But, should this disinclination to discuss money extend to investment or cost saving opportunities where you may be able to financially assist family, friends and acquaintances? Are there situations in which you do not have to reveal personal financial details, such that one can disengage from the money taboo?
So, where am I going with this? Let me ask you the following questions:
- If you are a stock picker and have a new favourite stock, would you inform your family, friends and acquaintances about this stock?
- What if you found a great cottage to rent this summer at a great price, but you can only use it two weeks of the summer, would you inform your family or friends of its availability?
- What if someone came to you with a private investment which you thought was the next Facebook, would you offer this opportunity to your family, friends, acquaintances or clients?
- What if you found a great real estate property you felt could be fixed-up cheaply and flipped quickly, but you would be stretched to purchase it yourself. Would you offer a piece of this property to your family or friends?
- Finally, what if you have a client or contact who is a distributor for Armani suits for men and Christian Louboutin shoes for women and they offer you a standard 50% discount and allow you to bring a guest, would you bring a guest?
Personally, I would answer yes to all the above and not think much about doing such. To me, if I can make money and also help someone make money or save money, I am happy to share the wealth, so to speak. In fact, I have done all the above in some shape or form. This does not make me a good person, I have several other faults; but I am just not selfish where I can share the spoils of a good investment or opportunity.
However, some people are not as forthcoming. The question is why?
I see a couple of potential reasons.
The first and most justifiable reason is; that although many people are willing to take a personal financial risk on a stock pick or investment opportunity, they do not want to be held responsible if others lose their money. I think this is a very valid concern. The only counter argument I have for this concern is; if you know your family and friends well, you probably know to which people you can say, "Here is the opportunity and here is the risk. You are a big boy or big girl, make your own decision, but I am partaking in this investment and if you follow suit, you do so with the same risk I have assumed".
I would suggest for the people in the subset above, most would probably inform family or friends about the cottage rental opportunity and Armani suits/ Christian Louboutin shoe sale, because in these cases, there is no risk of financial loss and blame, as you are just helping others save money.
This leads me to an alternative reason for not “sharing” investment opportunities or cost saving opportunities. Many months back I wrote a blog post called “How we look at money”. The post centered on a study by Dr. Brad Klontz a financial psychologist.
I would suggest it is this subset of people that do not involve or inform others of these investments and cost saving opportunities. Their actions are a result of their competitiveness in acquiring more than those around them, such that they feel more powerful with the exclusivity of being involved in these opportunities while excluding their family and friends.
These people feel that if their investments work out, they will have more money than their family, friends and acquaintances and reinforce their financial superiority. In the case of the cottage they would not let others know about the deal they received, yet they would invite guests to the cottage to show it off. The same would go for the suits or shoes; they would rather show up in the Armani suit or Christian Louboutin shoes to reinforce their perceived power and status and would not want others to present the same image.
As I have stated on numerous occasions, I find the psychology of money intriguing. Think how you and the people you know would respond to the above five situations and whether these situations would provide a view into your/their financial psyches.
P.S.-- Just so none of my family and friends think they were the inspiration for this blog post, it is based on as Gotye says, "Someone That I Used to Know" (My Own Advisor, how is that for a current music reference?).
The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.
I don't think I would have a problem with any of these. Mind you, I'm a disciple of passive management so #1 does not apply. I'm certainly not shy to preach my beliefs to anyone who will listen when approached (I’m an advisor) for quick tips in casual settings.ReplyDelete
Thx Bruno,I figured with all you passive investors out there, that #1 may be N/A to many.Delete
While your not shy, many are gun-shy when it comes to money advice. However, some people are just selfish, even if it is just letting someone know how they can save money.
First all, good music reference. Nicely done Mark :) I just wish they (radio) didn't play the song so much, getting to be overkill for that Song of the Year.ReplyDelete
Secondly, I answered "yes" to many of the questions above. I think given the transparency offered on my blog, I do not fall into the "money scripts" concept. However, as human and flawed as we all are, I can definitely see how we all might lapse into the competitive stance now and again.
Keep up the great posts. Will include in my Weekend Reading roundup.
BTW - do you like Metric? Probably one of my favourite bands. Great Canadian songwriter, Emily, the lead singer.
I would assume most bloggers would typically answer yes, since they are in esscence providing free info every time they blog.
Not a Metric fan. Seems like a lot of guys are Emily fans :) I still would take Stevie Nicks any day in her prime.
There's too much risk in many of those things. I don't want to tell a friend about an investment and then have them blame me when they lose money. I'm not a professional advisor, so I don't provide anyone with financial advice except at the most basic level.ReplyDelete
Not an unusual stance. HOwever would u tell friends about the cottage or suit or shoe sale?