A preview of lessons and next steps from the book.
Most people are engaging with financial planning on a silo, transaction-level basis because most financial professionals come from a business, accounting, or sales background. That may or may not make sense in the context of their lived experience; individual results may vary.
Finance is focused almost entirely on the financial outcomes; however, those outcomes are built on the foundation of relationships. Information is only as valuable as our relationship to the source. Sometimes we get problematic advice from someone we trust while disregarding excellent advice from someone we don’t.
We intend to grow the middle class by explaining how financial systems disproportionately affect the highest and lowest income Americans and share four pathways.
The Problem
BARRIERS TO ACCESS
Measure absolute dollars vs. percentage change (that’s how advisors are compensated)
Cognitive Bias - all humans have bias in decision making, which affects assessments of trust and competence
The compounding effect of generational poverty and generational wealth
Strength of safety net for taking risks
BARRIERS TO CONNECTION
Acknowledging trauma - failing to acknowledge it makes it harder to heal
History - the effect of our nation’s history is not accounted for in the present
We subconsciously connect human value and dollar value
The asset gap is growing because we naturally socialize with people in similar situations
We have to acknowledge the past
We have to acknowledge the math
We are all influenced by our own stories and the collective stories that we tell, which is why finance to be relevant must be cultural. Change From Your Dollars tells stories about money, not statistics. Many people turn to numerical articles or anything relentlessly logical when we are all affected by money as much as we are all affected by water. The principles of math were derived from observation of our natural world.
“Money is like water. Both can nourish or drown us, calm or excite us … And many of us never get swimming lessons.”
People with very different stories and very different personalities are able to achieve positive financial security
Through thousands of confidential conversations and in sharing my own stories in the book, there are four behavioral pathways to getting good financial outcomes. The starting line will be further back for some than others, but one or more pathways will work for you because they account for all situations.
Behavioral Pathways
Clients don’t share one story or one pathway. As a group, they share patterns and overlap. It’s easier to build on an existing strength than try to reinvent yourself to cover a weakness. When clients try to chase other people’s examples and anecdotes, they get tired trying to be something they’re not. They might be putting in the effort, but if the effort isn’t aligned with a pathway that they can deliver on, there will be a disconnected outcome.
A good example for comparison is the Five Love Languages; two people might be expressing themselves yet missing the mark.
“Every person would benefit from some time spent in teaching, the service industry, or sales. Disrespect, bad tips, door slams: routine rejection is the common thread.”
Rate of Rejection
ROR also stands for Rate of Return, and there’s a very strong correlation. In order to win you must risk a loss. If you’re in the arena, playing the game, your skills will improve over time. Risk of rejection is the most external pathway, because absorbing rejection isn’t easy. The community organizer and sales rep alike get brushed off. The actor might bomb the audition. The attorney might lose a case in court. The political candidate might become a punchline for millions.
So much of mindset coaching is focused on accepting and learning from failure. Hard to do, since we all want to be accepted. Compensation tends to reward people that do what others don’t want to do: be rejected and perform under pressure. This is the immigrant story: leave everything you know and start over at the bottom. It’s the critical point of almost every Disney movie: it tests what we’re made of, and how important the goal really is.
This pathway doesn’t require imagination, but it does require persistent visualization of success. And thick skin is a must.
Think big, but start small. Growing your gift means putting in the practice long before any performance, opening, or sale. We all have gifts, but gifts need to be nurtured, not neglected. A person sharing their gift is likely to find financial abundance once it is magnetic enough. A performance or a business can scale, that is: a gift has been developed enough to create a multiple of demand. The open mic night becomes a theater, the high gym becomes a sold out arena. But often growing your gift is more subtle. Not everyone is a performer or inventor.
Your gift is a unique ability or insight and it may be hiding inside your job description … What part of your job do you love and excel at, and how can you spend more of your time doing that? Gifts are grounded in abundant thinking. Grow them with vision, focus, and faith. (That said, gifts can be destructive when grounded in scarcity thinking, like fear-based messages.) A unique gift offers more to the receiver than they pay in return.
