Emotions and Our Money
The people who have money problems are captives of self-delusion. Let’s face it, many people have money problems, and not simply by failing to have enough greenbacks in the bank. Some are misers, some are tightwads, Some are willfully naive.
Thus comes the rise of a new type of adviser, the financial therapist — a specialist who treats emotion-driven misconceptions. New York Times columnist Paul Sullivan writes about this small, yet intrepid, cadre in his new book, The Thin Green Line: The Money Secrets of the Super Wealthy.
He draws a distinction between being “rich” — those with a large number on a financial statement — and “wealthy,” those who know they have enough for wants and needs. Many of the rich are riddled with anxiety they will go bust. The wealthy, in Sullivan’s parlance, may have nowhere near the assets of the rich, but harbor the lighthearted self-assurance they will be fine.
Financial therapists see their mission as tutoring folks on how to arrive at this blessed state.
Sullivan cites examples of what happens to three families about to lose their houses, due to bad decisions. In one, relatives ride in and save the homeowners. In a second, the homeowners figure out how to fix the problem. In a third, they lose the place to lenders.
I imagine the three sets of owners’ approach to finances in the future will be, in order: 1) blithe disregard because something always will turn up, 2) caution regarding future asset purchases and 3) despair about ever getting ahead.
Sullivan visited the Financial Therapy Clinic in Manhattan, Kan., where he was hooked up to a bunch of sensors and asked a series of pointed questions about his personal debt level. Although Sullivan has sturdy personal finances, the monitors showed he was feeling stressed during the interview.
Maybe if you hooked up Warren Buffett to that machine, his readings would show Zen-like calm. Or not. But knowing yourself and how you regard money is vital to your material and psychological well-being.