Leveraging Your Financial Intelligence Read online

  As financial advisors, leaders, and business coaches, we have been fortunate to inspire thousands of people to live their best lives at the intersection of money, health, and happiness. Our aim in this book is to help you do the same.

  NOTES

  1 EDUCO, http://www.educoworld.com/.

  2 Sonja Lyubomirsky, The Myths of Happiness: What Should Make You Happy but Doesn't. What Shouldn't Make You Happy but Does. New York: Penguin, 2014.

  3 Kahneman, D., & Deaton, A. (2010). “High Income Improves Evaluation of Life but Not Emotional Well-Being,” PNAS, 107, 16489–93.

  4 Luhmann, M., Schimmack, U., & Eid, M. (2011). “Stability and Variability in the Relationship between Subjective Well-Being and Income,” Journal of Research in Personality, 45, 186–97.

  5 Jamie Hale, M.S. “What Makes Us Happy?” Psych Central, https://psychcentral.com/lib/what-makes-us-happy/.

  6 Daniel Kahneman and Angus Deaton, “High Income Improves Evaluation of Life but Not Emotional Well-Being,” Proceedings of the National Academy of Sciences of the United States of America, 2010. Accessed at: http://www.pnas.org/content/107/38/16489. Retrieved June 1, 2017.

  7 Doug Short, “Happiness Revisited: A Household Income of $75K?” Advisor Perspectives, 2016, https://www.advisorperspectives.com/dshort/commentaries/2016/10/21/happiness-revisited-a-household-income-of-75K. Retrieved June 1, 2017.

  8 Quoted in Dan Buettner, Thrive: Finding Happiness the Blue Zones Way (Washington, D.C.: National Geographic Society, 2011), p. 16.

  9 Sophie Bethune, “Money Stress Weighs on Americans' Health,” American Psychological Association, 2015, Vol. 46, No. 4, print version: page 38, http://www.apa.org/monitor/2015/04/money-stress.aspx, retrieved February 13, 2017.

  10 “2017 Employee Financial Wellness Survey,” PwC, April 2017, https://www.pwc.com/us/en/private-company-services/publications/financial-well-being-retirement-survey.html, retrieved July 28, 2017.

  11 Greg DePersio, “The Worst Financial Problems Ultra-High-Net-Worth-Individuals (UHNWIs) Face,” Investopedia, 2015, http://www.investopedia.com/articles/personal-finance/111915/worst-financial-problems-ultrahighnetworthindividuals-uhnwis-face.asp. Retrieved June 1, 2017.

  12 John Dakin and Richard Wampler, “Money Doesn't Buy Happiness, but It Helps: Marital Satisfaction, Psychological Distress, and Demographic Differences Between Low- and Middle-Income Clinic Couples,” The American Journal of Family Therapy, 36:300–311, 2008.

  13 Ibid.

  14 Kristen Kuchar, “The Emotional Effects of Debt,” The Simple Dollar, http://www.thesimpledollar.com/the-emotional-effects-of-debt.

  15 Maggie McGrath, “63% of Americans Don't Have Enough Savings to Cover a $500 Emergency,” Forbes, January 6, 2016, https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-americans-dont-have-enough-savings-to-cover-a-500-emergency/#507f71bb4e0d.

  16 “2017 Employee Financial Wellness Survey,” PwC, April 2017, https://www.pwc.com/us/en/private-company-services/publications/financial-well-being-retirement-survey.html, retrieved July 28, 2017.

  17 Conversation between Dr. Helen Riess, Doug Lennick, and Ryan Goulart, August 7, 2014.

  18 Sandro Galea, “Income and Health, Part 1,” Boston University School of Public Health, December 4, 2016, https://www.bu.edu/sph/2016/12/04/income-and-health-part-1/.

  19 “The State of the World's Children 2016: A Fair Chance for Every Child,” UNICEF, June 2016, https://www.unicef.org/publications/files/UNICEF_SOWC_2016.pdf.

  20 Summary Health Statistics for the U.S. Population: National Health Interview Survey, 2011, U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, Series 10, Number 255, December 2011, https://www.cdc.gov/nchs/data/series/sr_10/sr10_255.pdf.

  21 Sophie Bethune, “Money Stress Weighs on Americans' Health,” American Psychological Association, 2015, Vol 46, No. 4, print version: page 38, http://www.apa.org/monitor/2015/04/money-stress.aspx.

