Managing Director and Head of Dynamic Funds
Certified Financial Planner
Operator: You are tuning in to On the Money with Dynamic Funds, a podcast series that delivers access to some of the industry's most experienced active managers and thought leaders. We're sitting down to ask them the pertinent questions to find out their insights on the market environment and navigating the investment landscape. Welcome to another edition of On the Money.
Mark Brisley: I'm your host, Mark Brisley. Given the circumstances in which the world, and by extension, all of us have had to adopt over the last 15 months, the unfamiliar conditions that have changed our routines, personal and professional activities, and the way we interact, it's not surprising that we think about this global pandemic as an accelerant to our thinking about how we are processing these conditions and the impacts both short and long-term.
With what is now evident as light at the end of the tunnel, it is natural that our thoughts turn to what we've learned about ourselves and our relationships with such tumultuous change. Today's subject dives deeper into an area that perhaps we don't think of as a relationship in our lives, but the reality is we should. It's a subject that we have wanted to address, not as a pandemic-driven matter of interest, although in the subconscious, it is likely been accelerated for many of us.
Because, in our guest's own words, the conversation around money and finances has traditionally been met with confusion, uncertainty, and an overall disconnect. This is because it has always been a one-sided conversation that is focused on gathering information in the mind and creating a task list instead of beginning with a firm understanding of a person's feelings that have developed over time, much the way it has been for her. Taking real control of your relationship with money is rooted in your emotional connection to the conversation.
In her experience as a Certified Financial Planner, Martha Adams has spent a career helping her clients plan and achieve their financial goals, and her passion for changing the conversation around money and finances has become the focus of her life's work. She believes in everyone's ability to create positive and impactful change in their lives by taking back control through their own understanding and self-development.
She is the international best-selling author of Cleopatra's Riches, where Martha shares her own experiences and provides the tools for the reader to constructively work through the past emotions towards money and finances. Martha, it's a real pleasure to have you join us today.
Martha Adams: Thank you so much for having me.
Mark: You talk a lot about financial literacy and a common theme within financial empowerment as exactly that. You also talk about a different starting place to establish a strong foundation for ourselves in our finances. Where do you believe the starting place is?
Martha: The true starting place to financial empowerment is actually with you, because before we can start with the intellectual information, we can first take the opportunity to explore our own feelings and beliefs around money. When it all boils down, money is ultimately a human experience that's been formed over time, creating our money story and our emotional associations that have been formed through those experiences.
If you think about your life and you think about any life event, small, medium, large, insignificant, chances are money was there; it played a role in some way, shape or form. With that came your emotional associations. When we connect to those emotions, we discover that money in our lives is so much more than just math.
Mark: In reading your book, I have to say, I've really never read a book quite like it because I've spent a career reading books about markets and what we should be looking for. This covers subjects that I have personally not been able to unpack even myself. In reading it, I discovered there are hidden negative associations with money in just about every aspect of our lives. I want to ask you if you could share about the way our emotional associations can be seen with money in our lives today.
Martha: One of the ways that we see our emotional associations is in a cycle that I call the make-spend cycle. In that cycle, we have a situation where we're making money and then we're spending it. Sometimes we're spending it quicker than we're making it. Then what we look to do is insert the idea of savings somewhere in that cycle. Whether it's at the beginning of the month where we're looking to put money aside for ourselves first, or at the end of the month, seeing what's left and then putting money aside.
In a lot of ways, that is a negative cycle. To understand that better, let's break it down. Let's break down how we feel about the words make, spend, and even save. If I talked about making money, we might think making money; that's good.
That's got a lot of positive associations but when I asked, when we boil it down, we're talking about the way we feel about the idea of making money, it actually has a lot of hidden negative associations, ideas like greed, guilt, dread, because the idea of making money can be associated with having to work, and all the stress that's around that. We have a lot of negativity around making money. Now, the next part of the cycle is spending. Spending as positive, right, Mark? That's instant gratification.
Mark: Well, it's something I do very well.
Probably more, well, since we've been locked down.
Martha: That's right. Many of us feel that spending money has positive associations, while the idea of making money had negative associations, spending money, that's got to be positive, instant gratification, associations with the idea of retail therapy, that's all really positive, but then what happens when the credit card bill arrives, or we start to look at our bank statement, and we have the realizations for what we've spent?
The way we feel is really different. We can have emotional associations with guilt, buyer's remorse, all associated with the idea of spending. Another association with the word of spending, is it’s spent, it's gone. Here I am in a make-spend cycle where I have negative associations with making and with spending. Now I want something positive to change it; what have I been taught to do? We've been taught the idea of saving money. Now, that's positive, right, Mark?
