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If you chose Money....

7 Mistaken Beliefs About Money

By  Margarita Tartakovsky, M.S., PsychCentral

Our attitudes about money are formed in childhood, according to Maggie Baker, Ph.D, a psychologist who deals with relationship, money and wealth issues and is author of Crazy About Money: How Emotions Confuse Our Money Choices and What To Do About It.

And it’s these attitudes that shape how we use money today. Here are seven mistaken beliefs about money that you should consider relinquishing:

  1. Mistaken belief: Money makes you happy.

“It’s not money that makes you happy,” according to Kathleen Gurney, Ph.D, CEO of Financial Psychology Corp. and author of Your Money Personality: What It Is and How You Can Profit from It. It’s how you use it. “If you don’t know how you want to use it as a vehicle to create happiness, it will be used indiscriminately and never achieve what you value most.”

Consider your personal objectives, goals and aspirations, she said. Don’t be swayed by how others use their money, either. “The path to achieving a greater sense of happiness lies inside and not by following what others may do with their money.”

  1. Mistaken belief: Money is a scorecard.

Some people believe “if I make more money, I can be competitive and win the race,” Baker said. When money is the top priority for a person, and they lose it – because of a layoff, for instance – their self-worth shrinks. (“They mix up net worth with self-worth.”) They suffer significantly because money is the only thing that matters, instead of another person who places greater value in family and is passionate about other things, she said.

  1. Mistaken belief: Someone will take care of me.

Many women commonly believe that a man will provide for them, Baker said. A similar belief is that God will provide everything you need, she said.

Placing the responsibility outside yourself can mean you don’t pay attention to your money or worry about managing it. And such avoidance can prompt money problems.

  1. Mistaken belief: There is never enough money.

According to Gurney, “this is a common mental mistake and rationalization for not dealing with the truth of ‘what is’ versus ‘what we would like it to be.’” In fact, people tend to go into debt trying to reach this point of enough, she said.

The first step to living within your means is to focus on what’s most critical, such as survival and security, she said. Then learn how to add to your money for the extras you want. (“…[E]arn it through smart money management and not through delaying the transaction through debt.”

  1. Mistaken belief: These people must be onto something, so I should do the same.

“We hear of and watch others making certain financial choices and we start feeling like ‘they must be onto something’ and talk ourselves into following suit,” Gurney said. She used buying real estate as an example. A few years ago, this became a key trend, and many people bought properties they couldn’t afford.

Another example, she said, is “pulling retirement money out of more conservative investments to join in the frenzy to ride the stock climb only to find out that they have missed the climb.”

We can overcome this bias by “sticking to our original strategy and solutions that made sense for our particular money personalities, goals and financial situations.” Also, remember that the media provides “expert entertainment,” so it’s often tough to distinguish between what’s truly prudent – and best for you – and simply popular, she said.

  1. Mistaken belief: You can get great advice from financial gurus.

While you can learn some helpful information, be wary of one-size-fits-all financial tips. “Everybody’s situation is unique,” Baker said. Many factors, including your goals, age and risk tolerance, have to be considered. Baker wishes that the media conveyed the importance of working with a financial expert. Just like you’d seek out an expert who specializes in an illness you have, you should do the same with a financial advisor.

When searching for an advisor, you can ask friends, Baker said, “but be leery.” If you do turn to friends, ask them how much money, on average, the advisor has made for them, she said.

Baker suggested visiting these sites for more information: FINRA (Financial Industry Regulatory Authority), the American College of Financial Services and the Financial Therapy Association.

When interviewing potential advisors, she suggested asking these questions:

  • Who is your ideal client? For instance, advice to a 30-year-old will be very different than to a 70-year-old, she said. You want to find an advisor who helps people with your net worth and who will know which investments are most suitable for you, she said.
  • How much do you charge for your services? In a typical year, how much would I spend on your services? Do you make a commission from trading? It’s very important to see if the advisor is upfront about how much they charge and how they’re paid. According to Baker, some advisors get paid a flat fee per hour, while others get paid a percentage. “The more they make for you, the more they make [for themselves].”
  • Are you available anytime to answer my questions?
  • Do you subscribe to suitability or fiduciary standards? Suitability is a lower standard of responsibility. Fiduciary responsibility is when “you have an ethical responsibility to act in the best interest of your client,” Baker said. Let’s say an advisor’s company bought too much Coco-Cola stock, and they need to sell it off. This might be suitable for you, but it might not be in your best interest. (Here’s more information on the distinction.)

