What Do People Want Their Money to Do? Part 1

Mitch Anthony

Money has the power to liberate or enslave us. Depending on how we appropriate it, money has the power to help us find significance or drive us further into despair. Money can be utilized in a way that introduces a sense of balance into our lives or be invested in things that do nothing but perpetuate and even accelerate the manic pace at which we live. Money can be used to create borders of security for our present and future lives or can be used in ways that up the ante on our daily anxiety level. Our attitudes toward money can be the difference between a state of contentment and a state of depression.

As one ship was carrying Pilgrim Fathers to liberty in America, another was simultaneously transporting a load of slaves to these seekers of liberty. They dedicated their lives to finding freedom yet used their resources to perpetuate bondage. It was this conflict of interest that eventually brought the nation to a state of implosion. These two ships are a fitting metaphor for what many of your clients face as they pursue wealth and liberty while becoming entangled in the process.

Are your clients (or you for that matter) earning appropriate dividends of life satisfaction on the wealth they accumulate? Or have the mantras of Madison Avenue convinced them that they will never have enough to be truly happy, and that true wealth is always the next rung on the ladder? 

For the first time in its history, the Nobel Prize for economics was given to a psychologist, Richard Kahneman, whose work in Behavioral Finance uncovered the first of many layers of emotional and psychological conflict in our relationship with money. As a society, we continue to make the same monetary mistakes over and over and experience increased anxiety and dissatisfaction in return.

A recent study revealed that the more money Americans make, the less sleep they get.  This begs the question, “Is this because wealth and opportunity have placed their minds in a state of heightened alertness or because it has opened the floodgates of anxiety?” As financial advisors, many of you have observed that it is more of the latter. The great disconnect we have witnessed in our culture is between the pursuit of wealth and the satisfaction that wealth brings. In other words, as we are “getting” money, we are not necessarily getting our money’s worth.

•  A couple, already under considerable financial stress, goes out and doubles the size of their mortgage when he receives a pay raise. She works for a firm that has been hit hard by the economic downturn.

• A woman frets over her mortgage for years. Her accountant tells her she needs the mortgage for a tax deduction every time she brings up the topic. She follows his advice even though it leads to sleepless nights. She is 81 years old.

•  A man who is making great money and has a flourishing career can’t bring himself to enjoy any of his money because he’s controlled by a mortal fear of being poor.

•  A couple is working extremely long hours, and their relationship is strained because of it. Neither one is satisfied with the jobs that keep them apart.

•  A woman feels her skills and gifts are being wasted by not utilizing them in her career. She has so many bills, however, that she doesn’t feel she can afford to change career paths.

What’s the money for?

I believe that all of us could be reaping much greater dividends from our money than we are currently experiencing. By weighing the emotional consequences of financial decisions, we could all learn to take more prudent paths in how we earn, invest, and utilize our money. By weighting our financial decisions with emotional as well as material rationale, we increase the possibility of getting our money’s worth in terms of satisfaction, security, balance, and happiness––the four great intangible cornerstones of life. 

Consumers know, but do not always align themselves with the knowledge that their money should be used in a way that works toward––rather than against––satisfaction, security, balance, and happiness. Millions utilize their money in ways that lead to increased anxiety rather than peace of mind.

If we all took a closer look at the manner in which we appropriate the money we receive, we could find adjustments (some small, some significant) that would immediately produce a dividend of less anxiety, greater security, and increased satisfaction, resulting in a greater Return on Life (ROL). For this to happen, money must be placed in its proper context. 

Is money a means or an end for you?

If you ask people what they want from their money and their life, the answers you hear repeatedly are happiness, balance, security, and meaning. How well and how wisely your clients manage their money has an impact on all four of these cornerstones. In fact, by making poor financial decisions, it is quite easy to compromise happiness, security, balance in life, and even a sense of meaning if they become enslaved to money-producing activities that keep them from doing the things that provide a sense of purpose. 

Cornerstone 1: Happiness (wanting what you already have)

Advertisers are keenly interested in helping us develop our peripheral vision regarding the homes and possessions of our neighbors. Advertisers are interested in feeding discontentment. “Create a void and fill that void with a product” is how the thinking goes. “This will make you happy” is how the ad copy reads. 

But people eventually learn––or at least we hope they learn––that this brand of consumerism only increases their hunger and discontentment. Author and theologian G.K. Chesterton said that there are only two ways to get enough. One is to continually strive for more and more, and the other is to be content with less than you already have.

Cornerstone 2: Balance (walking the tight-rope between too much and not enough)

When we begin to balance work, family, leisure, and personal development, we truly start enjoying life. Balance in life is an investment issue; namely, how well we invest our time. Achieving balance is a perpetual balancing act, not a “one and done” decision.

