Can you recall a time when you purchased something you didn't need?It probably happened yesterday. It's ok. You can be honest and know you're not alone. It's safe to say that most Americans enjoy a comparatively high standard of living.
Many people have the luxury of discretionary spending. And those that don't do it anyway. Anyone that has ever taken Marketing 101 knows that people make buying decisions with emotion. Those of us in the Financial Services industry also know that people commonly make (bad) investment decisions with emotion, especially in today's market.
It's called an "investor's bad behavior." Yet the presence of emotion in the financial decision-making process doesn't make anyone a flawed individual. It is in our DNA, part of the human condition. When emotion is a driving force behind habitual bad decision-making, a more significant problem will probably be discovered. We'll save the science for another time.
Having sat through hundreds of financial planning meetings, my initial monologue before making recommendations goes something like this, "there are two core aspects of your decision-making process. The numbers, which I will show you, and how you feel about those numbers."
I have learned that my responsibility to the client is education and disclosure. Illustrate what is both possible and probable. Identify challenges and opportunities and then provide guidance. It's the client's responsibility to make the decision. Of course, I want all my clients to do well and thrive financially. But I'm not the "keeper" of their money. Only a temporary guardian of sorts until they find its underlying utility. Having the perspective that money is just ONE of the tools we have at our disposal to build the life we wish to lead, I have often found myself encouraging clients to spend their hard-earned dollars.
Emotional decision-making without basis can be foolish. If habitual, it can be damaging. However, if you are willing to discover the facts and consider the implications sincerely you should move forward with confidence. How you feel about the decision is your final step. Build your Vision, and make your decision. BPG Planning can help you create a financial plan for your future!
Sincerely,
Brian Pitell
BPG Planning