Editor’s Note: This is Part 1 of two parts, Part 1 comprising Lessons 1-2. The second part, with lessons 3 to 5, is More Money Lessons I Learned at 40.
As a financial planner, I think about money more than most people. I think about my personal life, the financial decisions I make every day, the lives of the clients I have mentored over the past 20 years and those I continue to mentor to this day. At 40, I learned a lot about money and a little about life.
In case the title doesn’t say so, I turned 40 a few weeks ago. Forty is one of those fun ages that makes you pause for a moment to think about where you’ve been and where you want to go. In my career as a CFP® Professional, I am an educator, coach and guide for my clients, so I naturally think about lessons to share with those around me in the hope that they can learn (at least) one thing that will help them improve the quality of their life.
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Lesson #1 – It all starts with your mindset
“Whether you think you can or not, you’re right.”
Henry Ford
Our money is not the problem; it is our state of mind. When we make a decision, we think – with an emphasis on think – that we are logical and rational. But it’s often our subconscious mind that’s in charge. We are shaped by our attitudes, beliefs, values and experiences that have accumulated throughout our lives. This subconscious programming is what drives our emotions and is responsible for 90% or more of the decisions we make every day. (opens in a new tab)
Money is often an incredibly emotional topic. When we dive deeper, we find that our subconscious mind has probably coded some unhealthy thoughts into the way we think about things, with money often at the top of the list. For this reason, even the mere thought of money can trigger an emotional reaction in most people. Therefore, it’s no surprise that it’s the number one cause of stress and anxiety in America.
Most of what drives our financial decisions is established in our subconscious by age 7. (opens in a new tab). It’s no wonder, then, that we experience feelings of shame, guilt, disappointment, embarrassment, and resentment (the list goes on). The psychology of money (opens in a new tab), the study of how we think and feel and how they drive our actions and behaviors, has grown rapidly in recent years. For me, it’s the missing link between the decisions we want to make with money and the actions we actually take.
The good news is that if we are open to exploring our financial mindset, we can shift this subconscious programming and take proactive steps to develop healthier financial beliefs, behaviors, and patterns.
If you want to master the role money plays in your life, start by mastering your mindset.
Lesson 2 – Define the game you want to play
“If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you’re the patsy.”
warren buffet
What do I mean by play? Simply put, your game is the life you want to live, both personally and professionally. It’s who you want to become, what you want to accomplish, what you want to contribute, and what you want to experience. Your game is different from mine, as it should be. A lot of people never define their game, and as a result, they end up playing someone else’s game, and they never seem to understand why they can’t move on. If you play someone else’s game, you rarely, if ever, win. Why? Because you are the pigeon.
Define the game you want to play, then get to work building your edge.
For me, I decided that my professional edge was going to be in financial planning. I dedicated the first 10 years of my career to being world class in my craft. After 10 years, I had an advantage, and this advantage allowed me to join a small team that founded Facet (opens in a new tab) in 2016 (which was just ranked #46 on the Inc. 5000 Fastest-Growing Companies in America list (opens in a new tab)). This may one day help me create the kind of wealth that can create financial freedom for my family. My game is financial planning. My advantage is my education, experience and expertise, which cannot be matched.
As a financial advisor, I talk to a lot of people about their money. The most successful people I know are not crypto millionaires. They weren’t following Reddit and messing around with GameStop or AMC stocks; they are not day traders or “experts” in options or currency trading because they took a two-hour course online. They are masters of their game and their art. They have an edge that they’ve built up over the years (not days as social media platforms seem to suggest). Building up your edge is a lot like compound interest. The return seems small at first, but with consistency and focus, your personal growth begins to soar in the years to come.
Stop playing someone else’s game. Instead, define the game you want to play (the life you want, the values that will guide your decisions, what brings you true joy) and find your edge to make it possible. If you don’t, you’ll be playing someone else’s game and by someone else’s rules.
Stay tuned for Part 2, including Lessons 3-5, next month.
– Brent Weiss, CFP, CHFC (opens in a new tab)Co-Founder, Facet Wealth (opens in a new tab)
Facet Wealth, Inc. is an SEC-registered investment adviser headquartered in Baltimore, Maryland. This is not an offer to sell securities or a solicitation of an offer to buy securities. It is not investment, financial, legal or tax advice. Past performance is no guarantee of future performance.
This article was written by and presents the views of our contributing advisor, not Kiplinger’s editorial staff. You can check advisor records with the SEC (opens in a new tab) or with FINRA (opens in a new tab).
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