In my business of giving people insight into their financial behavior, I see very different approaches to life planning with very different results. Despite those differences in perspectives, they all benefit from receiving objective feedback in what they’re doing and how they would profit from incorporating another point of view.

This is a description about two very different ways of thinking about and living life. The first is what you might call the “well-planned life”, the life with purpose defined and measured by high achievement, goal-orientation and completion. This life has been described by many experts particularly in college commencement addresses. At one such address reported in the Harvard Business Review a couple of years ago, Clayton Christensen, a Harvard professor, advised students to create a purposeful and well-planned life strategy early on and stick to it so that their life would be reflective of what mattered most.

For Christensen, a high achiever, life planning had been a struggle with reaching the balance between focusing on achievement of goals and spending time on less well-defined goal achievements as family and friends which don’t reveal concrete and immediate results. He gave examples of his peers who achieved great success in business but fell short in their social and personal lives with high rates of divorce and alienation from friends and family. Certainly, their new year’s resolutions would never have included such failures and discontent in those aspects of life. But, as Christensen notes, people with a high need for achievement commonly misallocate their resources favoring concrete measures such as money and career advancement.

So, if you’re a “resolver”, you’ll want to think about a more expansive plan for making your new year’s resolutions and more general life plan to include those personal and social aspects of your life that you may short-change by habit. You’ll want to jump out of your skin and experiment with a very different way of thinking and approaching life planning which will undoubtedly be initially uncomfortable.

The second way of thinking about life and how to approach it might be called the “reactive life”. This mode of thinking starts from an entirely different perspective—life-planning is not a project to be completed with a check list of objectives to be achieved, but rather an unknown destination to be explored. The belief is that, in reality, there is no way of knowing and predicting the best plan for a purposeful life or new year as external factors are unknown. These factors will play a significant role in dictating appropriate solutions to choices that may crop up.

“Reactors” scoff at regimented plans with objectives, structure and a fixed focus on purpose and goal achievement. They approach their life-planning with a set of ideals and values as a pre-cursor or filter by which they then make current decisions in how to achieve those ideals in allocating their time, talents and resources.

It’s easy from a distance to see the benefits of each perspective, but people often don’t have that ability to perceive themselves and their actions in a meaningful way while playing out their mind set and life orientation. So, it would seem a plan incorporating a balance of the two would be most advantageous.

As Americans, it’s not easy if you’re a “resolver” to deviate as we are reinforced for our concrete high achievement just as it’s a challenge to be a “reactor” following a less-defined plan in a nation of high achievers who are motivated by more concrete measures of achievement.

We have to break through those barriers and know that our goal can be balance. Once you’ve come up with and live according to your more balanced purposeful plan, life appears to unfold as a well-designed project, well-conceived from the start and adjusted along the way toward a well-balanced fruition.

Holidays pull on our heart strings in a powerful way because of all the memories they hold. With each holiday, we anticipate and search for an emotional replay of the special sentiments they evoke. We can be fooled in trying to bootleg these feelings through buying gifts, but they so often fall short of giving us or others what we all seek most; i.e. a connection to what made us feel connected and a special part of our family and friends.
The emotional equivalent is best achieved by re-enacting, recreating and sharing some of the special memories and activities that made the holidays so joyful. We all crave the special rituals that made life better, brighter and more meaningful particularly in these challenging economic times.
To make sure that we celebrate this holiday season in the most fulfilling way and with the appropriate spirit, each of us can do some soul-searching of holidays past and holidays yet to come that would be enriching. Spend some time thinking about what this holiday would look like in your mind’s eye if it made you and meaningful others feel joyful.
So, in this holiday season, let’s give thanks to our will to help ourselves live with grace and gratitude for what’s possible and act today to assure that we continue to receive life’s blessings and share them with our most precious loved ones.

On October 19, 1987 (24 years ago today), known as Black Monday on Wall Street, the Dow Jones industrial average plummeted 508 points, an amazing drop of 22.6 percent. Approximately $500 billion in paper value was lost. Even though only 20 percent of Americans invested in the stock market at that time, the crash had a rippling effect that impacted on everything from consumer spending to pension plans.

Americans seemed remarkably calm and showed surprising unconcern. According to a Newsweek poll taken right after the crash, 61 percent of those surveyed said the crash did not necessarily indicate a serious downward economic trend, and 63 percent said the decline in stock prices might help the economy in the long run forcing the government to face up to economic problems.

