Overview of analogies between personal energy level (happiness) and financial wealth, and how both can be understood in terms of the same basic model.

1. FINANCIALFINANCIAL
WELLNESSWELLNESS
EMOTIONALEMOTIONAL
WEALTHWEALTH
Understanding and Mastering the Economics ofUnderstanding and Mastering the Economics of
Emotional & Financial WellnessEmotional & Financial Wellness
National Wellness Conference, July 2005National Wellness Conference, July 2005
William G. DeFoore, Ph.D.William G. DeFoore, Ph.D.
Institute for Personal & Professional Development, goodfinding.comInstitute for Personal & Professional Development, goodfinding.com

2. II
EE
AA LL
II
EE
AA LL
THETHE
MOSTMOST
NEGLECTEDNEGLECTED
ASPECTSASPECTS
OF HEALTHOF HEALTH
AND WELLNESS:AND WELLNESS:
Emotional IntelligenceEmotional Intelligence
AndAnd
Financial IntelligenceFinancial Intelligence

3. 1.1.Models ofModels of financial wellnessfinancial wellness
2.2.““Cash Flow Quadrants”Cash Flow Quadrants”
3.3.TheThe “Economics of Emotion”“Economics of Emotion”
4.4.Implications for health, joy andImplications for health, joy and
fulfillment of life purposefulfillment of life purpose
OVERVIEWOVERVIEW
II
EE
AA LL

4. 1.1.DepletionDepletion
2.2.Break-evenBreak-even
3.3.ContributingContributing
4.4.““Financial Freedom”Financial Freedom”
MODELS OFMODELS OF
FINANCIALFINANCIAL
WELLNESSWELLNESS
II
EE
AA LL

5. THE BASICTHE BASIC
FINANCIAL STATEMENTFINANCIAL STATEMENT
IncomeIncome
AssetsAssets
ExpensesExpenses
LiabilitiesLiabilities
II
EE
AA LL

6. DEPLETION CASH FLOWDEPLETION CASH FLOW
Debt, creditors, survival modeDebt, creditors, survival mode
Expenses exceed IncomeExpenses exceed Income
II
LL
EE
AA

7. BREAK-EVEN CASH FLOWBREAK-EVEN CASH FLOW
Limited Assets, No Real LiabilitiesLimited Assets, No Real Liabilities
II
EE
AA LL
““Hand to Mouth”, “Paycheck to Paycheck”,Hand to Mouth”, “Paycheck to Paycheck”,
Income meets ExpensesIncome meets Expenses

8. ncome exceeds Expenses, Beginning to Build Assetsncome exceeds Expenses, Beginning to Build Assets
Healthy Expenses, Controlled LiabilitiesHealthy Expenses, Controlled Liabilities
II
EE
AA
CONTRIBUTING CASH FLOWCONTRIBUTING CASH FLOW
Getting Ahead, Planning for Future,Getting Ahead, Planning for Future,
Beginning to Build Passive IncomeBeginning to Build Passive Income
LL

9. 1.1. Assets that generate income:Assets that generate income:
a.a. Books, audio/video and original programsBooks, audio/video and original programs
b.b. Real estate (for rental or investment)Real estate (for rental or investment)
c.c. Stocks, bonds, interest bearing accountsStocks, bonds, interest bearing accounts
d.d. Businesses that profit w/out your presenceBusinesses that profit w/out your presence
2.2. Passive income:Passive income:
a.a. Rental incomeRental income
b.b. Profit from real estate salesProfit from real estate sales
c.c. Interest, dividendsInterest, dividends
d.d. Royalties, membership dues, other residualsRoyalties, membership dues, other residuals
e.e. Profit from business ownershipProfit from business ownership
ASSETS &ASSETS &
PASSIVE INCOMEPASSIVE INCOME
II
EE
AA LL

10. Income feeds Assets, Assets feed Income,Income feeds Assets, Assets feed Income,
PASSIVE INCOME EXCEEDS EXPENSES!PASSIVE INCOME EXCEEDS EXPENSES!
II
EE
AA
FINANCIAL FREEDOMFINANCIAL FREEDOM
““Ahead of the Game,” “Out of the Rat Race,”Ahead of the Game,” “Out of the Rat Race,”
““On Top of Things”,On Top of Things”, “Your Money Works for You”“Your Money Works for You”
Excess Cash!Excess Cash!
LL

11. IncomeIncome
ExpensesExpenses
AssetsAssets
(put $ in your pocket)(put $ in your pocket)
LiabilitiesLiabilities
(take $ out of your pocket)(take $ out of your pocket)
Earned IncomeEarned Income______________________
(temporary sources)(temporary sources)
Passive IncomePassive Income______________________
(from assets)(from assets)
Healthy ExpensesHealthy Expenses__________________
(feeds assets)(feeds assets)
Unhealthy ExpensesUnhealthy Expenses______________
(feed liabilities)(feed liabilities)
FinancialFinancial
StatementStatement

12. IncomeIncome
ExpensesExpenses
AssetsAssets LiabilitiesLiabilities
Earned IncomeEarned Income______________________
Passive IncomePassive Income______________________
Total IncomeTotal Income__________________________
ExpensesExpenses________________________________
Cash FlowCash Flow______________________________
Journey ToJourney To
FinancialFinancial
Freedom!Freedom!

