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BehaviorGap: Internal Conversations to take care of ourselves.

Have you ever wondered how psychologists, and coaches keep themselves stable? They have stress like everyone else, they recognize their feelings, They take care of themselves like they take care of their clients, They don’t skip the boring daily steps, and they learn how to talk to themselves inside.

The principles in this video lecture series apply to everyone, but are specifically tailored to The Financial Planners of the world.

Carl’s ability to explain how Real Financial Planners are idea partners- individuals who help you create realistic expectations and act as a valve to release worry and calm fears- is a unique skill. In Carl’s four-part training on the internal dialogues Real Financial Planners need to have with themselves, you will learn ways to explain to yourself internally about the value of the service you provide. He demonstrates proper and powerful trust building with individuals in how to not be a defensive advocate of a plan you built, but rather to become a guide in a changing landscape of life.

Uncertainty Equals Reality
Don’t be a defensive Advocate of your plan. Be a Guide in a changing landscape.

What about the things advisers are never allowed to talk about? Carl, as vice president of unspeakable things, gives some powerful tools to planners to keep themselves mentally healthy, while constantly working to be a barrier between their clients and big mistakes.

Between you and the big mistake
Be a barrier between clients and big mistakes better by keeping your health in check.

The answers that are given aren’t “Fix-It-Instantly” or “Instant Results” methods, but long term plans for planners to create dramatic long term results. Doesn’t that sound like what we do as Real Financial Planners for our clients? His answers are unspeakable almost obvious things such as eating healthy breakfasts, having a person you can talk to about your stress, and getting up to move every few hours of the work day.

Ultimately in comes do practicing what we preach. Doing simple basic things that we would tell our clients to do. Its enjoyable and refreshing to see how Carl makes important distinctions like the concept of Simple VS Easy, Sticking to a long term plan vs instant results, and the promise that doing consistent ‘boring’ things brings much more long term value than can be seen in 1 week. Truly keeping ourselves well and strong isn’t like a fad diet guaranteeing a six-pack in a week, or lose 30 lbs in 2 months. Carl tells us how to succeed, gives real examples of succeeding and reminds us that the excitement in life is a result of compound interest of doing the little things that seem to have no impact.

Compound Interest
Success seems boring, but like money it takes time to become exciting

Who is your confidant? Will you test the power of eating healthy and getting exercise? Will you do what you tell your clients to do by creating a plan of little actions to have big results? Don’t wait until you have a breakdown, end up in a hospital, or endanger your relationships. Let Carl’s new free workshop teach you how to get a release valve and keep you strong for yourself, your family, your company, and your clients.

Watch the 4-minute a day for 4 days series here. http://www.behaviorgap.com Put in your email and name in and Carl will send his Internal Talk training to you immediately!

-Jacob B Johnson
UVU student of Personal Financial Planning

SFSJacob (1)

 

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Financial AutoPilot: Why to Just Do It

When you have talked yourself into what you want, stop talking and begin saying it with your actions.

-Napoleon Hill

 

Ever heard of money scripts? Money scripts are the core beliefs and things that set off your “money button.” How does money make you feel? What role does it have in your life? Do you pursue money and think you can’t have enough? Do you wish money didn’t exist but accept that you need some? Psychologist Bradly Klontz made 4 general groups of people and how we respond to money.

  • Money Status: When you believe your net-worth equals your self-worth
  • Money Worship: Happiness is contingent upon having enough money
  • Money Avoidance: Money is bad, and it causes you anxiety
  • Money Vigilance: When you see yourself as your money’s Lord and carefully handle and direct its flow

Understanding your money script will help you see where some of your struggles lie. Everyone is weak, and everyone is human, but we also have some amazing strengths. We can recognize our weaknesses and find ways to avoid them, improve them, and sometimes overcome them and make them strengths. Key is: there is a struggle; people struggle to do things when they take a lot of mental effort and consistency. So, here’s the secret.

Put yourself on autopilot.

Let me say that one more time.

Put Yourself On Auto-Pilot

What do you think of when you think of an autopilot? If you saw something that was automated, perhaps driving or flying, without the need for constant human supervision, then you are on to something great.

As soon as your idea is strong enough to have a goal and a beginning action, don’t delay, put it into autopilot. Why do you struggle to wake up in the morning? Why can’t you stick to going to the gym? Why are you worried you can’t buy a house or go to college? It’s because you either didn’t start, or you didn’t follow through.

Here is how to put yourself on Autopilot, Financially:

1) Prioritize

First: Set your priorities. Where does your money belong? In 2-3 short sentences, or 5-6 individual words, summarize the most important things to allocate your precious hard earned Washingtons.

