OVERTURE: END YOUR WAR WITH MONEY
by Jaimie Blackman, President, BH Wealth Management
As an artist by nature, and now a financial advisor by profession, I had always wondered why the language of money was just so much jargon. I saw an opportunity to change that in 2000 when I entered the financial services profession as a senior manager at a regional brokerage firm. I was surrounded by four hundred stockbrokers who had the job of bringing stock ideas to clients and prospects, to make a sale. I learned that jargon and knew there had to be a better way.
These stockbrokers had technical knowledge and would rattle off a range of performance and research data. But I rarely heard conversations about the needs of the client, and how the investments would help them realize their long-term goals. I believe my background in music education, which required strong listening and caring skills, would benefit clients seeking financial advice. I obtained the necessary licenses to transition my profession and became a financial advisor. By 2002 I was recruited by one of the top three wealth management firms.
I learned early in my new profession that many people struggle to communicate their financial self. I saw that financial language creates dissonance, accompanied by a feeling of powerlessness, which often leads to financial paralysis. In other words, when someone is overwhelmed, either a poor decision is made, or the decision is simply delayed indefinitely. [Ask any estate planning attorney how often the process of estate planning, turns into perennial planning].
To stop their war with money, I help my clients in three ways:
- 1. Organize their financial resources and priorities.
- Understand the dissonance and harmony in their financial life.
- Decide by applying their personal values to sound financial practices.
I believe that being an effective financial advisor benefits my clients, their entire families, and society as a whole. With the peace of mind and guidance from a trusted financial professional decision partner, families reduce the risk of poor decisions, which might negatively impact generations to come.
Read End Your War With Money with self-compassion and honesty. I have learned what I wrote in the financial trenches. I’m grateful to my clients, to my colleagues, and to my family for being my best teachers. Since money touches every part of your life, when you know the purpose of your money, you’ll know the purpose of your life.
CHAPTER 1: AN ARTFUL WAY TO SPEAK THE LANGUAGE OF MONEY
When most people meet with a financial advisor, the conversation is typically centered on bank statements, asset allocation, risk, rate of return, insurance contracts, and still more financial terms. In other words, all the technical components and analytics which go into building a sound financial portfolio. But little or none of your needs.
The financial professional is usually in control of this conversation. He or she is laying out charts, facts, and figures (and using too much jargon); rushing to propose solutions (before even diagnosing your situation), and focusing the conversation on dollar values (instead of your values) – just because that’s what they’ve been trained to do.
While well intentioned, highly educated, and experienced, these advisors struggle to simply and successfully communicate with their clients. Why? I believe the problem is rooted in the language of money itself. In most cases, as the professional talks, the client smiles and politely nods his or her head, but internally the client can’t understand what the advisor is saying, doesn’t hear a connection to his or her life, and may be too embarrassed or intimidated to ask questions.
The language that permeates the financial world, we can call it financial-ese, is often unstructured, unorganized, and wrapped up in too much dense jargon and too many technical terms that work like a fortress to keep the layman out.
Want to feel like a financial virtuoso? Begin by asking better questions. I’ll show you how on page 5.
Whether you’re speaking with your professional decision partner (a financial advisor, accountant, or attorney) or your personal decision partner (spouse, family, or friend) communicating your financial self requires an agreement on financial terms. This agreement will lead to more constructive conversations on matters of money.
The quality of your relationship with money is dependent on the quality of your ability to think and talk about money, as you would about any important component of your life. What do I mean when I say, “your relationship with money?” I mean how you react to it both emotionally and intellectually when the money subject comes up. Do you find that you lose your temper easily when talking about money, or are you eager to engage in a conversation?
Money is the measurement we use to determine what things and people are worth to us. How much are you willing and able to pay for a new suit? How much would you tip the hardworking waitress who provided great service to your large table? How much are you willing to splurge on a shiny red sports car? And once you have a level of financial security, will you help others with charitable donations?
All these questions and many more are interwoven into your fabric of money.
We may make hundreds of financial decisions each day – some small, some large. It’s been said that the greatest distance is from the heart to the pocket. And questions about money are fundamental questions about survival. Will I run out of money? Will I have enough to pay for shelter or food? To understand our view on giving, receiving, and owning requires that we look at our life as a whole and all its meanings.
These are questions that have haunted us for a long time. Still, we must ask: What has been our training to interact with money? Too often the answers are, “I had no training in school,” or, “my children have had no training in school.” So now, what can you do to improve your relationship with money?
In 2002, Daniel Kahneman was awarded the Nobel Prize for his work on the psychology of judgment, decision-making, and behavioral economics. His empirical findings challenge the assumption of human rationality prevailing in modern economic theory.
Bearing that in mind, examine your own financial decisions. Are they based on emotion rather than intellect? This is also why we should never go to the supermarket when we’re hungry. Our emotions take over as we meander down the snack aisle.
The risk there is you’ll add a few extra calories. But what about big financial decisions?
Wouldn’t you rather have the ability to translate emotional financial needs into sound financial strategies?
Money can ignite the full range of human emotions from fear to greed, to everything in between. Many of our negative thoughts are money related — such as worrying about the future — “will I run out of money?” or about past financial decisions you’ve made. Healthy communication about money — an internal dialogue with ourselves, our loved ones, or with financial professionals — requires an understanding of the language of money. The purpose of this eBook is to give you a methodology using music metaphors to help you communicate more effectively with your family, friends, and the financial professionals you rely on for money help.
While most of you have not studied the language of money in school, many have learned the language of music. You may remember from school or the movie The Sound of Music, the music scale Do-Re-Mi-Fa-So-La-Ti-Do. By knowing these words and re-organizing them you can play or sing an infinite variety of melodies. Wouldn’t it be valuable to learn a set of simple words that correspond to the “Sound of Money?”
Improving our relationship with money is an art form, that’s why looking at money through the lens of music, can act like a spoon full of sugar to make the medicine go down. Ultimately your relationship with money directly influences your ability to make sound financial decisions.
Music happens when you organize and understand sound. Sound financial decisions happen when you organize and understand your financial life.