Consider if you trust or could trust this advisor. You might want to pick an advisor from an independent firm because they won’t need to push company stocks, she said.

  1. Mistaken belief: It doesn’t take much effort to manage money effectively.

Managing money actually “demands real commitment and attention to detail,” Baker said. “It involves sitting down and looking at all the money facts of your life, [such as] your bills, spending habits and goals.”

If you’re married, sit down with your spouse and get their ideas. “It’s a big mistake for one person in the family to do all of the money without consultation from the other.” (If one person is in control while the other is oblivious, this leads to relationship issues, she said.)

“Pay a little attention to [your finances] every day.” For instance, review your expenditures, open your mail and check your bills, she said. Use programs like QuickBooks to get a clear understanding of how much you’re spending and make adjustments as needed.

While money is a taboo topic, it’s crucial to discuss it with your family, Baker said. “Don’t be afraid to talk about money, or to ask for help from a financial therapist, your accountant or even a good friend.” If your friend is struggling with the same issues, you can work through them together, she said.

If you chose Luck....

Make Your Own Luck

Five principles for making the most of life’s twists and turns.

       By Rebecca Webber, published on May 01, 2010 – last reviewed on July 19, 2013

Mary McGuire-Wien and her husband, Charles Wildbank, had been searching for a new home on Long Island for more than a year, but every place they’d seen was either unsuitable or unaffordable. After one long Sunday of unsuccessful house-hunting with their agent, the couple was anxious to get back home, but got stuck at a traffic light right next to an old barn that was under renovation. “A guy in a hard hat  looked over at us and said, ‘Are you looking for a house?'” says Mary.

Though the barn didn’t look like a house—it didn’t even have any visible windows—Mary and her husband got out to take a look. The building turned out to be loftlike, with beautiful historical details (including back-facing windows). “A normal family probably wouldn’t want it,” says Mary. “But it was absolutely perfect for us because we needed a space where I could have a yoga retreat, and where Charles could paint.” They agreed to buy the place from the construction worker, who turned out to be the barn’s owner.

Mary and Charles could be considered fortunate—what are the chances that the owner would stop them when they were most in need of a home? And yet, they were the ones who agreed to investigate an unlikely prospect. Their open-mindedness turned a strange moment into a lucky break.

People who spot and seize opportunity are different. They are more open to life’s forking paths, so they see possibilities others miss. And if things don’t work out the way they’d hoped, they brush off disappointment and launch themselves headlong toward the next fortunate circumstance. As a result, they’re happier and more likely to achieve their goals.

Psychologists are figuring out why some people always seem to juggle incredible opportunities. Their insights can help us all lead luckier lives.

1. See Serendipity Everywhere

Luck is hard to study, and yet scientists have uncovered the startlingly large role chance plays in love and work. We are more like pinballs bouncing around a machine than captains at the wheel. Certain types of people are well suited to this fact of life.

Elizabeth Nutt Williams, a psychology professor at St. Mary’s College in Maryland, found that chance was a significant factor in shaping the career paths of thirteen professional women she studied. Women who take advantage of happenstance have competence, self-confidence, and the ability to take risks. They also have a strong support system. And a  North Carolina State University study found through interviews with 42 engineering workers that job tips  often come from unlikely sources in unexpected situations.

Richard Wiseman, a psychologist from the University of Hertfordshire and author of The Luck Factor, spent a decade researching people’s perceptions of their luck. He found that those who call themselves lucky score higher on the personality factor of extraversion. That means that they are more likely to have a fortuitous encounter because they meet lots of new people and keep in touch with a large group of friends and acquaintances. These advantaged souls also score higher in openness, and lower in neuroticism, the tendency to experience negative emotional states like anxiety, anger, guilt, and depression.

