Blame it on Your Limbic System

Blame it on Your Limbic System

On August 27, 2010, the Dow Jones Industrial Average closed at 10,150.65. Earlier this Spring, it closed as high as 18,154.14. On August 28, 2015, it closed at 16,643 – after experiencing a tumultuous week overall including a 1,000 point drop in a single day. In context, it’s easy to put the natural ups and downs of the market in perspective. It’s easy to look at a 1,000 point drop as simply a blip in the road. But that isn’t what happened last week. Most media outlets freaked out. What happened in a day overshadowed what happened over the period of five years. And let’s not even talk about this fact: The Dow Jones Industrial Average isn’t “the market;” nor is it a broad indicator of the economy. Perhaps last week’s decline spooked you, too. So, instead of viewing the market’s dip as an opportunity to add to your portfolio (or simply do nothing), you panicked. Guess what? You can blame it on your brain! Just as the stock market craves certainty, so does your brain. And as soon as it senses any degree of uncertainty, your limbic system goes into “flight or fright” mode. “Because everything we do in life is based on our brain’s drive to minimize danger and maximize reward.” The future is always unknown, and you can rarely predict what’s going to happen next. When it comes to my business, there are times when I sure wish this truth weren’t the case. And I know my clients wish the same when it comes to their money. There is a biological reason why you react to...
Smart Money Moves Aren’t Really Complicated

Smart Money Moves Aren’t Really Complicated

I have Google Alerts on almost every aspect of personal finance (PF). So on a weekly basis a lot of PF articles and blogs posts come across my screen. Some are written by experts sharing their money management perspective and tips; others, by non-experts sharing the lessons learned from their personal financial journey. As I read a blog post this afternoon, my response was, “Ugh, this is so obvious!” After rolling my eyes, I refocused on the page and scanned the piece hoping the writer would tell me something I didn’t know or provide me with a new way of looking at what I already believe I know. No. Such. Luck. This is not a tirade against the author. In fact, her tips were excellent and someone will read her piece and get immense value from the advice she shared. My sentiment is more a reflection on the industry. It is one that I know can you help you achieve your life and financial goals and dreams and solve some of your problems; one that I love; and one whose good intentions get overshadowed by inundating you with personal finance information that is as dry as hell! Because it’s easier. It’s far easier to tell you, “save more, invest better, spend less, earn more,” in a hundred different ways than it is to challenge you to go deep and tap into the “why” behind the financial choices you make and actions you take. It’s far easier to get you to pay attention to the part of the equation that contributes the least to your financial success. Despite¬†research that proves...
Get Unstuck: Have a Close Encounter with Your Money Baggage

Get Unstuck: Have a Close Encounter with Your Money Baggage

Everyone has money baggage in some way, shape or form. And, the influences are many – family, friends, colleagues, society at large, consequences of past choices, etc. Typically, your awareness of your money baggage largely lies dormant until something happens. Usually something big. Like a marriage. Or, a divorce. Or, a lay off. Or, buying a home. Or, the birth of a child. Or, starting a business. Or, trying to figure out why you don’t feel comfortable raising your prices. Examples are aplenty. But one of the things these events all have in common is that you are often thrust into a situation that simultaneously triggers a financial fear that directly challenges a financial aspiration. Now, the cat’s – aka your money baggage – is outta the bag. Your money “stuff” has been brought to the surface. And you realize it’s keeping you from moving forward with financial goals more clear, confident and in control. So, you take action. Yet, something is not working. Probably because you’re making a common mistake: Most people focus on the transactional side of money – what they do with it – when they’ve decided it’s time to do something about their baggage. If that’s you, STOP! Money baggage is just as much about what you do with money as who you are with money. For greater financial success and more sustainable results, it is beneficial to also invest the time to explore who you are with money. It’s not woo-woo…it’s smart and strategic. It’s how you turn worry into action. It’s how you turn preparedness into sustainable results. It’s how you answer the...