Many of us feel we are investing far too much time in work and far too little in family, leisure, or personal development. Many times this imbalance occurs because of the way we have managed our resources––we are forced to work long hours and extra jobs to pay for “stuff.” Relationships suffer. Life satisfaction suffers. Destinies suffer. Our time schedules have become enslaved to our debt schedules.

Money can be utilized in a way that restores balance to lives. Those who have done so have learned to readjust and use their resources in such a way that it restores a sense of balance and personal fulfillment to their lives. Their life is no longer about making money. Their money is about making a life.

Cornerstone 3: Security (doing what you want with your tomorrow)

Security may be the greatest intangible benefit that properly managed money can deliver to our lives. If we do things right and invest the right amount of resources in both the present and future, we can go to sleep at night with the assurance that tomorrow belongs to us. Our time is ours to invest any way we choose.

Once we forfeit or lose that security, we begin to live with fear. Fear of losing our jobs. Fear of never being able to pursue our dreams. Fear of not having enough in our retirement years.

Financial and relational security concerns are also connected. According to an article entitled, “Valentine’s Day Flash from Economists: If You Want to Be Happy, Don’t Get Rich, Get Married,” David Blanchflower and Andrew Oswald, two University of Zurich economists, report that getting hitched provides “basic insurance against adverse life events and allows gains from economies of scale and specialization within the family.” They estimated that a happy marriage is worth $100,000 a year. 

It would seem that there is a much more integral relationship between our relationships and our money than we may have suspected after all.

Each time we make a financial decision we are adding to or subtracting from a sense of security. People are different in regards to how much they need and where they need to put those resources to feel secure. It is important to listen to these feelings when offering financial advice. From a client’s point of view, we need to ask ourselves “What is the point of following the advice of some professional if it causes you to not be able to sleep at night?”

Cornerstone 4: Significance (making the best possible use of our time, abilities and passions)

Victor Frankl, the famed psychiatrist/philosopher and author of Man’s Search for Meaning, stated that man’s primary motivation was the need to find significance and meaning in their lives. People are motivated by a need to make a difference somehow––to feel they are making a contribution that is significant.

Because of financial strain, many people have “unplugged” themselves from the activities and pursuits that fulfill this sense of purpose and significance. In quiet moments of desperation they ask themselves, “What is the meaning of all this?” Many are caught up in “activity traps” where there is much sound and fury but little emotional payoff.

By starting with the way they manage their finances, many people have been able to move their lives toward a place where their hands, head, and heart are working together in work and activities that fulfill this inescapable need for meaning and significance––and sometimes in a fashion that is unpredictable and unconventional.

After burning out after 20 years as a social worker and counselor, Hal became a financial advisor. Through his years of experience, he had noted that many people’s problems were rooted in and stemmed from money management issues: 

“It sounds strange to some, but I have a much greater feeling of meaning and significance in what I’m doing now, because I feel like if I can help people do the right things financially, I can help to save them much misery and add to their life satisfaction in immeasurable ways. It’s not that what I was doing before wasn’t significant, it is that what I’m doing now is more meaningful to me.”

It may be a career step, it may or it may not be a directional shift, but either way, financial implications are involved in the move that puts the “me” in meaning in life.   Next month, we’ll explore how to help your clients find the keys to a successful return on life.

Adapted from an article that appeared in March 2010 issue of “The Integrative Adviser”, published by The Association for Integrative Financial and Life Planning.   

Mitch Anthony is the founder and president of The Financial Life Planning Institute, the leading provider of financial life planning tools and programs. 

For more than a decade, Mitch and his team have provided training and development for both individual advisors and major organizations throughout the world. Mitch personally consults with many of the largest and most-recognizable names in the financial services industry on both financial life planning and relationship development.

Mitch has been named one of the financial service industry’s top “Movers & Shakers” for his pioneering work, and is interviewed by the media on a regular basis. The Institute is partnering with both Texas Tech University and the University of Georgia to develop financial life planning programs for their undergraduate programs. Mitch is a popular keynote speaker, columnist for Financial Advisor magazine, and host of the daily radio feature, The Daily Dose, heard on approximately 100 radio stations nationwide.

Mitch is also the author of many groundbreaking books for advisors and consumers, including From the Boiler Room to the Living Room, StorySelling for Financial Advisors, The New Retirementality, Your Clients for Life, and Your Client’s Story. For information on these books and more resources, click here.

Contact him at mitch@mitchanthony.com.

© 2008 Mitch Anthony