13. IncomeIncome
ExpensesExpenses
AssetsAssets LiabilitiesLiabilities
Journey ToJourney To
FinancialFinancial
Freedom!Freedom!
FINANCIAL GOALFINANCIAL GOAL
ReachReach “Financial Freedom”“Financial Freedom”
by:by:
1.1. BuildingBuilding assetsassets whichwhich
generategenerate passive incomepassive income
2.2. ManagingManaging expensesexpenses to feedto feed
assetsassets
3.3. IncreasingIncreasing passive incomepassive income
until it exceedsuntil it exceeds expensesexpenses

14. 1.1. ““I will retire, be happy and do nothing”I will retire, be happy and do nothing”
2.2. Retirement is often followed by declining health andRetirement is often followed by declining health and
happinesshappiness
3.3. Healthy retirement is followed byHealthy retirement is followed by FULFILLINGFULFILLING
ACTIVITYACTIVITY
4.4. The concept of “The concept of “Financial Freedom”Financial Freedom” is an alternativeis an alternative
to traditional ideas of retirement:to traditional ideas of retirement:
a.a. Financial FreedomFinancial Freedom will give you the opportunity towill give you the opportunity to
bebe maximally creativemaximally creative with the use of your timewith the use of your time
b.b. Financial FreedomFinancial Freedom will allow you to more completelywill allow you to more completely
fulfill yourfulfill your LIFE PURPOSE!LIFE PURPOSE!
MYTHS OFMYTHS OF
RETIREMENT ANDRETIREMENT AND
LIFE PURPOSELIFE PURPOSE
II
EE
AA LL

15. ““CASH FLOWCASH FLOW
QUADRANTS”QUADRANTS”
EE
SS II
BB

16. EE
SS II
BB ““CASH FLOWCASH FLOW
QUADRANTS”QUADRANTS”
•EE-employee:-employee: seems most secure, offers leastseems most secure, offers least
security; provides a type of freedomsecurity; provides a type of freedom
•SS-self-employed:-self-employed: a little more freedom; thea little more freedom; the
“S” owns a job; a little more security“S” owns a job; a little more security
•BB-business owner:-business owner: more freedom, unlimitedmore freedom, unlimited
earning potential; some increased securityearning potential; some increased security
•II-investor:-investor: multiple streams of income; offersmultiple streams of income; offers
greatest freedom and securitygreatest freedom and security

17. II
EE
AA LL
II
EE
AA LL
THETHE
ECONOMICSECONOMICS
OFOF
EMOTIONALEMOTIONAL
ENERGYENERGY

18. ANALOGIES TOANALOGIES TO
ECONOMIC PROCESSESECONOMIC PROCESSES
IncomeIncome
AssetsAssets
ExpensesExpenses
LiabilitiesLiabilities
II
EE
AA LL

19. EnergyEnergy
IncomeIncome
EnergyEnergy
ExpenseExpense
EnergyEnergy
AssetsAssets
EnergyEnergy
LiabilitiesLiabilities
Energy Boosters______________Energy Boosters______________
Energy Flow_________________Energy Flow_________________
EmotionalEmotional
EnergyEnergy
StatementStatement
(temporary sources)(temporary sources)
(from assets)(from assets)
Healthy ExpensesHealthy Expenses__________________________
(feeds assets)(feeds assets)
Unhealthy ExpensesUnhealthy Expenses______________________
(comes from(comes from andand feeds liabilities)feeds liabilities)

20. EnergyEnergy
IncomeIncome
EnergyEnergy
ExpenseExpense
EnergyEnergy
AssetsAssets
EnergyEnergy
LiabilitiesLiabilities
Energy BoostersEnergy Boosters
(From non-recurring sources—(From non-recurring sources—
can be healthy/unhealthy)can be healthy/unhealthy)
•HumorHumor
•Social contactSocial contact
•Emotional experiencesEmotional experiences
•Occasional exerciseOccasional exercise
•Occasional contact with natureOccasional contact with nature
•Vacations, relaxation timeVacations, relaxation time
EmotionalEmotional
EnergyEnergy
StatementStatement

