For round nine of our “Leave it to the Pros” series, we’re doing something a bit different. Today, we’re sitting down with two financial experts: Dr. Stephen Goldbart and Joan Indursky DiFuria, co-directors of the Money, Meaning, & Choices Institute and co-authors of the new book, Affluence Intelligence.
Q: You both cofounded the Money, Meaning & Choices Institute. Tell us about what this company does and why you started it.
A: Back in the late 1990s in the San Francisco Bay Area, we began to see a new breed of clients: People who had benefited from the Silicon Valley boom, or from inheritance, who had come into life-altering amounts of money. Unlike most people’s expectations, money was not the panacea for their life issues – they had many questions, concerns and uncertainties about the impact of this wealth, both in the here and now, and in the future.
As we delved more deeply into their psyches and learned about their daily lives, we developed programs and services that were about both the opportunities and challenges of wealth. At the core of our work is helping people gain clarity on their deepest values and goals for the spending, sharing, and saving of their money. Along the way we coined the phrase, “Sudden Wealth Syndrome,” as a shorthand to describe the psychological problems that many experienced.
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Today, Money, Meaning, & Choices Institute (MMCI) is a group of professional facilitators and advisors with a unique blend of senior level psychological and business expertise. We work with wealth holders and their professional advisors to address the psychological issues and challenges of wealth. Our objective is to offer high level thought leadership and facilitation, implementing best practices, planning for success, and responding effectively to conflict. We offer services directly to individuals, couples, family businesses and families of wealth, including facilitation, phone consultation, and workshops in order to maximize the opportunities and minimize the risks of wealth.
Q: That’s so interesting. I find it fascinating that people who come into money suddenly would have emotional issues. It sounds like most people’s dream. You recently wrote the book Affluence Intelligence. What inspired you to write this book? What did you learn from writing it?
A: We have been on the fascinating journey with those who achieved the 21st Century version of the “American Dream”- who through ingenuity, optimism, timing, smarts, people skills, and sheer persistence (and of course, a degree of good luck!) obtained what most of us want: money, happiness, and personal fulfillment. We wanted to share what we have learned, to educate and empower people to increase their personal affluence. In working with our affluent clients we arrived at an astonishing discovery: They are made up of the same chemistry and capacities as the rest of us. They are you, and you can be them!
More specifically, what we learned is that affluence is actually based on a certain way of thinking: Affluence Intelligence, a mindset that makes people not just wealthy, but deeply fulfilled. There are seven elements of Affluence Intelligence, with only one having to do with the amount of money in your bank account. We then discovered the four key areas necessary to unlock Affluence Intelligence:
- Priorities: These give direction and energy to your financial and lifestyle choices.
- Behaviors: These are the ways in which you act that foster or impede your progress in attaining Affluence Intelligence.
- Attitudes: These are the beliefs and mindset about money and your life, both conscious and unconscious.
- Financial effectiveness: The capacities of both financial competency and financial ease that enable you to be both capable and secure in your hands-on relationship with money.
Our program starts with an assessment of your strengths and vulnerabilities in these four areas; we call this score your AIQ (Affluence Intelligence Quotient), which shows you exactly where you stand, providing you with the information needed to increase your potential to become more affluent.
So, contrary to what most believe, true affluence can be obtained by anyone; all you need is the courage to honestly face your AI strengths and vulnerabilities, to be open to change, and to be willing to make use of the Affluence Intelligence strategies found in our book.
Q: What a wonderfully inspiring concept! In the book, you talk about a saturation point when it comes to money. You say, “Having $10 million does not give you more happiness than having, say, $8 million.” Tell us more about this saturation point.
A: Recent studies have suggested that once an individual in the United States makes $75,000 per year, there is a diminishing return on happiness. What we have found is that the “saturation point” has more to do with one’s Affluence Intelligence Quotient than a particular amount of money.
For example: in the book we talk about people who live at a fairly low level of income and feel very satisfied and happy; while we have spent time with millionaires who manage to outspend their huge asset base, and feel miserable. Of course, if you are struggling to get by paycheck to paycheck, having more money is an important solution, but how much after that will make you happy?
More income can make life easier if, and only if, you are driving the money and the money is not driving you. So if you get more money, and have developed clear values and an action plan, and you are financially effective, yes more money will likely reduce financial stress. But if you get more money, and you do not have a values-based action plan and are not financially effective, you are more likely to end up with the same financial stress as you had before. Indeed, recognizing that greater income has not solved your problems may leave you even more depressed.