Mark: That's very positive.
Martha: You’d think so. You and I would think so. That's the air we breathe, that the industry we're in, that is a passion for us. At the same time, let's think about emotional associations with the word save. We can start to think about ideas like save yourself, or squirrel things away. Our association with saving is as though something bad is going to happen. If I’m in a make-spend cycle, and I'm inserting the idea of savings, what is it that my savings are taking away from? It's ultimately taking away from my spending.
In every part of the make-spend, maybe save cycle, we not only have negative emotional associations, we have depreciating ideas. Just like negative beliefs and associations form the make-spend-save cycle, positive emotional associations can change these. We can shift our mindset over from make, spend and save, to instead, earn, grow and enjoy. Those are very different words with very different emotional associations. As we build our own earn, grow, enjoy model, we discover and work through our own negative associations to shift over to the positive.
Mark: As I hear you talk about this, thinking about another conversation that I'm having, and I know a lot of our listeners are having, and it's conversations with our kids. As a parent, I have early and late-stage teenagers in my house. I can actually see the evidence of some stress around money in my oldest. As we think more about our relationship with money as adults and as parents, ideally, when should we be talking with our kids about the same subject?
Martha: The best time to talk with your kids about money is now. When we discover our own feelings and beliefs, which is exactly what we've been doing in this conversation, we also develop an awareness for the messaging that we share with our kids. More than that, we discover what it is that we don't share and why we're not sharing it. When we worked through our own money story, as a critical first step, we can break that negative cycle and choose what messages, and more than that, the experiences that we want to equip our children with.
We build context for them as well. It's not this conversation where now they're just sitting in a chair and hearing us lecture them about a topic, we're talking with them. In this practice, we open a meaningful line of communication and help them develop their own emotional intelligence around money along the way. We're building the foundation for the financial literacy, the IQ information that they'll also learn down the road.
Mark: It's great advice because we see the evidence. This is not something that's being done really well within the education system framework at all, is it?
Martha: You're absolutely right, Mark. I think there's a loop around expectations of where the money conversation is hard. As parents, we can expect that the school system is going to teach them, and then the school system expects that we, as parents, are going to teach them. When we are discovering more about our own money story, more about the messaging that we received or didn't receive, now we can choose what the next generation takes on. That messaging that we want them to have, whether it was the lessons we learned and valued, or the change that we want to see for ourselves, for our families, and for future generations.
Mark: Getting to our kids earlier, that's probably one of the easier conversations, so long as we have the confidence and a framework to utilize when we're talking to them about it. I am sure we have listeners that are well into their financial planning journey. I bet some of them are listening, thinking I'm so far down this road, how can I possibly change or have a different relationship with money at this point. Is our starting place actually different?
Martha: If money is a human experience, it continues to be no matter what your age or starting place, because your feelings and beliefs grow and evolve over time. Emotions are a part of your life and your finances in so many ways. Connecting with the way you feel has actually been the missing piece in the financial conversation.
Mark: Well, let's then turn to the subject of the day, of course, which is the pandemic. This is not, as I said, a pandemic-driven subject, but it has changed our lives in so many ways, and spending habits, I think is front and center for a lot of people. We've seen everything from increase in purchasing largely on an impulse, boredom purchases, the Amazon factor, and on bigger ticket items.
Just the surge we've seen in things like vacation properties, ridiculous over market value buying that's been going on. This is also left a lot of people with higher debt levels and that hope that rates stay where they are and that I'll just be able to manage. How do we deal and ultimately, unpack all of the stuff that's been going on financially with us during the pandemic?
Martha: I love the term unpacking because that acknowledges the way you feel. You can't unpack anything without acknowledging your feelings. That's the first step, acknowledging the way that you feel. We have gone through, and in many ways, are still in an exceptional circumstance, and acknowledging that helps you to look to start a different conversation around money. Because, often, when we look to our spending habits, we could want to change that, but the way we feel about ourselves and therefore, the way we talk about ourselves around money is negative.
How can we expect a positive result when we're starting in a negative place? I'd like to give you an example of that. We're looking at our spending habits over the pandemic, and we're saying, "I need to get out of debt. I need to be better with my money. I need to stop spending so much." Mark, are those positive statements? Are they negative statements?
Mark: Well, I think on the surface, they seem positive.
