Why Do You Make The Decisions You Do?

Monday 2/23/2004


On of the things I love about life is it is a journey of discovery – or it can be.  I learn so much from the people I counsel and I draw on my own past experience to help them.  I learn a lot from the people I connect with in volunteering – being on a board of directors with an Executive Director who recommends excellent books and provides leadership training,  My current and past connections in business put me in learning situations with people from all over – most recently a study group of 7 women from PA, OK, Hawaii, Houston, Denver and Minnesota.  I learn a lot because of e-mail.   About once a month e-mail will lead me to a site that helps me find some kind of incredibly useful information – a book or a site with free information about business or personal discovery. 

One of the places we can learn a lot is from our past - especially from our childhood. Maybe that’s why counseling is so popular today.  How did we develop the attitudes and habits that help us or hold us back - attitudes about finances, relationships, spirituality, health, risk – even how we budget our time.

I’m not sure where we’re going with this, this week.  I do have a couple of stories to tell you, including some personal discoveries.  I have some questions I’d like you to ponder about yourself and how you got to be where you are.  My personal conviction is where we are isn’t so important as where we are going – or that we are going somewhere.  Status quo is deadly, also no fun.

It takes a lot of drive and energy to function.  One thing that can make us work hard at business, relationship, finances, health or other important life areas is the emotional lessons we learned as a child.  These lessons can also cut us off at the pass. 

You know you can read or download this information at the end of the week at planningsense.com.  If you’d like to know about the book that started this process in my own discovery – email me from the website.

Tuesday 2/24/2004

What did you learn as a child that is holding you back or pushing you forward?


Let me tell you a story.

There was a 35 year old – we’ll call him Norm – who had a great job, a wonderful wife and a young family.  He was highly successful in his field.  He decided to buy and renovate a wonderful big old house.  Shortly after the renovations began he decided to make a career change and left his employer to go it alone.  The renovations on the house were supposed to cost $60,000.  By the time they were done it was three times that amount.  He was struggling to get his business going and was feeling financially stressed – in fact he was on the brink of financial ruin due to these two decisions he had made – the house and the job change.

He was in his living room one day when his 5 year old son came in and wanted to play.  Norm was in the middle of a panic attack and the child could sense it.  Norm could see the fear on his son’s face and it took him back to his own childhood and brought him face to face with the monsters he was battling, the negative financial life he was creating.  At age 6 he found his grandfather in a similar situation to the one his son found him in.  Some economic hard times and some bad financial decisions caused his happy and affluent grandfather – his best friend – to go bankrupt and leave the country to become a laborer for the rest of his life, his spirit broken. 

Norm realized, when he looked at the house he spent so much to create, that he had re-created his grandfather’s house – in the feel, the light, the size.  He was recapturing a wonderful time in his childhood and trying to get back to a place of security and fun.  Now the house was about to drag him down.

Why am I talking about this guy?  Because, every day I hear about people making decisions to live beyond their means, or who give up on themselves because of poor attitude and not wanting to make that Herculean effort to keep going.  We don’t have to make the same mistakes our parents made.

There’s more to this story - tomorrow



Wednesday 2/25/2004

Norm was 6 years old when his grandfather, his best friend, plummeted from success to failure.


Norm, now in his 30’s was drowning in the financial stress of his life and his 5 year old son, standing there watching him, was afraid.  This snapped him out of it and made him begin to think.  Why was he making these decisions that kept him over-extended?

When he was a young teen his dad, who was not financially successful, taught him conflicting lessons about success.  On one hand he encouraged him to succeed and on the other he said that people who were successful often died young due to the stress of all that money and they were awful people – kind of like the Enron executives of our day, making decisions to line their pockets and putting thousands of people out of work and families into turmoil.

As Norm examined what went on in his childhood he realized he had adopted attitudes that helped him succeed – and others, which were sabotaging his success, making him afraid of what he would become if he continued to be successful.

By taking reckless risks – getting way over his head in debt and then changing careers – he was following old tapes playing in his head.  When he thought about it, he knew he did not have to suffer the fate of his grandfather or be the stressed out evil business owner his father described. 

Here are a couple of questions you can ask yourself as you think about what the messages were – spoken and unspoken – when you were a child.

Do you know what you want – what is in line with your values and desires?
Are you acting in a way that is consistent with your desire for success?
Are you doing anything that undermines your effort to achieve your goals?





Thursday 2/26/2004

While I’m problem solving a case, I often get insights into my own behavior. 


That’s because financial advising – at least our version of it  - is holistic.  I could do great numbers and tell someone how to get what they say they want – for example a safe and secure retirement – but if they don’t implement the plan to get there the planning had no value. 

Why don’t people do what is good for them?  Ah ha!  That’s the question we’ve been addressing all week. 