2) Where do you stand?

Second: List all of your obligations monthly. Figure out your debt, income, savings, and lastly, estimate how much you spend on different areas. Add it up. Does more money go out than in? Does more money get spent on areas you don’t want them to be?

According to Success.com‘s author Tom Corley, here is a standard budget draft you can think about to where you money goes and it looks something like this.

  • 25% maximum on rent/mortgage
  • 15% max on food
  • Limit entertainment (you know what that is) to 10% , Vacations should top out at 5%
  • No more than 5% on auto loans

In addition to these Guidlines here are a few more from my notebooks and practice

  • save 12-15% of your money for retirement (If you’re saving 10% and your company matches 3-5% then you’re good!)
  • Donate 10% of your income to charities that you love.
  • Get an accountability partner for your spending that you can share goals, numbers, and facts with

3) Auto Pay

Third: Auto Pay. Here is how many people try making their money work.
This is called “Mental Accounting.” It is a horrible thing.

The Real Slim Shady
Normal Person Mental Accounting

The problem with managing our money like this is all of your money is in the same place! We are normally poor at mentally accounting for our money. I won’t attempt an explanation of how, but the book, Why Smart People Make Big Money Mistakes by Gary Belsky & Thomas Gilovich will give you great insight to the many pitfalls of mental accounting, in addition to many other common money mistakes.

Alternative: This is called budgeting, and planning, and auto-piloting. It’s amazing! With mental accounting, if you have $500 (for simplicity sake) in your Selfish Money account for the month, then you know, I have that much money and it’s for whatever I want. When it’s gone, it is GONE. But I recommend going one step further, and this is called AutoPilot mode.

Establish separate accounts to be used. With your money in a different location it can’t be spent on what it isn’t budgeted for. Here’s how you can harness the power of Voluntary Automation (doesn’t that sound blissful?):

After Shady been slimmed
Each is it’s own account?

What if, when you got your paycheck, you set the money to AutoPay certain quantities to other accounts: 10% to retirement, $1400 for the mortgage, $500 a month for student debt, $200 selfish money, etc etc etc. The credit card in your pocket is only linked to the “Selfish Money” account, and the card you keep in your dash for fuel is linked to your car payment and gas money account. None are linked to the mortgage account, because the bank takes the money out of that account each month. I’m making this happen with several bank accounts and auto transfers set up.

Basically, the money is out of sight, out of mind (and you now have a license to be at peace. *Poof* Peaceful dust descends upon you).

There are many apps that can conglomerate multiple accounts so you can have a snapshot of how much money you have at any given point in all the accounts, or help you refine how much money you allocate to different accounts over time.

Then, once a year when you check your accounts, you can clear out the extra money to savings, more retirement, or maybe a surprise Christmas present.

4) Lastly: Stop checking your accounts daily! Stop checking your investments, your stocks, your 401(k)’s, your Roth’s, your {InsertYourAccountNameHere}. Just STOP. Although many want to argue differently- your human fear is going to have you selling things when they are dropping in value, and buying things that are rising in value.
The reason why is because of the Stair Effect. Over time stocks are going up, but experience highs and lows throughout the incline. This is because as you step up a stair, one foot follows the other, rising and falling, rising and falling, over and over and over. Walking up stairs doesn’t scare you, because you know you’re going to go up.
Investing should be like Christmas, or your birthday; best thought about for about 1 month a year, (all you people that play Christmas music in November… I’ve got my eye on you). Try this: pick the month (fine, semi-annually is acceptable) when you allow yourself to look at your accounts and mark it on your calendars.

 

Now you can kick back, relax, and go back to your beautiful life with one less item of stress going on in your mind. What ideas have you used to put yourself on Auto Pilot? I’d love to add to this list of ways to put yourself on autopilot! If you have an ideas, or critiques please let me know in the comments or email me:  https://jacobbradjohnson.wordpress.com/contact/
If this is helpful let me know also!

— Jacob Johnson is a student of personal financial planning (PFP) at Utah Valley University. He enjoys Oreos and Bacon with the occasional bowl of muesli and wakes up to read Napoleon Hill as a start to his day. He is an adept listener of Behavior Gap radio by Carl Richards, loves the blog of WorkableWealth by Mary Beth Storjohann, and ponders Jeff Rose the Finance Warrior’s blogs also.

— Our guest editor is Rebekah! She is a phenomenal editor with a degree in creative writing. She is such a blessing and help in defining what the purpose of a writing is, and helping individuals to craft language to not be redundant (well, at least in my case). Thank you Rebekah!