Wiseman conducted an experiment in which he placed the same  chance opportunities—money on the ground and a potential encounter with a connected businessman—in the paths of two different people, one who claimed she was an unlucky person, the other who said things always seemed to work out well for him. The “lucky” guy immediately noticed the money on the ground and pocketed it, then struck up a conversation with the businessman in the coffee shop where he’d been planted. The “unlucky” woman, meanwhile, stepped right over the cash, and sipped her coffee without saying a word to the same businessman.

2. Prime Yourself for Chance

Serendipity smiles upon people who have a more relaxed approach to life. They have clarified their long-term goals but don’t worry too much about the details. Rather than aiming to become the top cardiac surgeon at the Mayo Clinic, they vow to be a doctor who helps save lives. Once they’ve pinpointed the ultimate destination, they believe there are many different ways to get there. This requires openness to life’s surprising twists and turns as well as cognitive and behavioral flexibility.

An open person heads to the dog park thinking he might encounter a potential new friend, business partner, or romantic interest. A closed person sees only dog owners. “Don’t classify people and situations in advance,” advises Wiseman. “Wait until you know what’s in front of you.”

You can increase your opportunities for good luck by maintaining a large network of friends and acquaintances. Increasingly these days, the best opportunities float online, so make sure you’re connected. Case in point: Marketing expert Shel Horowitz  grabbed a chance to lecture in Davos, Switzerland, after noticing a LinkedIn search for conference speakers.

Cognitive flexibility can be cultivated, too. To limber up your own brain, try thinking about different points of view on a single topic. Maybe you have a firm belief that underwater homeowners don’t deserve a bailout. If that’s the case, try to come up with 10 reasons it might actually be a good idea.

You can also learn to behave more elastically. Flexible people often respond to the same stimuli differently  than do rigid types. They might take varied routes to work, or stop at out-of-the-way places for a cup of coffee, rather than heading to their favorite cafe for “the usual.” Exploring new territory naturally increases good fortune.

“Do something different,” says Ben Fletcher, a psychologist at the University of Hertfordshire. It doesn’t even need to be meaningful to your goal. Trying to get a date? Read your neighbor’s newspaper, switch seats on the train, or watch a new television program. Breaking behavioral habits can lever changes in mental habits that have kept you from success so far. “People’s lives can be absolutely transformed by being nudged along a slightly altered route,”  says Fletcher.

Try to keep your mood positive in order to catch more of the possibilities that whiz by every day. Researchers at the University of Toronto recently demonstrated the benefit of seeing the world through rose-colored glasses. They found that people in good moods actually take in more visual information, while those in bad moods don’t see as much around them.

Anxiety in particular gives us tunnel vision; while we’re focusing on a potential danger, we end up missing a lot of extraneous but potentially beneficial information. In another experiment, people were offered a large financial reward to carefully watch a dot on a computer screen. Occasional large dots were flashed along the edges of the screen, but the participants missed them. When they looked hard, they saw less.

3. Go Ahead, Slack Off

Conscientiousness is no friend to serendipity. A “big five” personality trait, it’s strongly associated with achievement. “Conscientiousness means you do what you’re supposed to do, and you stick with it,” explains Carol Sansone, professor of psychology at the University of Utah. Problem is, conscientious people will persist in a task even when there’s no good reason to do so.  This may explain why it’s possible to “try too hard.” By rigidly pouring all of your effort into one approach, you miss out on unexpected—but more direct—paths to success.

Wiseman conducted an experiment in which he gave subjects a newspaper and asked them to count how many photographs were inside. There were 43, and most subjects found them within a few minutes. However, they could have completed the task within seconds had they read the large type on the second page of the paper. It said “stop counting—there are 43 photographs in this newspaper.” Or they could have instead earned $250 had they noticed the half-page message that said “Stop counting, tell the experimenter you have seen this and win $250.” The subjects didn’t notice either message. But when Wiseman asked them to look through the newspaper a second time for anything unusual, they saw them immediately.