Q: Ahh, I see. Your book also looks at how to become financially effective. Can you share with our readers some of the steps they can take to become financially effective, and what this means?
A: Financial effectiveness is a combination of financial competency (the nuts and bolts of money) and financial ease (the psychology of money). Start with knowing where you stand by taking the financial effectiveness component of our Affluence Intelligence test. It is available for free on our website: Affluenceintelligence.com.
Once you know where you stand, develop a doable action plan to improve in this financially critical domain. You can make use of the program we describe in our book, or use one of the many other programs available online. What is key is to take responsibility and to take action for your strengths and vulnerabilities in this domain. This means getting out of what we call “the money fog” and taking action, now, to make the changes necessary.
Q: You also look at the various money psychology personalities that exist, like spender vs. saver. Let’s say someone leans more toward being a spender. How can they use this awareness to become financially effective?
A: Awareness is power if you use it to change your behavior! Each of us has a unique money psychology that results in particular strengths and vulnerabilities that impact Affluence Intelligence. From our perspective, being a spender or a saver is neither good nor bad; it is vitally important to know how you can maximize your personal strengths and minimize your weaknesses, to best exercise Affluence Intelligence.
For example: If you find that you are a spender but you are financially effective and have financial ease about your money, then your spending may not be a problem. If however you are not meeting other needs that you highly value, whether it be paying the bills or saving for retirement, then spending is getting in the way of attaining Affluence Intelligence, which includes “being safe in body and mind” and “having enough money to meet not only needs but also wants.”
Start by taking the AI test and learn your personal strengths and vulnerabilities. Look at your AI profile, with an eye on your scores in the area of Financial Effectiveness. Next, make a plan for how you will use that information to directly affect your decisions about the spending, saving, and sharing of money. Create simple, doable action steps; it is not necessary to change your entire money personality. Importantly, start tomorrow and make it real: get friends and family on board with your action plan and ask them to help keep you on track.
Q: What is the most important piece of financial advice you’ve ever received?
A: Live within your means, never make money your core value, and take a hard look at what really matters to you in this lifetime around your financial choices. Take hold of what really matters to you and how you spend your time, as time is the one commodity that money can’t buy. Many of us look around and feel a pressure to keep up with others, which can easily take one off track.
Review and renew your life choices so that are aligned with what is important and what is meaningful to you, not what you see around you. At the end of the day, most of our clients tell us that it is how they spent their time and who they spent their time with that matters, rather than how much stuff or money they have accumulated. If you are spending all of your time making money or worrying about money, your life is out of balance. Take the time today to sit down and reflect on what you can start to do to get your life back in balance.
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Q: If readers could do one thing to improve their financial lives, what would you tell them to do?
A: Here are some tips based on our many years of working with people who have attain both personal and financial success:
- Have your priorities and values drive your money not your money drive your values. Money is a tool to live your values, to help provide for your sustenance, care, and satisfactions. This is the single most important lesson we have learned from our successful clients. Know that your self worth is not equal to your financial worth. Money should not be a primary value, as it is not a substitute for self-esteem, love, connection, real productivity, or personal integrity.
- Use a Regenerative Economics mindset: Review your spending and saving decisions. Are these decisions regenerative or degenerative? What do you need to do to shift the balance? For example: Buy Local: Purchasing from local business enterprises put money back into your neighbor’s pockets, an activity that is regenerative for you and the community in which you live.
- Practice conscious consumption: take the time to Ask yourself, is this purchase a need or a want?
- If you need to earn or save more money, keep in mind: Spending less is earning more.
- Nourish your physical and emotional health. Don’t defy common sense: if a financially-related activity is making you sick, stop doing it….now! Your health and your time is precious, and not for sale.
- Take Action: Create a three month plan for yourself, with doable action steps that you will implement today. In our book we describe a step-by-step method for creating such a plan. No excuses. Walk your talk, implement your plan.
- Get support. Find a person (not your spouse) who is willing to be your Affluence Intelligence Buddy, a source of support and accountability.
- For each discretionary dollar of spending, put a predetermined percentage of that amount into saving and or charity.
- Give locally, nationally or globally: Give to a charity or cause that matters to you. Giving, whether it is in the form of money or your time, will make you feel rich, and is regenerative. We have been amazed by the powerful sense of fulfillment and satisfaction that many of our successful clients experience through their generosity in giving both their money and their time. Whatever you can afford, no matter how little time you have to give, it will make a difference-for you and for the receiver of your gift.
Learn more about Stephen and Joan at www.Affluenceintelligence.com
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