  22 “Laura Choi, “Financial Stress and Its Physical Effects on Individuals and Communities,” Federal Reserve Bank of San Francisco Community Development Investment Review, December 2009, https://core.ac.uk/download/pdf/6223933.pdf.

  23 Noah Smith, “Another Reason to Fight Opioid Addiction: Economics,” Bloomberg.com, March 3, 2017, https://www.bloomberg.com/view/articles/2017-03-03/another-reason-to-fight-opioid-addiction-economics.

  24 TD Bank Fiscal Fit Survey, 2015, http://tdfiscalfitness.com/.

  25 “Financial and Physical Well-Being Go Hand-in-Hand for a Majority of Americans, New Survey Finds,” TD Bank, January 26, 2015, https://mediaroom.tdbank.com/2015-01-26-Financial-and-Physical-Well-Being-Go-Hand-in-Hand-for-a-Majority-of-Americans-New-Survey-Finds.

  26 Rebecca Smithers, “Happiness Linked to Financial Planning, Research Shows,” The Guardian, June 16, 2010, https://www.theguardian.com/money/2010/jun/16/happiness-financial-planning-aviva.

  27 As quoted in “Financial and Physical Well-Being Go Hand-in-Hand for a Majority of Americans, New Survey Finds,” TD Bank, January 26, 2015, https://mediaroom.tdbank.com/2015-01-26-Financial-and-Physical-Well-Being-Go-Hand-in-Hand-for-a-Majority-of-Americans-New-Survey-Finds.

  28 Brett Arends, “A Full Night's Sleep Can Really Pay Off—in Salary and Investments,” Wall Street Journal, September 18, 2014, https://www.wsj.com/articles/a-full-nights-sleep-can-really-pay-offin-salary-and-investments-1411056919.

  29 Victor Lipman, “New Study Links Exercise to Higher Pay,” Forbes, June 8, 2012, https://www.forbes.com/sites/victorlipman/2012/06/08/new-study-links-exercise-to-higher-pay/#697b4c405db6.

  30 Sara Rimer and Madeline Drexler, “Happiness and Health: The Biology of Emotion—and What It May Teach Us about Helping People to Live Longer.” Harvard T.H. Chan School of Public Health (2011), https://www.hsph.harvard.edu/news/magazine/happiness-stress-heart-disease.

  31 Karina W. Davidson, Elizabeth Mostofsky, and William Whang, “Don't Worry, Be Happy: Positive Affect and Reduced 10-Year Incident Coronary Heart Disease: The Canadian Nova Scotia Health Survey,” European Heart Journal, 2010 May; 31(9): 1065–1070.

  Chapter Two

  Living in Alignment

  Happiness is when what you think, what you say, and what you do are in harmony.

  —Mahatma Gandhi

  It was 5:30 AM on a wintry Boston morning. Fifty seven-year-old Eileen Kelly* hit the top of her alarm clock, feeling an instant rush of dread. Fifteen minutes later, stepping out of the shower, she glanced at her reflection in the bathroom mirror and grimaced at the bags under her eyes. “I'm really getting old,” she thought. Eileen was tired of the daily grind: Shake off her sluggishness and get herself out the door on time. Deal with the stress of a rush-hour commute. Manage the demands of a long day as a nurse anesthetist1 at an outpatient surgery center. Drive home, heat up a frozen dinner, drink a glass of wine—sometimes two or three. Watch TV, brush her teeth. Then lights out on another lackluster day.

  Eileen's life hadn't always felt like this. She used to enjoy the challenges of her job and the camaraderie of the surgery center. But over the last few years, work that had once seemed invigorating now seemed routine and boring. Work friends were beginning to retire, and she didn't have much in common with the young professionals who were replacing them.

  Eileen also used to enjoy going out with friends to plays and concerts, but since her divorce a few years ago, Eileen noticed she was being left out of gatherings with her married friends. Other friends had retired and relocated to warmer climes. Eileen loved spending time with her son and his family, but she didn't get to see them very often since he'd taken a job on the West Coast. As if that wasn't hard enough, Eileen's dog, Daisy, had recently died, and she found it hard to keep up her regular neighborhood walks without her faithful companion by her side.