Martha: Exactly. We think we're doing the right thing, right? Because I'm saying, I need to do this. It's good for me. How do I feel about myself? You highlighted it perfectly, Mark, you said on the surface, it seems positive. You also talked about unpacking. Let's go beyond the surface to say, "How do I really feel about myself when I say need?" When you think about things that you really need in life, it's not very motivating. Need is often associated with guilt, an obligation, all depreciating feelings.
How can I expect a positive result of myself when I am in the process of what I'm saying to myself, depreciating myself? This is an example of where our emotional intelligence and the intellectual information compare together so beautifully. Because if I shift from the negative of need, and focus instead on what I want, who's in control of that feeling, if you want something? Think about something in your life that you've wanted, for everyone listening and Mark, I'd love to invite you right now to pull up on the screen of your mind, something that in your life, you really wanted and you were going to obtain that. You were going to make that happen.
Mark: Oh, I wish there was only one.
Martha: Okay. [chuckles] In any of those examples, who was in control of the way you felt?
Mark: Most of those examples, it was definitely myself but with a family and considerations for all, there's the background feeling of how it's going to be perceived.
Martha: When it boils down, yes, we can focus on how it's going to be perceived in a lot of ways that's letting the outside in. When you focus on the want, the want is yours, no one holds or controls that want other than you. Need, in a lot of ways, is externally focused. When you look at want, you're in the driver's seat, and nothing can really get in your way of that. Because we can then, if we really want something, we're going to cancel out the outside world, because you're in control of that want.
The difference really between need and want are the emotional associations, and ultimately, the results. How do we shift from need to want in the financial conversation? How do we shift from obligation and guilt to, instead, desire? You ultimately give yourself the grace of understanding with the commitment to move forward. If we look at the pandemic, we're going to give ourselves grace, this is fully an active statement. When you're giving yourself grace, you're allowing yourself the ability to unpack, to understand.
It doesn't stop there. That's the key because we could look at it and pity ourselves and give ourselves grace, time and time again, that is important. What's also important is where our gaze is directed. Now, that's where we have a commitment to move forward. Because if all I do is look at my statements, and depreciate myself, nothing is going to change.
When I'm focused on moving forward, now I'm focused on want, the feeling of want leads to seeing all the ways you can change for the positive moving forward and that encourages action. I always say what leads to can, leads to do. With that, you might also feel that, hey, this is a good time to call my advisor, call my advocate in my finances and create a plan or mend the financial plan to move forward in the way that you want.
Mark: One of the things that this is making me think more about is, and I remember my father always saying to me, and my behaviours have changed over the years, was when I had cash in my pocket and clearly and most often, it would burn a hole in it. Cash doesn't seem to be the way of the world these days, but access. We just have so much easier access to things now. Is the fact that you can access purchases or you can access capital to do things that you may not have otherwise done, had access not been as easy as it is, thanks to technology?
Is that even more reason to be in tune with this relationship and emotional connection with your money and finances?
Martha: What a great point. Absolutely. If I am in a make-spend cycle, anything can accelerate that cycle and especially right now with all of the elements that you highlighted; access to capital and exposure to ads, and the ease of transactions. You can be on an app and see the perfect item that you can in no time purchase. A lot of apps now make it even easier where it's just one slide and it'll be at your doorstep tomorrow.
I'm not saying that purchases are a negative thing, nothing is inherently negative. If I'm in a negative cycle and I have access to more capital, I have more apps and ads that I see all the time, that will accelerate it. That's another reason why, now more than ever, is the perfect time to connect to our own emotional associations around money because when we do that, we prioritize ourselves in the dialogue.
Mark: It's great advice. Speaking of advice, I know you are a huge advocate for investors, anyone with money and a desire to save to seek advice and through a qualified financial advisor. All of this information we've been talking about today and all of this thought process towards our relationship and our emotional connection to money, how will this help or how will this relate to a relationship that we will have with an advisor?
Martha: When you connect to your emotions, when you connect to the way that you feel around money, you see yourself as central to the conversation with your advisor. That enriches the communication that the two of you have. That also includes a comfort with asking questions and being involved. It sounds simple, but the impact of it is really meaningful because it changes the "I trust you" statements that you can have for your advisor to instead, including trusting yourself as an integral part of that dialogue.
What that ultimately does is elevates your confidence in the financial conversation and then your advisor becomes your specialist versus your expert. Those are two very different words with very different emotional associations behind them, specialist versus expert. The difference is in the way that you see yourself and feel about yourself in the financial conversation because when you acknowledge that your advisor is your specialist, you also acknowledge that you are the specialist in yourself and that all started with the way you feel and what you believe.