One Step Forward, Two Steps Back & Why Mindset Matters

“Are you working toward business owner goals with a self-employment mindset.” Tara Gentile I’ve talked about the importance of and the role of mindset when it comes to reaching your goals here. So, I understand quite well that there exists a powerful connection between one’s mindset and the successful achievement of your goals. But last week, Tara Gentile, my business strategist and the creator of the Quiet Power Strategy, took this connection to a whole new level for me and wrote a piece that just rocked my world. In it, she raises the above question and I haven’t been able to stop mulling over it ever since. On so many levels, it is such a powerful question. Sterling is an S-corp; so, based on my tax status, I own a business. But if you pulled back the curtain and unpacked how I have made some business decisions, those would clearly fall in the self-employment mode. Neither her post nor the epiphany it held for me is about whether owning a business is better than being self-employed. That’s a personal and strategic business choice. However, it is about this: That moment when you realize you think you’re behaving one way when in fact you aren’t! Perhaps this disconnect is behind why some of the moments I declared were my tipping points, didn’t actually tip my business forward to the next level like I wanted! Can you relate? After all, you don’t need to have a business to benefit from exploring whether there is a mismatch between your goals and the mindset you’re relying on to achieve them. If you have...

A Layoff Can Help You Create a Fool-Proof Financial Plan – Really

If you’ve recently been laid off, as someone shared in response to last week’s post, and your emotions are still raw, you may want to read this later. It may be hard to imagine, but in some cases a layoff can actually be a good thing for your personal finances. This is not as heretic as it may sound. The employment landscape has changed significantly in the last 40 years. Yet, our collective expectations around how we work in terms of the employer/employee relationship hasn’t really evolved to match today’s reality – on both sides of the equation. If it did, all employees would be emotionally and financially prepared for the possibility of a layoff. They’d have multiple streams of income. Or, at least have a “just-in-case” financial plan if conflicts of interest prevent you from having a side-hustle. Do you? If it did, all employers would realize you can only cost-cut your way to growth but so much. At some point, innovation is needed. Do you work at a company where ideas are embraced from all levels of the company; where failure is not avoided; where “innovation” isn’t a buzz word but rather it is seen as tool for broader, strategic goals? The unlikely reason a layoff can inspire a fool-proof financial plan is this: it can foster a fresh start and better way to manage your money. In three specific ways: Review the last twelve months of your banking and credit card statements. Not to beat yourself up about what you did or didn’t do prior to your layoff, but to isolate patterns of financial behavior and...

The Financial Choice That’s Most Important When You’ve Been Laid Off

Yesterday, a friend shared that she was laid off this week. Three weeks ago, the Wall Street Journal laid off approximately 100 staff – many of whom were personal finance journalists. Hmm… Recently, Microsoft announced it was laying off 7,800 additional (!) jobs. Layoffs are typically associated with tough economic times. But, our economy is steady! Even with this week’s weird concatenation of events (Greece’s debt crisis, China’s market meldown, and the NYSE’s three hour tech-outage), the U.S economy continues to grow – albeit slowly. And the “market” as measured by these key indices – Dow Jones Industrial Average; S&P 500; and Nasdaq – rallied to end the week in positive territory and not too far from their 52-week high. The reasons for the layoffs are as varied as the firms conducting them. For some, it is purely expense containment and reduction; for others, it is triggered by a needed shift in the company’s business and business model. Regardless of the reason, there is a person and family emotionally and financially affected by this decision to reduce staff. There is a person who now needs to work on plan B for their career and mostly likely their personal finances, too. Is this you? Have you recently been laid off? If so, you may feel tentative, anxious, short on confidence and may be even a little guilty. If this is a repeat layoff, the emotional scar of multiple layoffs may run deep. And you might be freaking out, mad that you have to start over (again) and wondering, “How am I going to bounce-back this time?” or “When will I...