21. EnergyEnergy
IncomeIncome
EnergyEnergy
ExpenseExpense
EnergyEnergy
AssetsAssets
EnergyEnergy
LiabilitiesLiabilities
From Energy Assets, such as…From Energy Assets, such as…
•Healthy beliefs and belief systemsHealthy beliefs and belief systems
•Healthy emotional patterns—self-Healthy emotional patterns—self-
empathy, self-esteem, resilience,empathy, self-esteem, resilience,
stabilitystability
•Healthy established behaviorHealthy established behavior
patterns—exercise, diet, nature, self-patterns—exercise, diet, nature, self-
reflection, spiritual practicereflection, spiritual practice
•Fulfilling relationships—family,Fulfilling relationships—family,
friends, communityfriends, community
EmotionalEmotional
EnergyEnergy
StatementStatement
Energy FlowEnergy Flow (recurring)(recurring)

22. EnergyEnergy
IncomeIncome
EnergyEnergy
ExpenseExpense
EnergyEnergy
AssetsAssets
EnergyEnergy
LiabilitiesLiabilities
•Expended in a workoutExpended in a workout
•Expended in productive day/projectExpended in productive day/project
•For an enjoyable social timeFor an enjoyable social time
•Energy output for creativityEnergy output for creativity
•Energy expended/released in:Energy expended/released in:
•GrievingGrieving
•Anger workAnger work
•Making loveMaking love
EmotionalEmotional
EnergyEnergy
StatementStatement
Healthy Energy ExpensesHealthy Energy Expenses
(Related to Energy Assets)(Related to Energy Assets)

23. EnergyEnergy
IncomeIncome
EnergyEnergy
AssetsAssets
EnergyEnergy
LiabilitiesLiabilities
Resulting from Energy Liabilities,Resulting from Energy Liabilities,
such as…such as…
•Self-limiting beliefsSelf-limiting beliefs
•Unhealthy emotional patternsUnhealthy emotional patterns
•Low self-esteemLow self-esteem
•Depression, residual anger,Depression, residual anger,
chronic fear/anxietychronic fear/anxiety
•Unhealthy behavior patternsUnhealthy behavior patterns
•Unhealthy relationshipsUnhealthy relationships
EmotionalEmotional
EnergyEnergy
StatementStatement
EnergyEnergy
ExpenseExpense
Unhealthy Energy ExpensesUnhealthy Energy Expenses

24. EnergyEnergy
IncomeIncome
EnergyEnergy
ExpenseExpense
EnergyEnergy
AssetsAssets
EnergyEnergy
LiabilitiesLiabilities
Energy Boosters______________Energy Boosters______________
Energy Flow_________________Energy Flow_________________
(temporary sources)(temporary sources)
(from assets)(from assets)
Energy ExpensesEnergy Expenses__________________________
Total Energy IncomeTotal Energy Income____________________
Emotional WealthEmotional Wealth__________________________
GrowingGrowing
GoodGood
Fortune!Fortune!

25. Anger drains energy & pushes people awayAnger drains energy & pushes people away
II
LL
THE COST OF ANGERTHE COST OF ANGER
((Unhappiness & Failed RelationshipsUnhappiness & Failed Relationships))
Energy DrainEnergy DrainEE
AA
Energy GainEnergy Gain

26. BASIC ENERGY FLOWBASIC ENERGY FLOW
(Dependence, subordination)(Dependence, subordination)
Limited Assets, No Real LiabilitiesLimited Assets, No Real Liabilities
II
EE
AA LL

27. Income feeds Assets, Assets feed Income,Income feeds Assets, Assets feed Income,
ENERGY INCOME EXCEEDS EXPENSES!ENERGY INCOME EXCEEDS EXPENSES!
II
EE
AA
Abundant Energy!Abundant Energy!
HEALTHY ENERGY FLOWHEALTHY ENERGY FLOW
(Vibrant, productive, joyful)(Vibrant, productive, joyful)
LL

28. EnergyEnergy
IncomeIncome
EnergyEnergy
ExpenseExpense
EnergyEnergy
AssetsAssets
EnergyEnergy
LiabilitiesLiabilities
GrowingGrowing
GoodGood
Fortune!Fortune!
EMOTIONAL WEALTHEMOTIONAL WEALTH
To growTo grow “Good Fortune”“Good Fortune” by:by:
1.1. BuildingBuilding Energy AssetsEnergy Assets toto
generategenerate Energy FlowEnergy Flow
2.2. Transform all expenses toTransform all expenses to
Healthy ExpensesHealthy Expenses
3.3. GrowingGrowing Energy IncomeEnergy Income untiluntil
it exceedsit exceeds Energy ExpenseEnergy Expense

29. IncomeIncome
ExpensesExpenses
AssetsAssets LiabilitiesLiabilities
1.1. Dealing withDealing with CHANGECHANGE
2.2. Response toResponse to ILLNESS &ILLNESS &
ADDICTIONADDICTION
3.3. Response toResponse to AGINGAGING
4.4. Response toResponse to DEATH/DYINGDEATH/DYING
TRANSFORMINGTRANSFORMING
LIABILITIES TO ASSETSLIABILITIES TO ASSETS
GrowingGrowing
GoodGood
Fortune!Fortune!

