https://www.kimsnider.com
Think back on the seminal events in your life. How many would you say were fortunate? How many unfortunate?
Financial planners have a term for those changes. We call them transition events. Examples of transition events include: marriage, retirement, career change, divorce, loss of a spouse or parent, a windfall or settlement, bankruptcy, the sale of a business and inheritance.
Almost all of these events will have both a financial and an emotional component. Some, like marriage, retirement, a windfall or sale of a business are occasion for joy, excitement, optimism and hope. Other times, life's twists and turns bring sadness, anxiety and fear. If we are honest with ourselves, even the "positive" events often create mixed emotions.
My advice ... take time to deal with the emotional component before dealing with the financial. I was mentored for awhile by a psychologist who worked with traders at hedge funds. He told me, "Whatever unresolved issues you have in your life will play themselves out in your trading."
At the time, I dismissed his statement as a bunch of psycho-babble. Probably because I had unresolved issues I couldn't face at the time! Imagine that!
But years later, I was able to see that he was absolutely right. And it wasn't just in my trading, it was how I handled every aspect of my money - from the investments I chose, the house I chose to live in, the car I drove, even the people I chose to hang out with.
When we face a transition event, there are always going to be a tangled mess of unresolved emotions immediately following. If you have experienced a loss of some sort, you will probably feel hurt, grieving, angry, confused or needy. Who knows. Emotions are a complex thing. If you have experienced a windfall, surprisingly, you often feel many of the same things!
Whatever the emotions are, you need to take care of those first, before making any major decisions about advisors, investments, gifts or purchases.
Also, and this is going to sound cynical, beware of anyone who suddenly "appears" in your life after a transition event, especially one that involves a lot of money. Bankers, lawyers, brokers, insurance agents, long lost friends and relatives who suddenly appear can only have one thing in mind - to get something from you.
Same thing with new relationships. We often try to fill holes in our life, especially freshly created holes, by stuffing something or someone in them. Give yourself the gift of time.
A good rule of thumb is six months. Try not to make any decisions about anything, for at least that long, if you can possibly help it.
If that means money sits in a bank account or a money market fund for awhile, so be it. If that means you stick close to old friends and loved ones for awhile, that is probably a wise move. Decisions made within that six month window have a high likelihood they'll be bad ones. Only after you take care of you, will you be in a place where you can take care of the money.
When it does come time to take care of the money, the next step is to do so from a place of confidence and power, not weakness and fear. I have always believed that knowledge and support are the keys to financial empowerment.
In my experience, and please excuse the genderalization here but it's true, women are much less likely to stake out a position of financial empowerment than men. According to a recent LIMRA study, 60% of women are unsure of where to get help or the costs involved.1
Man or woman, a little knowledge can go a long way. When I first decided I was going to get smart about my own money, I turned to books. Some books are very helpful. Others are just a thinly disguised sales pitch or a regurgitation of tired, old ideas that no longer apply.
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10 Lessons From the Smartest People I Knowby KimSnider923 views
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