Mark: One of the things that we always associate with money and finances is how we deal with things or the people that we look for to help us deal with things is around IQ. I’ve got to be the smartest person in the room, or I’d better find the smartest person to help me deal with this. Something we don't talk enough about is EQ. I wanted to ask you about that particular subject and what impact does it have on the financial planning process?
Martha: Well, I'm definitely an advocate for a comprehensive financial plan, and including your EQ changes everything in the financial plan. The IQ part may not change very much, but if you start with the true starting place, which is with how you feel, now, it gives meaning, value, and purpose to all the work that is done in the planning process because it also means that the financial plan and the recommendations that are within it are truly built around you.
You had an active role in the process, and then that means that as a client, you don't have the feeling of being in some preformed box that your fit into, this one is truly customized for you and with you and that came with your involvement. Mark, I'd actually love to share with you a story where I really got to see the involvement outside of my client base with an interview that I had with a social media influencer. She had an advisor, she had a full financial plan done, and she went for her regular reviews. Mark, would you say that she was involved in the planning process? Is that a fair thing to say?
Mark: Oh, sure. If she was participating in the reviews and visiting with an advisor and had an advisor period, yes.
Martha: I would say the same thing and on the surface, that's the way that it appeared, but was she really asking her questions? Did she really feel that she was a part of the conversation or was her advisor her expert instead of her specialist? After she read the book and then we spoke, one of the first things that she said to me was after she was done, the conclusion, she put down the book and one of the first things that she did was reach out to her advisor and start to ask questions, start to be involved in a meaningful way. The difference was she now felt a spirit of collaboration. She saw her advisor as her advocate.
She connected with the value that was consistently being displayed to her; however, the difference now came from her involvement. She felt value in her involvement and the relationship and the communication were both enriched. Her relationship with her advisor was enriched and the involvement between her and her spouse with their advisor was enriched too because she wasn't just there to sign a form anymore, she was there to ask questions; she was there to collaborate with her specialist and at the center of all of that was the way that she felt she saw herself now in the conversation, because at the core of it when you change the feeling, you can change the belief and then change the result.
Mark: This has me thinking as well, and I'm sure there's people that will be listening to this podcast that will say, this is middle-class or people just starting out type stuff, but I think you've highlighted the fact that this is, whether you're high net worth, mid net worth, or no net worth or emerging affluent, whatever we want to call it, it doesn't matter. The importance of understanding what's going on within yourself is important, regardless of the asset or net worth level.
Martha: Absolutely, because if money is a human experience, it doesn't discriminate based on asset level, based on where you grew up, based on the schools that you went to; it's a human experience. I have an example that I'd love to share. It was with a very successful producer that actually came from a wealthy family. You would think then that there were all positive associations when it came to money.
The biggest thing that he consistently shared was fear. Because one of the lessons that he consistently heard from his parents was a fear of losing everything. Overnight, you could lose everything. That translated into his life, into his relationship with his advisor, into his marriage, into business decisions, or lack thereof, because of that fear that was repeated time and time again that led to that belief, and then we saw it in results.
It can be in any asset level. This is where, if we highlight one of the things that we said earlier, which was to acknowledge the way that you feel and know that it doesn't discriminate on asset level. The way you feel is worth validating because when you validate that, you now allow yourself the ability to work through it and break past self-judgment.
Mark: When we started this podcast, Martha, we talked about how, when we were referring to the pandemic in the current environment, we find ourselves in a lot of things that were considered accelerants. If we watched the markets over the past year and a half, lots of things have come along and it seemed opportunistic. Because of the pandemic, this opportunity is going to bring this or result in this and it's going to entice people to potentially want to invest in areas.
You brought up fear in your previous comments. I'm glad you did because I only understood what this acronym meant a few months ago, thanks to my kids, was with this FOMO effect. The fear of missing out is something that seems quite prevalent. We watched it unfold before our eyes with the GameStop. When I knock out the GameStop Effect, a lot buzz, influx of interest into the GameStop stock and elevated the stock price, all kinds of media interest.
I had friends calling me three weeks after asking me if they thought I was too late to get in. This seems to be an issue more about EQ in the financial planning process. What are your thoughts on that and is this real? Is this FOMO element a subject matter in your book and what we've been talking about today impacting the effect of your financial planning process?
Martha: Absolutely, it is. This question really does bring it all together. Everything that we've been talking about can be seen in the GameStop Effect. I love the way you call it the GameStop Effect because it's very true. In this, when we include our emotional intelligence in financial planning, then we take ownership of the financial plan, and in any of our thoughts, the plan becomes central and integral. Because having a plan that starts and continues with your goals and objectives means that now your investment conversations and decisions become focused on those goals and objectives. Those goals and objectives were based on want. That want is only yours.
