Your financial personality is the most important thing for you to know, before you attempt to develop a financial plan or an investment strategy, or choose an advisor. Why hire a financial planner or advisor? To help you meet your financial goals, whether those goals are for a secure retirement, a college education for you or your children, buying a house or some other goal that is important to you. Once you have agreed on a financial plan, following the plan will determine whether your goals are met. That's where your financial personality comes in to play. Your personality plays such an important role in determining your goals and how you use and manage your money, that you must know your financial personality, and be in control of it, to reap the rewards of your financial plan and reach your financial goals. Otherwise you may fall short of your goals.

Framing the context of how money is presented and how people connect to it has been an extremely important aspect of my work. A financial plan, a recommended portfolio or asset allocation can be framed around you, taking both your financial and psychological needs into consideration. It has been my experience that if money management is framed to match an individual's style of motivation and thinking, more people would be motivated to continue with desirable programs of change and benefit tremendously from the positive results. This has certainly been our experience with financial advisers and institutions that use our programs and services, as well as with individuals.

I Was My First Client

My pioneering work in the psychology of money dates back to the fall of 1981 when I became my first client. For years I had invested all of my money in real estate and had no liquidity for any emergencies. After taking a number of financial courses, I was ready to diversify my investments and sought out an investment adviser with a major financial institution. Throughout my first meeting with him, I felt he was quick to persuade me to buy the products he was selling. I walked away certain that he really didn't understand how I felt about my money and didn't know me well enough to understand what I really neededÖ the kind of investments that would not only reap profits but would leave me content, secure and comfortable. Of course, I didn't know what to tell him either. In retrospect, I realized my discomfort was due to the fact that he had not really taken the time to get to know meÖ what I was all about, what investments would give me peace of mind. He was not able to match my money style with suitable investments because he did not have a tool that enabled him to understand my money style or give me insight into my true needs. So I set about developing a way for people to become better clients in objectively understanding their true needs, meet their comfort level and invest wisely at the same time. I also wanted to provide advisers with the same objective information to facilitate the most suitable plan or strategy. I developed the MoneymaxÆ Profile and have licensed its use for the past 14 years.

Determining Your Money Style

Before you can begin to understand how to use money, what it is, or how it works, you've got to know where you are in relation to money. What are your attitudes, good or bad, right or wrong, toward money? How are you using money now? What fears and insecurities do you have about money? In what ways do you handle money well?You have developed a money style just as you have developed a style of interacting socially and a style of thinking and learning. Your money style defines the amount of money you will continue to make until you change your patterns. Whenever you learn a new process, you have to determine your current skill level. After you become aware of your present behavior and thinking patterns about money, you can then begin to develop a new money management strategy.

Mastering Your Money Style

Before you can learn to manage money successfully, you need to reprogram your money life so that you can gain insight into how you can make your money and your life pay off for you. Getting the most out of your money depends entirely on you - who you are, what you want and how far you are from where you want to be.

It is important to take a hard look at how you perceive money. Successful investors are usually in control of their emotions and make decisions based on facts, and the sense they make of their feelings. Psychological research tells us that behavior shapes attitudes, just as attitudes shape behavior. If your behaviors are positive and productive, then your attitudes will be positive. Positive attitudes will, in turn, affect further productive behavior. Obviously, negative and counterproductive attitudes and behavior also follow the same cycle. When it comes to money, investing is an interaction between an individual and their money. So, you can't leave you, the individual, out of the equation. Make a plan that you have fully bought into, psychologically as well as financially, in order to maintain the plan through difficult emotional times. If you do this, you increase your chances of successfully meeting your goals and enjoying the ride.

So whether you chose to hire a financial planner or advisor, or "go it alone," knowing your financial personality can make all the difference between achieving the financial success you desire or feeling out of control of your financial destiny. Your financial future is in your hands.