I cannot be trusted with chocolate chip cookies. For me, they are the ultimate diet buster. After years of thinking I could somehow learn to practice moderation, I’ve come to the conclusion that my only successful strategy is to keep them out of my house. Any cookie entering my domain has already sealed its fate. 

This habit of mine causes much distress for my two small children, as they also love a good chocolate chip cookie. Unfortunately, their dad happens to be a “cookie monster.” Their words, not mine. 

Just like I have a weakness (we’ll call it weakness instead of a lack of discipline) for chocolate chip cookies, investors can also be prone to weaknesses, biases, and money scripts that do not serve them. Whenever I have the chance to speak to groups of people about personal finance, I am frequently met with questions that refer to the tools and techniques of financial planning:

  • What’s the difference between a ROTH IRA and an IRA?
  • What does a financial advisor do?
  • Should I invest enough to get the match in my 401(k) retirement account?
  • What’s the difference between a mutual fund and an ETF?
  • What do you think about Bitcoin?

I welcome these questions because I know that everyone is on their own financial journey. However, I have recently started becoming more vocal about the human side of finance. You know– the secret part that we don’t talk about to anyone except our spouse (maybe).

We all have our hang-ups when it comes to finances. Even investment advisors and learned financial analysts can be a little weird when it comes to our own money. I believe this because in over a decade as a financial advisor, I’ve never met anyone that represents the perfect embodiment of homo economicus. That is, the perfectly rational being with money.

You might think that the abundance of financial information in today’s world would make us much more shrewd in our money decisions. I mean, wouldn’t more data make us better equipped to create better financial outcomes? In a world where we can easily access retirement calculators, track our spending, and evaluate stock market data; shouldn’t most people be crushing their financial goals? 

Sadly, this doesn’t seem to be the case. Instead, millions of Americans are struggling financially. How can one of the wealthiest nations in the history of the world be so bad with our money?

Investors: We Don’t Know Ourselves

Ask yourself this question: “How well do I know myself when it comes to money?”

You might think this sounds bizarre. Who knows you better than you? Your parents? Possibly your spouse?

The truth is that we may or may not know ourselves as well as we think. Sometimes, our thoughts and beliefs about money are buried deep within our subconscious. Throughout our lives, especially in our early years, we are constantly creating, shaping, and absorbing ideas about money. 

Where do these ideas come from?

In many cases, they come from our family and home environment. I know that I can still remember times when my parents would say things like “we can’t afford it” when having money discussions around us kids. Memories like that can stick with you and even impact your behaviors as an adult.

Put another way, if we consider money as its own language, our upbringing and education would likely shape our ability to speak and interpret it differently than other people. Even siblings that are raised in the same household can have different beliefs about money. People from different cultural or socioeconomic backgrounds would undoubtedly have different views about money.

This idea of uniqueness seems intuitive to most people who pause to consider it. However, economists, financial pundits, and academics still speak about money and financial topics as though human beings are automatons that will always think and act rationally with money. The opposite is true. 

Our own ideas and biases about money can become so deeply embedded that we begin to act or react without even realizing belief that’s driving our behavior. Some of these “money scripts” can have a positive impact on us…but what about those that result in negative behaviors? 

Just like my habit with chocolate chip cookies isn’t good for my waistline, some money habits aren’t good for our long-term financial health. This is why it’s important that we begin asking ourselves better questions when it comes to money–

  • What are my first memories when it comes to money?
  • What brings me joy?
  • What brings me more fulfillment–material things or experiences? How come?
  • How much is enough?
  • Am I managing my money in a way that’s improving my life?

These are questions that no investing calculator will be able to answer for you. This work is very personal and highly relevant to your financial story. In many cases, it can reveal ideas and beliefs you never realized you had. Sometimes, it gives you clarity about why you do the things you do with money. It may also allow you to see the true value in creating a financial plan. 

Nobody spends more time with you than you. Working with a good financial planner that understands the interior side of finance can be a tremendous asset on your financial journey. Afterall, there will always be a human side to the personal finance equation. Don’t overlook it.

Who Asked You to be the Expert?

I often find myself in conversations with people from all walks of life, and I enjoy learning about other professions. As a small business owner, it can be fun and enlightening to listen to other small business owners discuss their challenges, frustrations, and successes. One thing that has never happened—not once–is someone else expecting me to be a complete expert on their business. 

Electricians don’t expect me to be able to install wiring for my house. Yoga instructors don’t expect me to have the skills to hop in and teach their 1-hour Power Yoga class. So, why do so many people pressure themselves into being the self-contained CFO in their household? 

If my car breaks down, I will need a mechanic. If my kids get sick, we’re going to the pediatrician. Don’t get me wrong, I have some (very) basic skills as a handyman, and my caregiving ability as a dad is pretty solid. However, for anything important that is outside my circle of competence, I’m not going to stay up all night doing google searches to try and find solutions to implement myself. The stakes are too high.

One of the most common phrases I see in financial marketing to consumers is the idea of getting a “second opinion.” I would challenge the assumption that clients need a “second opinion.” I mean, if 2 opinions are good, why not 3? Why not 4? Where would it end?

Most of us don’t need more opinions. Instead, we need someone who is able to help us get really clear about our true opinion. Then, we need someone to help us build an actionable financial plan that reflects our values and priorities. No more conversations that are just veiled sales presentations. We need real, true financial advice.

At our firm, I meet with a large number of retiree and pre-retiree investors. Part of our retirement planning process is to discover what clients are actually retiring to—what will their retirement lifestyle really look like? What kind of retirement income will they need to support that kind of lifestyle? 

I’ve never had a retirement planning meeting where the client details their dream of becoming a full-time portfolio manager during their retirement years. Instead, most of the conversations are focused on a new chapter that includes traveling, hobbies, and grandchildren. When did society begin expecting people to retire from full-time employment and become skilled wealth managers? 

I’m not suggesting that one retire and no longer pay attention to their money. Not even close. I’m simply stating that I’m astonished at the number of investors who feel comfortable trusting their retirement income plan to Google or Youtube. 

In my core, I  believe part of this desire to be truly self-sufficient comes from the idea that the subject of money is still taboo. We can often feel judged or self-conscious when we don’t know something in the realm of personal finance. Our money scripts and beliefs may tell us to keep our guard up and be self-reliant because that’s what the “smart money” investors do. 

I believe that your financial future is too important to be left up to chance. Even the most successful business owners, professional athletes, and renowned investors know that they may have blind spots. In fact, it’s quite common to see the most successful people have trusted advisors and coaches to help them in different areas of their lives. 

Why should our finances be any different?  Let’s get started on building your financial plan.