Likewise, a Los Angeles Times poll found that 64 percent of Americans thought the odds were better than fifty-fifty against a recession. The Times poll also found that stockholders who lost money in the crash were not discouraged about the stock market. According to the poll: 69 percent of the stock market losers said they do not plan to change the level of their stock investing, and only 12 percent plan to cut back.

Why such confidence in the face of loss? Psychologically, when we make a commitment to something—e.g., the stock market—we tend to rationalize any conflicting information and avoid behavior that would alter the commitment. We are all creatures of habit. In addition, some of the investors—those that did not sell their stocks immediately and impulsively—may have felt a momentary psychological loss but maintained their position, never incurred a financial loss and actually saw a great financial gain. As a result, the stock market, which had such allure for many Americans, continued to hold its magical luster even in the face of such a significant economic crisis.

The Great Recession certainly has had a longer-lasting effect for not only stock holders but for most Americans who sit on the sidelines. The incredible rebound experienced after “Black Monday” only strengthened the allure of Wall Street but the long-lasting aftermath of the Great Recession has left American investors searching for the crystal ball to reveal whether the stock market is still the answer to money growth and ultimately their financial security. They no longer trust or believe in “money magic” on Wall Street.

Americans have traditionally succeeded through determination and applying their energy to excel toward achieving their objectives. They’ve been rewarded with a sense of a quality of life for themselves and loved ones. They could see and feel a direct link between their efforts and their achievements. That link is lost and with it they lost a sense of themselves and confidence that their efforts would pay off.

As Douglas Rushkoff stated in his article, http://www.cnn.com/2011/10/05/opinion/rushkoff-occupy-wall-street/index.html stated “…the members of Occupy Wall Street may be as unwieldy, paradoxical, and inconsistent as those of us living in the real world. But that is precisely why their new approach to protest is more applicable, sustainable and actionable than what passes for politics today. They are suggesting that the fiscal operating system on which we are attempting to run our economy is no longer appropriate to the task. They mean to show that there is an inappropriate and correctable disconnect between the abundance America produces and the scarcity its markets manufacture.”

I’ve also been a bit mystified that many are criticizing the rallies and demanding an agenda, consensus and specific goals. No, it is certainly not a traditional protest but rather seems to be people coming together in a creative way to try to get some sense of connection. It must be gratifying that they can still make an impact and have some sense of control over their current condition. Eventually, I believe they’ll begin to make sense of their conversations and connect the dots but right now I believe this rally is a great release of pent-up frustration and a means to jointly combat feelings of helplessness, hopelessness and even depression.

As a psychologist, I have listened to people coming out of a personal state of depression who have described their new sense of themselves in similar ways that the protestors are revealing in their signs with slogans such as “we are the 99%–we were asleep and now we woke up”; “money talks too much”; “you’re not listening”; “enough”.

A good therapist understands that expressing feelings early on in the healing process is extremely cathartic and helps tremendously in the rehabilitation process. A good therapist also understands the critical role that an objective and active listener plays in tracking, conceptualizing and summing up so that the feelings can be shaped and framed positively in formulating suitable solutions.

These rallies can also progress from venting of feelings to fact-gathering and formulating suitable solutions. The process can follow that of a successful mental health intervention from feelings first, interpretation through active listening and framing suitable solutions so needs are heard and met. If the rallies are successful, the process of healing will be interactive and include not only the venting of a great sense of betrayal but the active listening and formulation of ideas and strategies to meet their needs and wants.

The people I spoke with had haunting memories of that day which included knowing exactly where they were and how they felt. A common reaction was “apocalypse”, a feeling that the world as we know it was coming to an end, tremendous sorrow and paralyzing fear.

The powerful impact of fear is what played out in their descriptions of how their lives have changed living thousands of miles from the US shores. I was reminded of fear’s powerful potential and often realized crippling effect on how we live our lives.

For many it’s the fear of traveling far from home; the fear of loss which prevents gain; the fear of being powerless and destitute. As a psychologist who has focused on the impact of fear on financial lives, it plays out as a self-fulfilling prophesy too often inhibiting initiative, taking risks and being pro-active with the money we earn and save.

We have to admire those that push through their fears and act in spite of feeling traumatized and immobilized by fear. It never ceases to amaze me in seeing how “taking action” despite a lack of confidence, sense of dread or worry can be the magic antidote for an otherwise crippling condition.

For me, the memory of 9-11 will be a symbol of that courage to act with a sense of conviction and courage to face fear that often translates into a sense of confidence, empowerment, and sense of fulfillment. If we don’t face it and act in spite of it, we become powerless in so many areas of our lives and feel a sense of void and pessimism instead of fulfillment and hope.