Now, questions, and inquiries come from a place of confidence instead of comparison, or FOMO, the fear of loss, the fear of missing out. Because now, with our elevated emotional intelligence, we also have an enriched line of communication with our advisor. Our questions to our advisor change, not only are we more willing to pick up the phone, hop on a Zoom or Teams meeting and ask questions, but the way we ask the questions changes as well, because now we're asking, hey, help me understand or does this work for me? We're more willing to ask the advisor because we see them as our specialist and advocate.
They are advocating for your goals and objectives. That makes you far more comfortable and not only asking questions – asking again. If it doesn't make sense, or if you are looking for clarification, you're happy to ask, especially around the GameStop Effect which is a volatile event that maybe you wanted to participate in or ask or better understand. These thoughts and questions in the end affect the plan and have to do with what works best for you as opposed to everything and everyone else.
The plan is what's central. There's no need to feel like you're going to be missing out, or you need to keep up with the Joneses, that idea of comparison. Now you can make good informed decisions that come from a place of understanding. The key here is that all of that started and continued with your emotional intelligence around every aspect of money in your life.
Mark: This entire subject is something that I think is adding a new element to what is often not thought or even spoken about for so many people as they build wealth, accumulate wealth and actually, try to enjoy the effort along the way. For our listeners that are taking this in today, perhaps have even read your book. Now the question for them is now what? What next?
There's been a real influx of advertising and influence around the ability to do it yourself, to save fees and platforms that give you technology proficiency with respect to investing and saving, but seem to be missing out on the advice piece. What's your recommendation for people as next steps, especially for those that maybe not be using the services of a qualified financial advisor and how important is it that that be part of the equation, because do it yourself seems like an awfully big task with all of the things that have to be considered, especially in addition to those you've talked about today.
Martha: I am absolutely an advocate for financial advice from a trusted, licensed professional. The reason for that is that money is so central to so much of your life, just like your health is. I focus on the idea of financial wellness, being connected to health and wellness. Financial wellness is health and wellness. When it comes to advocating for my wellness, I look to medical professionals that I trust because they are specialists in their field.
I value myself and my health. I look to a professional to help educate me and inform me. It started with me being an advocate for myself, and then looking to someone to also advocate for my health, with what they specialized in. Not for a moment, do most of us hesitate when it comes to talking with a health professional. There's this idea around money that you must be an expert in money. You must do it yourself.
We internalize that feeling, form the belief and then say, okay, I feel this pressure to do it myself, so we go and do that. Because money isn't something that we talk about, what we can find is that we might do it ourselves but then feel that, ''Hey, this isn't actually what I'm the specialist in, this isn't what I love.'' Now here I am dealing with money on my own, dealing with the investments on my own, I don't feel that I have a plan. I'm putting this together and then those negative feelings and beliefs end up getting accelerated in our results.
How do we change that? Well, when we see value in ourselves, when we start to interview professionals, to say, ''Hey, I'm going to go out, and I'm going to interview an advisor.''
To know that this is my advocate, the person who's going to work with me, now, I feel differently about the relationship. I'm not starting with judgment for myself on a topic that I don't specialize in, and perhaps I don't want to specialize in.
I go to see my medical professional, and I don't expect myself to become a naturopath or a general practitioner but I do expect that I'm going to be able to communicate how I feel, what I want for myself, and that they are going to look to advocate for me as well. There's value in that. There's a lot that they know that I won't know. What I look for isn't what the fee is, it’s what the value is because that is what accelerates. That all started from a positive place.
Mark: Well, Martha, you've certainly unpacked a lot in a subject that you know, quite frankly, and as I said, already, I think is really an unspoken element of financial planning, wealth management. You've laid the foundation for people to start thinking about how they're actually going to enjoy the results of their lifelong journey with money. Can't thank you enough for that and really appreciate you being here with us today.
Martha: Thank you so much for having me. It's an honour and a privilege to be here.
Mark: For our listeners, as I mentioned, Martha is the best-selling author of the book Cleopatra's Riches, which you can access absolutely on Amazon and Costco and most major book outlets. If you'd like to find out more about Martha, you can check her out on her website at marthaadamsmedia.com. I want to thank everyone for joining us today. This has been another edition of On the Money. On behalf of all of us at Dynamic Funds, we continue to wish you good health and safety.
Operator: You've been listening to another edition of On the Money with Dynamic Funds. For more information on Dynamic and our complete fund lineup, contact your financial advisor or visit our website at dynamic.ca
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