  Feeling lonely, Eileen tried joining a women's group at her church and a book club, but their members seemed to have their own cliques, so after a while she gave up on trying to socialize, and settled into a more solitary routine.
Eileen discovered that she enjoyed collecting—mostly vintage dishes, glassware, and silverware that reminded her of her grandmother's house growing up. She started scouring weekend yard sales and flea markets in search of treasures. Eileen also spent increasing amounts of time watching shopping channels. She enjoyed the banter of the people selling products and their chatty conversations with happy customers. Eileen finally felt part of a community—the TV shopping community. Before long, Eileen was buying clothing and jewelry from QVC and HSN several times a week, dipping into her savings account to cover her compulsive spending.

  Then one morning, Eileen woke up to a different kind of alarm. Breathless, nauseous, and suffering abdominal pain, Eileen called 911, and was rushed to the hospital. Fortunately, Eileen had not had a heart attack, but she was at high risk for one. She was diagnosed with pancreatitis and Type 2 diabetes, either of which can be life threatening. Her medical history and lab work provided some clues about her “sudden” illness. It turned out that in the last year, Eileen had gained 20 pounds and her blood pressure had become quite high. Her blood glucose level, a marker for diabetes, was also very high. In one year, Eileen's cholesterol level had jumped from normal to high. Her liver enzymes were abnormal, suggesting she might be drinking too much alcohol, or at a minimum, that her weight gain had led to a dangerous condition called “fatty liver.” Eileen's primary care doctor visited her the night before she was released from the hospital. She reviewed Eileen's chart, pulled up a chair beside her patient's bed, and gently asked, “Eileen, what's going on with you?” “I don't know,” Eileen said, tearing up. “All I know is I hate waking up in the morning.”

  THE ALIGNMENT MODEL

  In a few short years, Eileen had lost a lot—her marriage, social connections, enthusiasm for work, savings—and now her health. Eileen no doubt valued family, fitness, social relationships, financial security, and interesting, well-paying work. But because Eileen lost the will to act consistently with those values, she allowed herself to become victim to a vicious cycle of misfortunes. For Eileen, the intersection of money, health, and happiness had become a crash scene. Landing in the hospital was quite a wake-up call. She knew bad health was just one of her problems. Eileen decided she would do whatever it took to get her life back. Eileen felt overwhelmed, so at her doctor's suggestion, she began to work with a life coach who taught her an approach called the “alignment model.”

  Your Life in Three Frames

  If you want to maintain or improve your life satisfaction, it's useful to align who you really are with who you would like to be ideally. When you're in alignment, you feel good—you're happier, healthier, and more financially fit. So begin by visualizing your life in three frames: your ideal self (including your principles, values, and beliefs), your goals (including your purpose, goals, and wants), and your behavior (including your thoughts, emotions, and actions.).

  Together, these three frames represent the alignment model (Figure 2.1). Alignment happens when each frame is consistent with the others. You are in alignment when the way you behave is consistent with the goals you've set for your life, and when the goals you've set are consistent with what you value most for your life. The power of the alignment model is that it will help you make the best possible life choices and achieve the greatest satisfaction in all dimensions of your life. Eileen took an important step toward living in alignment when she acknowledged that she needed help and made the commitment to work with a coach to identify her life goals and act to achieve them.

  FIGURE 2.1 ALIGNMENT MODEL

  Living in alignment is an ideal. It represents the person we would like to be at our best. Living in alignment may sometimes be difficult, but it doesn't require superhuman acts. It is about the day-to day steps we take to do what's needed to reach our goals. Living in alignment is also not accidental. It requires doing things on purpose and for a purpose. Living in alignment is a two-part process. First, you build your own personal alignment model by understanding what's inside of these three frames:

  Ideal Self—Moral Compass: What are your most important principles and values?

  Goals—What do you want to accomplish, personally and professionally?

  Real Self—Behavior: What decisions will you make and what concrete actions will you take to achieve your goals? (thoughts, emotions, actions)

  Then, once you've built your own alignment model and know what should be in each frame, you work consciously and consistently to maintain alignment among your frames—simple, but as you might already suspect, far from easy.

