Have you ever experienced a smart-foolish event with your money? Suppose pre-Covid-19, you decided to have a garage sale also called by other names like yard sale, and tag sale. It’s a great way to get rid of some of the clutter in the house and raise some money to pay off a bill or two.
You work for two weeks preparing for the sale. It’s a bright day and many people show up and buy most of the stuff. You are surprised when you count up the proceeds that you made $250. But, no bills were paid. Instead you called a few friends and you wined and dined them at a near-by restaurant.
Why did the smart plan turn foolish? One guess is that you didn’t make the decision. The kid did.
What kid? The “YOU”, who as a child heard people talk about money, maybe even fight about it. What did you hear people say? Money doesn’t grow on trees. Easy come easy go. Money is evil.
What did people do with money? Did they spend it as fast as it came in? Were they strict about saving and cutting out “extras”? Was there some category that was always okay to spend money on? Was it healthy food, liquor, books for school, fancy clothes, or something else?
As a kid, who did you think was smart about money? Who did you think was rich? What made you think they were smart or rich? As you look back at those same people, is your assessment different now than it was then? Why?
Of the people who were influential in your growing years, who handled money the same way you handle money now?
What was the first thing you bought with money you earned? What did that represent to you? Who else in the family would have done that? Were you praised, criticized, chided about how you spent your money? How did that affect your next transaction?
As my friend Charlotte says, most of us are “uneven.” We do smart things and foolish things with money, time, emotions, and words. The trick is to catch ourselves when we swing from smart to foolish and ask why is the kid messing with us.
The questions posed above are worth taking the time to explore because they are as much our genealogy as the tracing of family trees. Genealogy has become the second largest hobby in our country, perhaps because we want to feel centered and part of a community. Those are worthy goals. Understanding what drives our money attitudes and decisions is valuable. Examining what shaped us and drives us can help us make more smart decisions that don’t turn foolish. Have a talk with the kid, so the kid can grow up and do better.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.
Penelope S. Tzougros, PhD, ChFC, CLU. Financial Planner, Author, National Speaker. Wealthy Choices.com. 51 Sawyer Road, Suite 340, Waltham, MA 02453. Direct to Penelope 781 577 2311.
Penelope@wealthychoices.com. Fax 781 893 3565. In all 50 states, Penelope S. Tzougros is registered with, and securities and advisory services are offered through, LPL Financial, Member FINRA/SIPC. She is affiliated with Bay Financial Associates, LLC. Financial Planning is offered through Wealthy Choices® and Bay Financial Advisors, Inc. Both are registered investment advisors. Neither is a broker-dealer nor affiliated with LPL Financial.