Financial Literacy is not taught to the public but is a critical component of living in the modern world. Taken for granted, Financial Literacy dictates how your living experience will unfold. The ownership is to the individual, like the law. Financial ignorance is no excuse.
I want to help people create the fulfilling, meaningful lives they have dreamed about. I want to help them walk the long journey of shaping themselves into the people they want to be. Rocky Lalvani on the Billionaire Lifestyle Podcast
The first word that stuck me hard when speaking with National Speaker association member and financial adviser Martin Hurlburt was:
“Emmitt, Emotions Are Hazardous To Your Wealth!
The very statement was the one thing that drew me directly to Mr. Martin Hurlburt’s message. Listening to his lecture was an affirmation we all know in the back of our minds but tend not to adopt. It’s understood, many of us ignore the fact we spend our money to make us feel better, and there are a host of other emotional reasons money leaves our pockets. There is an addiction much of our society tends to sweep under the rug or just blindly look the other way and never address as a personal issue. That addiction is emotional spending be it large or small. There is a common bond each of us has in the fact we use money spending as a cure for so many things, in order to feel temporarily better.
Martin Hurlburt has identified key motivators when helping clients to with them on their financial journey. Before being able to formulate a financial road map there must be an understanding of the mindset of clients. Martin has identified key factors our population may be harboring preventing the arrival at financial freedom or security.
In his new talk: Financial Misbehavior: Why Smart People Do Dumb Things With Their Money. Martin spells out key points to help you navigate the journey.
A few of the key points:
Why emotions can be hazardous to our wealth!
Why money does not solve financial problems.
How our brains are wired against us making good choices with our money.
3 simple things anyone can do to make better financial choices.
How emotions impact our investment returns.
A few (7) Reasons why we buy to satisfy emotions.
Protecting our image.
Many times we spend money to protect the perceptions concerning how and what our family friends and everyone have concerning our persons. There is a stigma in much of the world of being poor, lower class or without means. The perception of financial insecurity by people outside of yourself is as old as the hills, but has little merit to a person who understands financial literacy and long-term planning. With a financial pan, and following a financial map will remove those temptations.
Spending Up To Our Income Level.
Many of us obtain raises throughout our working career’s. The majority increase our level of spending to match whatever upgrade to our check stubs gain periodically. Up spending is the norm versus the exception. The best practice is always to live below your income level and use compound interest with any new revenue we find in our lives. The American standard particularly before 2008 was to spend more money than we made in the form of credit cards. So spending your raise is not a good idea.
The Need To Feel Powerful.
Sometimes spending money make you feel like a Greek deity. It’s a fact when you have some cash or a new credit card, a certain perception of power come comes along. Spending money can make you feel like those people in the NBA player who just scored the winning three pointer as the clock hits zero to win the game. There is the other side of power spending its being broke. Being broke is not a power feeling.
The Need For Immediate Gratification/Boredom.
Sometime we just need to get our of a rut and spending money will fill that empty whole, briefly. We have all had those moments where it seems, there is something missing and an urge needs to be satisfied. A new TV, that new iPhone 50 just came out and you must have it. After time has passed we recognize the purchase was totally unnecessary and there could have been a better use for the dollars and time spent.
The desire to protect our standard of living.
I have made purchases in the past just because I had the old model of something, and that was just not right. Cars were the most notorious. Sometimes we make purchase “Just Because”, it’s what we do.
The Need To Overcome Past Problem.
People who come from meager situations and who have not gained a certain level of financial literacy. These individuals may have a tendency to spend money far less responsibly than other who were more stable earlier in life. Think about all the Football players, boxers who make huge sums of money only to end up broke. Often in this category one can hit several items in this list because of the lack of exposure to finances.
Convince oneself of worth.
Some people emotional spend money because they attribute their value is dependent of how much money they can spend.