  IDEAL SELF

  Your ideal self includes the core moral principles and values that are the foundation of who you would ideally like to be as a productive and fulfilled human being. Principles and values overlap. Principles are fundamental beliefs that have been embedded in human society for so long that they are now widely recognized as universal. Values, on the other hand, tend to be an expression of what's important to us individually. The values that matter most to you can be quite different from the values that matter most to someone else.

  In Doug's previous book, Moral Intelligence, he and co-author Fred Kiel surveyed the research on universal principles and identified four primary principles held in common globally:

  Integrity

  Responsibility

  Compassion

  Forgiveness

  What do these principles really mean in practice? We follow these principles with the help of several moral competencies, or skills, that define each principle.

  Integrity means: acting consistently with principles, values, and beliefs, telling the truth, standing up for what is right, and keeping promises.

  Responsibility includes: taking responsibility for personal choices, admitting mistakes and failures, and embracing responsibility for serving others.

  The essence of Compassion is actively caring about others.

  Finally, we demonstrate Forgiveness by letting go of one's own mistakes, and letting go of others' mistakes.

  It's no coincidence that people who enjoy high levels of financial, physical, and emotional well-being all seem to place high importance on living in alignment with principles. They listen carefully to the call of moral principles that already lie within all of us.

  RESPONSIBILITY

  All four principles—integrity, responsibility, compassion, and forgiveness—are important, but the principle of responsibility is key to overall well-being. Here is a secret that the happiest people have discovered. Responsibility is their guiding principle. They know that they are in charge. They know it's up to them to make sound decisions about finances, health, and overall well-being. For example, each of us is completely responsible for our financial well-being. This doesn't mean that each of us is responsible for becoming wealthy. But we are responsible for becoming financially independent, that is, not dependent on others for our financial health. We may never earn enough money so that work becomes optional, but we are responsible for making plans and choices that allow us to thrive, regardless of how much or little money we have. Consider this example of financial responsibility: Gallup polling conducted at the end of 2008 during a historic recession found that while only 36 percent of all Americans at the time felt that they were “thriving,” almost 30 percent of the poorest Americans, those living on less than $24,000 a year, also described themselves as “thriving.” According to Gallup at the time, “While the lowest-income Americans are still those most likely to be struggling, they did not see the stark increase in struggling in the first two weeks of November [2008] that those making over $24,000 did.” What explains the difference between people who, despite their low incomes, still felt that they were thriving, while so many people earning three to four times as much reported that they were struggling? Fortunately we haven't had another recession since then, but if this was true during a period of great economic turmoil, it's probably just as true now. Clearly, it's not about how much you earn. It is about your attitude about your life.

  Resp
onsibility is also key to our physical well-being. Though we don't have complete control over the state of our health, we are responsible for the choices we make that affect our health. For most diseases, lifestyle choices are far more important than genetics in determining whether we develop that disease. As an example, recent research shows that even people with a high inherited risk of heart disease can cut that risk by more than half by exercising, losing weight, and quitting smoking.2

  Finally, we are responsible for our overall sense of personal well-being. As emphasized in the previous chapter, happiness is not something that just happens to us. We can and should take actions to increase our happiness, no matter what our external circumstances are.

  DOUG'S STORY

  I got a promotion in 1983 that came fully equipped with a $100,000 pay cut. I had not fully paid off my 1982 taxes, but needed money to invest in my new business opportunity, so I made a poor decision not to pay my taxes on time. Instead I used my money to get launched. Among other expenses, my new job required that I furnish the office. At the same time, I was transitioning from working as an independent contractor to becoming a W2 employee, so I was making less money and my cash flow was worse. To complicate the situation further, I owed monthly child support payments which were based on my previous income. I made a point never to miss those payments, no matter how much I had to scrimp. But my own household suffered. And I still owed back taxes. I thought I had a payment arrangement with the IRS, but I found out later I was mistaken. One evening I came home to my beautiful pregnant wife, Beth Ann, and a dark house. The electricity and water had been shut off. The IRS had garnished my wages. I wasn't getting any paychecks. And I had no immediate way to pay our bills. That's when I knew that happiness is a state of mind, not a state of affairs—because my circumstances were miserable, but I wasn't miserable. It might have been tempting to jump out a second-story window. Instead, I maintained a sense of well-being while I worked to dig us out of a financial mess. I believe my ability to stay happy when things were difficult helped me get our family back on a firm financial footing as quickly as possible.