Guest Post: Finance is personal

Why ‘Finance Is Personal’

9781440834363Finance Is Personal: Making Your Money Work for You in College and Beyond gives you the tools to understand what you want, short and long term, to have a rewarding life. How to set plans to achieve that life, to balance what you want now against what you want for the future and then to manage your thoughts, emotions, behaviours and habits so that you can stick to those plans and use your money as a tool to achieve your dreams.

Imagine you have a friend who had a really expensive new car, a Ferrari or an Aston Martin say. Suppose they go on holiday and ask you to look after the car for them. Would you drive that car more carefully than you do your own?

Why – you’re in both cars?

You’re unique, there’s only one of you, only ever has been only ever will be; even if you’re an identical twin, you’re still unique. There are plenty of cars, even expensive ones. Are you really worth less than something that can be replaced?

Imagine that you’re in a quiz show to win £1 million. You’re allowed to “phone a friend” and get help. You have a choice of subject matter, questions can be about money, things like hedge funds and tax incentives on savings. Or they can be about how your subconscious works, what dreams are and why we have them, why you do things that afterward you ask “why did I do that”, about your emotions and why you might deal with major calamity calmly, but dissolve into tears over a sad film. Which subject do you choose?

Bear in mind that £1 plus a £1 is two pounds, it’s a certain right answer. And people invented money, hedge funds and so on, so there are people whom you can phone and ask for precise answers. On the other hand, 1 person and 1 person could be the cure for cancer or a weapon of mass destruction, it’s not clear to anybody what the right answer is. Nobody has any complete picture of how the brain actually works, what its limits are or why sometimes it doesn’t work, so whoever you ask you’ll either get some lies or you’ll get the admission that “we think it’s probably something vaguely like like this, but we don’t really have any idea and we may well be wrong”.

Which do you think is more complicated, and needs you to have a lot more luck in order to win the £1 million; money or you and your thinking?

Most financial advice is about money, how to get the “best return on your money”, how to make more money, how to save money, how to manage your money.  But the money is just a tool, it’s even more replaceable than a car, it’s just a simple way to exchange things. And it’s really simple, one and one are two. Shouldn’t the advice be about you, what the “best” return actually means for you, how much “more” money you want and what you want the money to do for you when you get it, what you are saving the money for and when you will need it, what you want to manage it to do for you? And how, when you know what you want it for, you manage to control yourself to do exactly what you planned instead of blowing the money on an impulse buy.

Most financial advice assumes that you are simple and money is complex and that “experts” can tell you the “best” way to get what you want – even though they don’t know anything about what that is, how you think, what might really matter to you or how you typically operate. And neither have you!

The common assumption is that you are unimportant and simple, while money is important and complex – which is exactly the opposite of the true situation.

I spent 15 years as a financial advisor. When I got bored with how simple and trivial it was and wanted to learn more about the complicated, important bit, the clients, I realised something. People really think money is too complicated for them. They think that they need to be told what they should want and do with their own money, just as some people will believe the doctor knows more about what they are feeling in the way of pain, stress and their own body than they do themselves. And people think they are stupid so money is too complex for them, and they are so simple to understand that a financial advisor with no training about people can instantly know exactly what they want to achieve with their money and tell them what to do to get it.

It gradually dawned on me as I studied and practiced psychology how little useful information there was for people to take control of their own money. Everything was geared to telling people what they “ought” to do, how they should save, invest, live. It all treated money as important, as if it was the sole reason for people to exist, and treated humans as being trivial and interchangeable.

So I wrote Finance is Personal, to try to redress the balance.

The principles apply to everybody, but it’s aimed specifically at those going to college because:

  • They need it most – student debt is reaching levels where many will never pay it off.
  • They aren’t too set in their ways and are deliberately trying to learn new things so they can start their adult life with the skills to get where they want to go.
  • They are probably already sick of people (parents, teachers, “experts”, media) telling them what they ought to think and making decisions for them, so they’d really like somebody to give them tools for them make their own decisions about their own life.

And there’s another reason

  • I got a contract from a US publisher that saw the need for a book like this for the college population, something that hasn’t occurred to anybody in the UK, or in any other area but university students!

If you’re interested in what my own goal, purpose, life ambition is, it’s to change the way people think about money, stop treating it as some sort of Holy Grail and seeing it as what it is, simply one of a number of tools for living a happy, fulfilling life. The obvious place to start is to influence education, to make sure that kids are taught to get things in perspective and to see themselves as the important and complex factor and to learn a lot more about themselves and how they operate.

So I’m hoping that people are going to read the book and suggest it be stocked in libraries (particularly university libraries) so that the widest possible readership can get the message.

And if there are any alumni out there in publishing who are interested, get in touch – because there are a lot of other people whom we could help with information geared to their particular situation.

Guest post by Kim Stephenson (MSc Occupational Psychology, 1997) who spent 15 years as a financial advisor, then studied psychology. He’s a consultant, writer and media commentator on behaviour with money and the only person in the world qualified and experienced in both areas.