30. 1.1. Understanding/utilizing theUnderstanding/utilizing the Emotional EnergyEmotional Energy
StatementStatement
2.2. Minimizing unhealthyMinimizing unhealthy Energy BoostersEnergy Boosters
3.3. Creating healthyCreating healthy Energy ExpensesEnergy Expenses
4.4. Building and growingBuilding and growing Energy AssetsEnergy Assets
5.5. Assessing and reducingAssessing and reducing Energy LiabilitiesEnergy Liabilities
6.6. TurningTurning Energy LiabilitiesEnergy Liabilities intointo Energy AssetsEnergy Assets
7.7. GrowingGrowing Energy FlowEnergy Flow to exceedto exceed Energy ExpenseEnergy Expense
II
EE
AA LL
SKILLS FOR GROWINGSKILLS FOR GROWING
EMOTIONAL WEALTHEMOTIONAL WEALTH

31. II
EE
AA LL
II
EE
AA LL
EMOTIONALEMOTIONAL
ENERGY—ENERGY—
GROWTH ANDGROWTH AND
DEVELOPMENTDEVELOPMENT

32. LoveLove
EnergyEnergy
InnocenceInnocence
TrustTrust
AT BIRTHAT BIRTH
Our first emotional experiencesOur first emotional experiences
AndAnd Our Original Energy SourceOur Original Energy Source

33. Inevitable Pain and FearInevitable Pain and Fear
LoveLove
TrustTrust
EnergyEnergy
PainPain
SorrowSorrow
Early experiences ofEarly experiences of Energy DrainEnergy Drain
FearFear
FearFear

34. The Necessary ProtectionThe Necessary Protection
LoveLove
TrustTrust
JoyJoy
PainPain
SorrowSorrow
FearFear
FearFear
AngerAnger
Walls/distanceWalls/distance
More potentialMore potential Energy DrainEnergy Drain
Fight/Flight/FreezeFight/Flight/FreezeFamily/ConnectionFamily/Connection

35. Love JoyLove Joy
EnergyEnergy
PainPain
SorrowSorrow
FearFear
AnxietyAnxiety
AngerAnger
WithdrawalWithdrawal
THE PERFORMERTHE PERFORMER
PerformingPerforming PretendingPretending
ENERGYENERGY
THE FIRSTTHE FIRST
ADULTHOODADULTHOOD

36. Love, joyLove, joy
&&
HealthHealth
PainPain
SorrowSorrow
FearFear
AnxietyAnxiety
AngerAnger
WithdrawalWithdrawal
TURNING WITHINTURNING WITHIN
Inner focusInner focus
ENERGY GAINENERGY GAIN
THE SECOND ADULTHOODTHE SECOND ADULTHOOD
Quiet timeQuiet time

37. LoveLove
JoyJoy
ExuberanceExuberance
PeacePeace
SkillSkill
KnowledgeKnowledge
StrengthStrengthAwarenessAwareness
Pain
Fear Anger
Withdrawal
EMOTIONAL WELLNESSEMOTIONAL WELLNESS
MATURITYMATURITYWISDOMWISDOM
EnergyEnergy
FlowsFlows
InIn
EnergyEnergy
FlowsFlows
OutOut

38. INNERINNER
SOURCESOURCE
OFOF
ENERGYENERGY
INTEGRATIVE MODELINTEGRATIVE MODEL
EnergyEnergy
FlowsFlows
InIn
EnergyEnergy
FlowsFlows
OutOut
SkillSkill
KnowledgeKnowledge
WellnessWellness
EconomyEconomy PhysiologyPhysiology
DevelopmentDevelopment

39. In business:In business:
• Know how money worksKnow how money works
• Be a tough & fair negotiatorBe a tough & fair negotiator
• Focus on financial responsibilityFocus on financial responsibility
• Plan for your financial freedomPlan for your financial freedom
• Hold the vision of your life purposeHold the vision of your life purpose
FINANCIALFINANCIAL
WELLNESSWELLNESS
EMOTIONALEMOTIONAL
WEALTHWEALTH
II
EE
AA LL

40. In life:In life:
• Know that you are wellKnow that you are well
• Know that you are wealthyKnow that you are wealthy
• Appreciate your many assetsAppreciate your many assets
• Practice an attitude of gratitudePractice an attitude of gratitude
• Hold a vision of the life you chooseHold a vision of the life you choose
FINANCIALFINANCIAL
WELLNESSWELLNESS
EMOTIONALEMOTIONAL
WEALTHWEALTH
II
EE
AA LL