This pathway doesn’t require balance or harmony. It’s often the opposite, a meteoric obsession that leaves collateral damage. That’s why rock stars need managers and dictators need a military.
Grow Your Gift
Buy What You Use, Use What You Buy
Be intentional. A good result of capitalism is a well made product that fits your needs perfectly. A bad result of capitalism is buying something you won’t use because of manufactured feelings of inadequacy. This pathway is all about knowing yourself, detaching from social comparison, and recognizing the difference above.
Some products are made cheaply and break easily, but many like furniture, cars, bikes, and even clothes, are made to last a long time. The longer you keep cars, furniture, clothes and the more you use them, the more dollar value extracted. It’s a strong case for minimalism. The empty guest room was bought but isn’t used. The home gym is collecting dust. Oh, and interest charged on financing is always frontloaded. The seller of a product or provider of a service has to be ready to deliver when you want it. The seller already committed, you the buyer must also commit to get full value. So, changing your mind always has a cost. FOMO will undercut this pathway, always chasing a shinier, newer thing. Ownership is for unlimited use. We pay for quality, so make sure you love it or need it. Or love it so much you need it.
This pathway doesn’t require much rejection, just remember you can’t keep up with the Jones’s on everything. But it does ask for a lot of reflection: What do I really like and why?
A lot has been written about habits. Starting a new one is nearly impossible, but so is breaking an old one. Simple things like saving, situps, and salads have a powerful effect on our lives when compounded day after day, month after month, year after year. Simple, but hard, especially at the beginning! As Les Brown said, “do what is easy and your life will be hard.”
Compounding builds over time, accumulating power like a river current or an avalanche. Thirty-minute workout 4x per week or one two-hour Saturday? $50 per month for five years or $2,500? Small actions done well consistently add up. This pathway is the most internal: habits are all about discipline in action when no one is looking. But complex forces compound over time as well: wealth and trauma alike are usually passed generationally. Systems influence compounding for better or worse, because systems steer us to the path of least resistance, like a river current. It could be tax laws, auto-transfers, or a meal planning service; all build habits. Changing course is hard, maintaining momentum is easier. Getting started is the hardest.
This pathway doesn’t require much unique insight, in fact it’s grounded in conventional wisdom millennia old.
Compounding Actions
All pathways can be used to access money - what happens next is up to you
Every dollar has a social impact.
We can create change from our dollars, improving connection and access for all.
Money is a construct, it’s used by Oprah and Hitler and you and me; the difference is that if you start with a scarcity mindset, you create a win-lose view of life, but if you think abundantly, we can care for everyone. After all, socialism is about sharing, capitalism is about creativity, and we all want some of both.
BARRIER TO CONNECTION
Spending - We can promote or facilitate connection through all of these things: spending on local businesses, etc.
BARRIER TO ACCESS
Voting - Access can be changed with intentional voting, which affects policy. If we don’t like what’s happening, we can rewrite the rules because companies and governements need our dollars and endorsements to operate.
A river begins a small, slow, stream. It just needs time to get going. Upstream investments almost always yield results if we have the patience to wait.
Democracy is messy, but a healthy democracy is always adapting, just as a river current will become fast or slow, deep or shallow, depending on the environment.
For example, decoupling property taxes and public school funding, or limits on political campaign contributions from lobbyists, or public transportation for all.
Downstream incentives steer our direction after the current has picked up speed.
For example, tax credits and deductions, local spending, or interest rates
So stop doom scrolling and take small, consistent, incremental action. When we focus on the social impact of our dollars, we are more intentional consumers and voters. Upstream policy reforms call out our commitment to the American Dream: do all children get access to opportunity?
We all can do our best work when we are our basic needs are met. Downstream incentives call out our role as referees in the game of money: the public and the private sector need our dollars to exist. They work for us, not the other way around. The rulebook can change.
What can you do?
Reflect on which pathway(s) to financial wellness suit you and seek to align your actions.
Find a handful of friends you trust and form your own “board” in order to have a confidential, personal sources of financial advice. Even if you don’t get answers, you’ll feel better sharing out loud.
Learn how we can create or compliment your employee benefits.
Reach out to us to learn about career opportunities or book Brett to speak to your organization.