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Is Your Subconscious a Bad Financial Advisor?

Fear, shame or parsimony could be sabotaging your financial security and happiness, without you realizing it

(page 2 of 4)

When it comes to money, investing, accumulating wealth and planning for a secure financial future, people often sabotage themselves without knowing why, Kayfetz says.

“I hired him to give a series of talks to my clients and their friends and associates about money scripts and money psychology … so people can get in touch with their decision-making. It’s getting more and more difficult to differentiate between how we feel and what we know.”

MONEY WORSHIP: People in this category believe more money will make things better and that a windfall or increase in income alone will solve their problems. Illustrations by Andrew J. Catanzariti

Klontz has been happy to help advisers unravel such problems.

“One of my most common calls is about a retirement-age couple financially enabling an adult child, maybe in his 30s or 40s, while the parents are self-destructing. The parents are giving money to the child and depleting their retirement fund.”

Another common scenario is based on fear of spending. “A lot of problems with spending are related to early emotional experiences,” he says. “For instance, the Great Depression – my grandparents’ generation – created a whole generation of hoarders. They were deathly afraid of losing money and that’s when you get under-spenders – people who have saved millions and are eating gruel. ... Alternatively, if you believe that rich people are greedy, I can almost guarantee you’re going to sabotage yourself around the accumulation of money.”

Kayfetz says Klontz has been especially helpful with clients who have had a big windfall or suddenly inherited wealth,helping them understand “how to approach money and not be a money avoider, as so many of us are,” Kayfetz says.

Roberta Lee Driscoll, a Certified Financial Planner on Oahu, has also found Klontz’ scripts to be valuable tools when working with clients. “The majority of us are hard-wired one way or another, and some are hard-wired in regard to money so that they’re not good managers of their own money,” says Driscoll.

“As a financial planner, I can beat my head against the wall and say budget, budget, budget and set goals, set goals, set goals, but if they have issues from their childhood or the past, it doesn’t matter how much I tell them to budget. … I send them to Brad and he works with them, coaches them.

“There are a whole bunch of psychologists or coaches, but they’re not all good with money. He’s a specialist in money behaviors. That’s very unique.”

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Hawaii Business,February