I sometimes feel very disorganized.  I know I can be very organized – after all, I got through law school in four years and passed the bar exam while working full time.  I know what I had to do to get that done and my commitment level was high.  So lately I’ve been examining my business life and my finances. 

I learned long ago that I had to put my finances on automatic pilot to get where I need to go.  I have two pension plans and a big investment type life insurance policy that are paid into automatically and money is deposited into three checking accounts automatically.  Recently, I set up a credit union account – by payroll deduction – for a big chunk each month.  Why do I do this all automatically?  Because if it actually got into my hands I’d find some way to spend it - on a new computer or staff or something else that seems really important – but isn’t.  

I’ve bought some really stupid things over the years: a set of encyclopedias when the kids were younger – now really, with the Internet, was that necessary?  No, I did it because my parent did and it was a big help to me when I was finishing high school work late at night.  I bought a set of cookware for $2000.  It is fantastic cookware – but did I need that?  I really only use about 5 pots from the set.  The rest I gave away.  Cooking dinner with my Dad and for the family at a young age (11) was important to my self esteem in my growing up years.  Was that why I bought those pots?  And then there was the house.  As a single mom – a $300,000 house, putting in a pool, getting the dogs – all versions of what I thought family life should be – perhaps because my house as a child was like that for awhile – until the company that paid Dad such a huge income folded and he became a worker bee.  That house kept me poor for 11 years until I finally came to my senses and sold it.  I will never again be held hostage by a house.


Friday 2/27/2004

Are your financial attitudes holding you hostage?


I counseled a young woman who had gotten herself into major debt – and it was continuing to pile up.  She lives a life of stress and is trying to get things in order – trying to get another degree and change fields – but the studying isn’t going well and the grades, which have to be Bs for her program – are just below that level.

She needs a financial budget and a time budget.  But will she follow them?  I’m going to have to dig a little deeper to see why she has this self-defeating attitude about herself.  It carries over into her personal life – divorce, a user boyfriend.  Any of this sound familiar?

Something or someone planted the idea in this young woman’s head that she was doomed to failure. If she can’t figure that out, she is doomed to continue making the same poor choices that got her to where she is today.

Here is another attitude that can kill your finances - too safe is no smarter than too risky.  I’m seeing people who are pushing more and more of their money into fixed accounts, bonds, and annuities.  These are young retirees who probably have 30 years of retirement ahead of them and will suffer greatly from the ravages of inflation as time moves along – and their assets dwindle.   Maybe you think you have too much to ever be in this place?  I recently counseled a couple with three million in assets.  Based on their spending level and the rate of return on their investments, they would run out of money before age 98.  Does that sound like it’s not a problem?  A couple of bad years in the market and they could be financially devastated at a much younger age.  The choice to keep most of their assets in fixed accounts keeps them from investment risk – but it puts them squarely in the path of an even more devastating risk – inflation risk.  Do you remember the 80’s when inflation was double digits?  In spite of the current low rates – when the government decides to print more money t dilute the national debt – we could be on that upswing again.  If you are locked into bonds paying 5% when the inflation rate goes to 14% - what do you think will happen?



Monday 06/28/2004 Property Exchanges

Monday 06/21/2004 Selling Your Business

Monday 06/14/2004 Investment Thoughts From A Nobel Prize Winner

Monday 06/07/2004 Money Can’t Buy Me Love

Monday 05/31/2004 IRA – Your Biggest Asset - Or Your Biggest Tax Bill?

Monday 05/24/2004 Retirement Blueprints – What’s Your Game Plan?

Monday 05/17/2004 Planning for Death

Monday 05/10/2004 The New Retirement Challenge – Healthcare

Monday 05/03/2004 Taking on The Risk of Loss

Monday 04/26/2004 Is a House a Good Investment?

Monday 04/19/2004 Attorney Selection, Personal Education and Divorce Agreements

Monday 04/12/2004 Estate Planning Curve Balls

Monday 04/05/2004 Can Reading Be Dangerous To Your Future?

Monday 03/29/2004 Mistakes that Cost Us Money

Monday 03/22/2004 Financial Truths

Monday 03/15/2004 The Worst Mistake a Young Couple Can Make

Monday 03/08/2004 More on Money Attitudes

Monday 03/01/2004 Statistics

Monday 02/23/2004 Why Do You Make The Decisions You Do?

Monday 02/16/2004 Empowering Caregivers – What You Need to Know

Monday 02/09/2004 Pay Now or Pay Later: Rules for IRAs and Other Retirement Plans

Monday 02/02/2004 Maybe We Should Call Them Million Dollar Clubs

Monday 01/26/2004 Women on Their Own Face Financial Challenges

Monday 01/19/2004 What Will Happen When You Get There?

Monday 01/12/2004 They’re Closing the Loopholes for Retirees

Monday 01/05/2004 A Fresh Start