1. Ego and irrational decisions are causing many people to go broke as they try to keep up with others and make emotional spending choices.
2. People make irrational financial decisions despite facts, such as not taking advantage of employer 401k matches or holding investments too long. They are overly influenced by emotions.
3. A lack of ongoing financial education contributes to poor choices, as people assume some college education is enough. However, personal finance is complex and requires continuous learning to understand benefits, contracts, and make wise decisions.
2. THE CONTENT IS DEVELOPED FROM SOURCES BELIEVED TO BE PROVIDING ACCURATE INFORMATION. THE INFORMATION IN THIS MATERIAL IS NOT INTENDED AS
TAX OR LEGAL ADVICE. IT MAY NOT BE USED FOR THE PURPOSE OF AVOIDING ANY FEDERAL TAX PENALTIES. PLEASE CONSULT LEGAL OR TAX PROFESSIONALS
FOR SPECIFIC INFORMATION REGARDING YOUR INDIVIDUAL SITUATION. THIS MATERIAL WAS DEVELOPED AND PRODUCED BY HELLO MY NAME IS, LLC TO PROVIDE
INFORMATION ON A TOPIC THAT MAY BE ON INTEREST. THE OPINIONS EXPRESSED AND MATERIAL PROVIDED ARE FOR GENERAL INFORMATION, AND SHOULD NOT
BE CONSIDERED A SOLICITATION FOR THE PURCHASE OR SALE OF ANY SECURITY. COPYRIGHT 2014 HELLO MY NAME IS, LLC.
Here’s Why Your Friends Are
Going Broke
Sincenobodywearstheirnetworthpinnedtotheirchest,we
trulyhavenoinklingwhatourneighborsrealpersonalfinancial
situationisatanygivenpointandtime.Whatwepromiseyouto
betrueisthatwhatappearstobeanoceanofsuccessaround
youismerelynothingmorethanamirageofmanypeopleliving
onanobligatorybasistopaytheirbills.Yourfriendswillnever
tellyoutheyaredrowninginquicksand,butpeoplearoundyou
aregoingbrokeeverydayandherearethereasonswhy.
Youregoissomethingthatcanmakeyoustrongerorbecomean
insurmountableobstacletoachievingsuccess.Remember,youregois
thepartofyourmindthatcontainsmemory.Itisultimatelywhatshapes
yourplanningandyourreality.Whenitcomestomoney,egoisoneof
thosedriversthatmakepeopleyouknowbroke.Thisdoesn’tmeanthat
theyarelivingoutinatrailerpark,butitdoesmeanthattheyarefulfilled
bykeepingupwiththeJones’andeatingoutatthelatestandgreatest
restaurant.Howwillyouregoreactwhenyourneighborbuysanew
RangeRover?Orputsinanewpoolintheirbackyard?Ortakesa10day
vacationcomeChristmastimeintheBritishVirginIslands?
ostofthetimewhenwetalkaboutpersonalfinance,
topicsincludingcreditcarddebt,savings,investments,
insurance,andcouponscreepintothediscussion.M
1. EGO
Agreatbookis‘PredictablyIrrational’byDanAriely.Thebookhas
somefascinatingstories,butthetruthisthatmostofyourfriendsmake
irrationaldecisionsaroundtheirmoneyinspiteofthefactsinfrontof
them.Somepeopledon’ttakeadvantageofthe‘free’matchfromtheir
401(k)atworkbecausetheydon’tbelievetheycansavemoney.Weare
talkingaboutFREEmoney!Peopledon’t takegainsintheirinvest-
mentsafteragreatrunbecausetheybelievetheirportfoliowillgoup
forever.It’ssimilartobeingattheblackjacktableandthinkingyoucan
beatthedealerforever.They’llconvincethemselvestobuyapooltelling
theirbrainthatthevalueoftheirhousewillgoupwhenallother
statisticssayotherwise.Thisiswhyhavingoutsidecounselissoimpor-
tantwhenmakingbigfinancialdecisions.
2. IRRATIONALITY
Timeisnowthenumberonemoneykillerintoday’ssocietyinouropinion. Thereissomuchinformationcomingattheaverage
consumer,it’sverydifficulttodecipherfactfromfiction.Peopleyouknowwhoarebroke(orgoingbroke)aretooashamedto
askforhelpbecausetheywenttoatoprankedcollegeorhaveanMBAbehindtheirname.Theyjustassumeaquicksearchon
Googlewillhelpthemgetalloftheinformationtheyneed.However,bothpurchasingdecisionsandinvestmentdecisionshave
becomemorecomplex.Benefitsatworkaremoredifficulttounderstand.Creditcardcontractsrequireyoureadthefineprint.
Justbecauseyouarecollegeeducateddoesn’tmeanyouarefinanciallyeducated.Infact,whenwasthelasttimeyoutooka
seriouspersonalfinancecourse?
Therealitybehindallofthisisthatknowinganddoingaretwoverydifferentconcepts.Weallknowweneedtoloseweight,
yetwithoutaprogrammostpeoplefail.Weallknowweneedtoexercise,yetwithoutaweeklyregimenmostofusgetoff
track.Ifyoumeetsomeoneintheir40’sorearly50’sandaskthemwhattheirbiggestworryisinlifetheywon’tsaytheirhealth,
butinsteadthey’llrespond“money”.Ifthat’sthecase,thenwhyaresomanypeoplegoingbrokeandlivingjusttomeetthe
standardoflifethattheyhavebuiltforthemselves?Askyourfriends...thatisiftheyarewillingtoputtheiregoonthetable!
3. EDUCATION
__________________________
-------
-------
-------
--------------------------------------------------------------------------