we feel.
The biggest problem that you will face when investing is that your emotions, instincts, perceptions, and the media feed on each other to get you to do the wrong thing and make investing mistakes.
(18:00) Coachable Segment- Write down your 3 biggest fears when it comes to money. Think about the underlying premise when reading any publication or news outlet. Ask yourself, are they truly helping you? Or are they simply stoking the fears that you wrote down?