The takeaway? Allow yourself to stray off-task sometimes. We need to be loose to become aware of hidden opportunities. So even when you’re crunching to finish a project at work, participate in the cross-cubicle chatter, or follow the links from one interesting blog to the next. “You might miss your deadline,” says Sansone, “but you could end up creating more understanding of your topic. Allowing yourself some flexibility in the process can lead to better long-term outcomes.”

Catching lucky breaks gets much harder as we get older—not because our opportunities change, but because we do. “People in their teens and 20s tend to be open because they’re discovering who they are as a person,” says Todd Kashdan, a psychologist at George Mason University and author of Curious? “As we get older we become a lot more crystallized in our thinking. We think, ‘I shouldn’t be playing kickball because I’m 40.’ But who decided kickball is not a proper thing for a 40-year-old to play? We create these rigid rules and eliminate chances to change all the time.”

4. Say Yes

Once primed to discover life’s opportunity, what do you do when a juicy one jumps into your path? If you’re like most people, you’re immediately besieged by two competing emotions: intrigue and anxiety. You’re curious about that job opening, but you can think of a hundred reasons why you should stick with your current gig.

“Which impulse will you act upon?” asks Kashdan. “Over time we develop a pattern.” This explains why some people’s lives seem full of fortuitous circumstances, while others are riddled with regrets about roads not taken.

Teresa Bondora turned down an invitation to join Aerosmith’s tour across Europe as the band’s well-paid in-flight stewardess. “I wanted to finish college faster,” Bondora says. “But not long after I said no, the regret started growing. Who says no to something like that?” Doug Hadley passed up an offer to play professional beach volleyball in California after college, choosing instead to stay close to his family in Indiana. “It’s 30 years later and I still wonder how my life would have been different,” he says.

Serendipitous people are more fearless about trying something new. Instead of giving in to worry about what could go wrong, they think, “Isn’t that interesting? I’d like to give that a try.”

Good outcomes increase self-efficacy, or the belief that you are capable of accomplishing  whatever  you set out to do; they also fuel an appetite for future risk. John Olson first found fortune as a 13-year-old when he volunteered to sit apart from his classmates on the airplane during a class trip. “I ended up in first class,” he says. “The best part was seeing the faces of my classmates as they filed past me to get to their seats in coach.” Olson later worked his way up from supermarket stock boy to CEO of multiple e-commerce sites by pouncing on random opportunities—like acquiring a neighbor’s failed towel business for $20 and a case of beer. “If an opportunity is available, I will usually follow it,” he explains. “It’s allowed me to live in a sort of never-ending fantasy world.”

The rest of us have trouble ignoring our chattering minds, which might tell us we’re not experienced enough to do that job, not attractive enough to talk to the woman in the red dress. And our loved ones don’t always help matters. “As an actress, I turned down the chance to go to India,” recalls Kama Linden, now a lyricist. “My mother said I would get some disease and never be able to dance again. The girl who took my place said they were treated like kings and queens.”

Remember that our minds—and our mothers—don’t always tell us the truth. Acknowledge their concerns. Listen to your intuition, but don’t expect to feel 100 percent certain. “If we wait until all negative emotions disappear, we’re never going to go anywhere,” says Kashdan.

If you’re truly unsure about a decision, try asking yourself, “What’s the worst that can happen?” says Wiseman. And what’s the true likelihood of that horrible outcome? Another helpful tactic: Think about which action you will regret more in the future. “Sometimes there’s a short-term cost, in terms of your resources or time or stress,” says Sonja Lyubomirsky, a psychologist at the University of California at Riverside and author of The How of Happiness. “Like going to a party. You don’t really want to go because you don’t know anyone, so it’s anxiety-provoking. But you end up having a great time and meeting new people. You paid a short-term cost but got a long-term benefit.”

5. Embrace Failure

Of course, not every exploited happenstance will turn out well. Nancy Irwin broke her engagement to “a wonderful man” in order to pursue a career as an opera singer. But it didn’t work out. “My voice is not big enough,” she explains.

