I would like to introduce you to a few of my friends. They are a bunch of interesting characters who potentially have one thing in common…one of them could be YOU!
Don’t get nervous, we all can have traits of one or a bunch of them, but as you read through them, think about which one you may relate to the most. Does anyone resonate with your personality, even if you don’t want to admit it! Before I get the introductions on the way, let me give you some background. Our team deals with hundreds of households, couples, and individuals, and this means we have hundreds of different personalities we work with. I started noticing some common traits especially after interviewing hundreds of women for my book, Strong Woman Stronger Assets. Because of these common characteristics, I’ve put together 5 different friends for you to meet.
And without further ado meet:
Irrational Irwin: Irrational Irwin is an overly emotional investor, who thinks whenever the market or his accounts go down, it is a direct ATTACK on him. Because of these emotions, he will always sell at the bottom and buy at the top. Irwin is always afraid he will lose all his money while also being concerned he will miss out on all the stock market returns. These irrational and emotional concerns make him bounce in and out of the markets constantly. Every investor has emotions, and most of those who reach their financial goals, tend to keep their emotions at bay when making decisions with their money.
Aggressive Amy: For Aggressive Amy there is NEVER have enough risk in her appetite or portfolio. She will lose thousands of dollars and still be ready for more risk. By risk, I mean investing in high flying stocks such as start-ups, trendy companies, and anything where she can make a quick buck. These high flying stocks tend to fly high and sink low…very low. Even after getting it wrong a lot, she will try and try again to invest in the next hot stock or company. Her concern is actually having to save money instead of her already saved money growing. She’d rather try to grow her money quickly than try to spend less and save more. We all need to have a little Amy in us, but to make sure your amount of Amy lines up properly with your risk tolerance and time horizon is critical. Don’t take on more risk than you can afford to lose.
Hoarder Hanna: Hoarder Hanna just loves to keep all her money in the bank or under her mattress. Any type of risk is too much risk in her book, so she’d rather earn nothing or very little on her money than invest it. She may or may not realize her money is depreciating in value every day, week, and month is sits in cash as inflation eats away at it. Her $100,000 in the bank will be worth a lot less in 20 or 30 years. If inflation is 3%, that $100,000 in 30 years will ONLY be worth $41,340. Remember we do need to keep some money in the bank in case of an emergency expense, but remember your financial goals and see if keeping anything more in the bank is worth the possible depreciation. Her main concern is never having enough money, that she will have to move back in with mom and dad or be stuck at a job she hates. She is hoarding because she thinks it increase her chances of financial security, but in the end it might lead to more concerns and challenges.
Do-It-Yourself Dominic: Do-It-Yourself Dominic thinks he is quite the expert on his finances, the markets, and everything in general. Dominic tends to think his performance is better than it actually is, and will never admit it when he is wrong or needs help. Sorry to the male race, but Dominics usually are men. Why do some men find it so hard to ask for help? Anyway, Dominic has been managing his money “just fine” over the years, and is ready to tackle his next goal such as retirement. Once he gets a few questions answered, he can continue monitoring his accounts and spitting out advice to anyone who will listen. While I think it is great to take an active role with your money and investments, it is still important to know when to seek professional advice. So be hands on, while knowing when to admit you need HELP! Dominic is too proud to admit he is wrong or hasn’t been investing well for so many years, that he is afraid to get a professional opinion. It might seem to counter his know it all attitude, but it is really masking his greatest fear of all…that he has failed.
Oblivious Oscar: Oblivious Oscar never quite knows what is going on. BUT he also doesn’t really care to know. He will poke his head out every few years to check in, see how his accounts are doing, and then go back to his resting place. Oscar’s absent mind usually has to do with his fear of dealing with reality. It is too painful to see where he stands with his money, so he’d rather put it off for another time. He will really go MIA when times are tough, and will check in when there is something for him to celebrate and brag about. While I don’t recommend leaving your finances untouched or avoided for years, some people will look every day. Looking on a daily basis can make anyone go crazy, so bring some Oscar into your life if you find yourself obsessed with what the markets are doing. Trust me, the markets don’t check up on you that often nor do they care about you!
You might think you are one of them or a few of them put together, but as our lives change, we might also change which one we relate to. Here is an example, if you are nearing retirement you might go from Oblivious Oscar to Hoarder Hanna because you are more concerned about having enough money than ever before. If you are in college, you might be a Hoarder Hanna, but as you get out and start earning money, you might become Aggressive Amy.
The key to this exercise is to not only identify which one you most relate to, but what is the underlying trait tying you to them? At first you might think you are a Hoarder Hanna because you love keeping a ton of money in the bank, but it is deeper than that. Why do you keep so much money in the bank? Is it because you are afraid of losing it? Are you afraid you will never have enough of it and have to move back in with your parents? Are you concerned that you won’t reach your financial goals?
I hope you got some enjoyment from these characters I’ve created while also opening your eyes up to the different underlying feelings and concerns you may have with money. There will be a quiz to follow to help you identify which traits you may have of each of my friends so stay tuned!
To pre-order my book: Strong Woman Stronger Assets, click below!
Jessica Weaver, CFP®, CDFA™, CFS®
The hypothetical characters presented above are for illustration purposes only and do not represent any actual investor. Any opinions are those of Jessica Weaver and not necessarily those of Raymond James.
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