Why You Can’t Think Through Financial Decisions
Did you know that conscious thinking drives only 5% of your financial decision making?
Over the years of working through financial pivots with our clients, we’ve learned NOT to assume that our client’s decisions are being made based on rational thought. You may be shocked to find out that thinking through big financial decisions may actually be a waste of time. It is actually pretty unlikely that “thinking through things” is going to factor into the equation a whole heck of a lot.
This is because a person’s Money Personality, or Financial Personality, is made up of primarily unchanging, hardwired, natural behaviors that they are born with. In fact, research shows that 95% of our financial decision making comes from instinctive, Natural DNA Behavior. Natural DNA Behavior drives how we regularly and consistently respond to different events.
The other 5%? That is made up of the Learned Behaviors which are shaped from conscious thinking. Conscious thinking is based on factors like our experiences, education and values.
When we first sit down together to do our Team Duncan Discovery Experience, Eric and I will, most likely, experience a couple or individual through the lens of the 5%, or learned behaviors. If you think about it, most first impressions are thought-out, often calculated and intentional…we want to sound informed, experienced and smart.
The problems may come later down the road. When the Financial Life Plan is in place and clients reach inflection points or big pivots in their lives…when the key financial decisions need to be made… they will revert to their natural behavior style under this pressure. Long story short, the result is that our cognitive biases will then take over, which we’ve seen lead to imperfect decision making and failure to adhere to their Financial Life Plan, time and again.
This is why our co-created, Financial Life Plans are built on a deeper understanding of couple’s Financial Personality. Once each client’s Natural DNA Behavioral Style is explored, we are better equipped to help clients manage their emotions and can communicate the likely consequences of their decisions in a much clearer way. So much can be learned through shining the light of awareness on how we react during times of pressure and stress. This helps us to truly guide and facilitate better financial outcomes for our clients.
We encourage you to explore your Money Personality with us so that we can start a constructive conversation about reaching your inspired goals. You can access the free assessment at: www.teamduncanplan.com. You may also reach out to Eric or me to schedule a time to come in for complimentary Discovery Experience to discuss the results of the Money Personality assessment and learn how further exploration into your Financial DNA may improve the results of your Financial Life Plan
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