But like all serendipitous people, she was resilient: She took the suggestion of a theater critic to try stand-up comedy. “That lit me up. I went to a hole-in-the-wall open mic night and killed. I was hooked,” she says. Later, she became a psychotherapist, and while she’s incredibly proud of her accomplishments, she admits, “part of me wonders what my life would have been like if I had married Mr. Wonderful and had 2.2 kids and the big house and country club membership.”

The lives of the serendipitous are not always perfect and regret-free.  “Most successful businesspeople are also failed businesspeople,” says Fletcher. “The key factor is that they go after fortuitous moments, and they’re not put off by failure once or twice.”

And whether or not any chance taken turns out well or badly, the benefits of regularly seizing serendipity are many. For one thing, it increases our day-to-day happiness by bringing variety to our lives. Recent studies by Lyubomirsky have shown that deliberately doing different things every day boosts contentedness in the short term and the long term.

Also, seizing random circumstances—like talking with the stranger in the checkout line, picking up and reading an abandoned magazine, or ducking into a store that caught your eye—adds novelty to our lives, which in turn can actually cause the growth of new brain matter and push back the cognitive decline of aging.

Sometimes, maturity can even give us the courage to do something we were too afraid to do in our youth. Fifteen years ago Vivian Hutcheson turned down a chance to show her artwork—ornate clay masks—to a Hollywood special effects studio. “I felt angst about what it could lead to: Did I want to be an artist? Was I willing to move?” she says. “I never did get my portfolio to him.” For years she regretted letting the offer slip between her fingers.

But after finishing her science degree, she realized she didn’t want to work in a lab for the rest of her life and returned to mask-making. “I opened my own store and studio and now I’m taking a real shot at making a living as an artist,” she says. Today, she reaches millions of potential customers around the world with an e-store on Etsy.com, an option that didn’t even exist when she was in college.

That’s good news for the regretful. Even though some serendipitous opportunities slip away, there are always new ones coming along. —Rebecca Webber

Born Lucky

Some birthdays are better bets than others.

Scientists don’t tend to buy into astrology, yet they’ve established that certain conditions such as schizophrenia, and even personality traits such as novelty seeking, are linked to birth months. It’s not the planets at work per se, but rather subtle influences on fetal brain development due to factors including sleep and wake cycles and the prevalence of viruses that differ from season to season.

Knowing that some temperaments are linked to self-proclaimed luckiness, Richard Wiseman and colleagues decided to find out if fortune really is dependent on your grand entrance into the world. They asked a group of British study participants if they considered themselves lucky, and also assessed key personality traits.

Across genders and ages, people born between March and August believe themselves to be luckier, on average, than those born in the colder months of September through February. (Relatedly, summer babies grow up to be more open-minded and less neurotic than winter tots.) May is the luckiest month of all, so if you want a fortunate kid, try to get lucky in August.

Think Lucky

The best opportunities arise when you approach life with a flexible mind-set. see how you can get out of the unlucky column:

If you think this way about: Romantic Relationships

“Here’s my checklist. He has to be smart, attractive, financially secure, subscribe to The New York Times, love to cook, and love dogs.”

Try this approach instead: “I don’t really have a type. I’m open to anyone as long as he’s a good person. I’ll know it when I see it.”

If you think this way about: Work

“I need to finish this project by 11, team meeting at 12, lunch at 1, finish that report this afternoon, and I’m home free by 6.”

Try this approach instead: “I want to try to accomplish two major things today, but in my downtime, I’m going to explore a few other ideas that could help the company or my career.”

If you think this way about: Friendships

“I already have a handful of really wonderful friends.  I don’t need or have time for anymore.”

Try this approach instead: “I love to make new friends, even if it never goes farther than a conversation and Facebook friending.”

If you think this way about: Errands

“I need to hit the dry cleaner, the bank, and the grocery store. I should be home in time for the game.”

Try this approach instead: “I have to get these things done, but I’m not going to rush because I don’t really know what to expect or whom I’ll meet. It will be interesting to see how it works out.”

If you think this way about: Business Meetings

“I’m meeting up with this person to do a deal, not thinking of them as a friend or a potential partner.”

Try this approach instead: “I’ll accept a meeting with anyone, anytime, because you never know where it might lead—even if it’s five years down the road.”

If you chose Luck....



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