So, living our most fulfilled life may be letting go of fear.

Money talks can be positive, productive and profitable.

When the market is going up, couples rarely find that they disagree, but it’s during times like these with the market in such flux that couples find their relationship in a similarly erratic state. Anxiety and fear take their toll in driving a wedge between partners that can become impenetrable and impossible to bypass.

Some couples describe feeling frustrated, angry, and even explosive in trying to work through their current levels of stress with these markets. They have a hard time making themselves heard and understood. A typical conversation may go like this: She “I want to sell our stocks now before we lose any more money; He “If we sell now, we will lose money so I’m not making any moves until I feel things are back to normal.” She “What’s back to normal?”; He “I don’t know—I’ll just know it”. She “I can’t understand you. You’re not making any sense.”

In couples, one usually has or assumes a major role in investing and managing the money. In times like this, that task and role can bring about serious discord about losses sustained in the couple’s investment portfolio.

When the investment management task is shared, or when the responsible manager shares decisions about how and why investments are made, changed and redistributed, the arguments are generally resolved before they begin. So it is with most of the money issues in a couples life. Sharing decisions, information and desires can be a blessing without end. But not doing so can be the end of the relationship!

Some couples say it’s easier when they are similar in personalities and mind set and this is mostly true as it’s easier to relate to someone who sees life in similar ways. But it too presents challenges for the couple because they might not see the other point of view being blind to a different way of perceiving the situation. So, there’s nobody watching their back and portfolio.

Miscommunication, lack of communication, misunderstanding and lack of understanding will always create havoc in relationships. The ability to talk, understand, respect and empathize with a partner’s sentiments is certainly a challenge in times of uncertainty, but the ingredients are essential in establishing and maintaining compatibility and a loving relationship.

So, regardless of similarities and differences, compatibility in money management and investing is dependent on partners stepping outside of their opinions and need to be right and stepping into the mind set of their partner. The world, including the world of investing, will look and feel very different. This is the first step in a winning and compatible strategy—not only for investing in challenging times but for successful money management in life planning.

Not everyone can tolerate a prolonged roller coaster ride and some will want out.  The majority of investors would rather avoid such risk, volatility and uncertainty.

There are some basic tenets of psychology that help to explain investor behavior in these uncertain times.  When we’re afraid, we are prone to stick to a group with whom we relate—others who hold similar values and interests.  Threat sensitivity depends on how we see or perceive our world including the market.

People who are more “threat sensitive” see the investing world as a more dangerous place and are more fearful of losses so they become driven by their fear.  We often refer to the “herd mentality” to describe how these investors react to the market.

In general, investors are held captive by unpredictable yet frightening events—they become traumatized and experience a state of panic as a result of their unbridled fear.

It’s how investors cope and learn to tolerate this sense of fear that predicts whether they will panic and want out or be able to maintain their strategy and stay the course if it is still appropriate for these times and their situation.

Being able to understand how a current market situation compares to past historical events can be very helpful in giving investors a proper perspective of what they might expect.  There have been numerous crises that investors have weathered successfully if they reacted reasonably and could manage their emotional reactions and maintain their strategy for the long-term.

Both my research into the attitudes and feelings that drive money management and investment behavior, and my work with investors and investment advisers tell me the following things:

• Successful investors are in control of their emotions and are more likely to act on facts as opposed to feelings.

• It is possible to learn successful investing just as it is possible to learn most other forms of appropriate business behavior.  The first step is being self-aware; the second is to be self-confident; and finally self-motivated and responsible.

As you evaluate your current situation and feelings about the current market conditions of uncertainty, consider these points:

• Investors are more prone to make or lose money as a function of their emotions and attitudes than on the basis of their stock selection or trading system.

• The best system can be rendered a losing proposition by inappropriate implementation due to emotional and behavioral limitations.

• Appropriate or successful investor behavior can be learned to a large extent.

• Education is essential to helping investors stay in control and continue to grow, particularly in learning self-regulation and self-control.

In other words, there is a vast world of emotion under the surface structure of investing.  To know and understand the motivating forces behind investing, to know and understand why one investor becomes tense about losses, why one becomes greedy about profits, and why one either overreacts or fails to react is, perhaps, more than half the investment battle won.  There is a high price to pay for the kind of innocence many investors bring to their investments and even the way they interact with their investment advisors.  In many cases, for investors to continue to maximize their financial returns, they must first learn to master their emotions.