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Blog - Lynn Telford-Sahl, Certified Money Coach For Women In Business
Television companies LOVE Super Bowl Month. That's when 4.5 million of you bought new big screen TV sets in 2011, which was up from 3.6 million in 2010. Now, here's the question: If you're impulsively buying a new TV this season, are you more likely to use credit or pay cash? And, which part of your brain do you think is in charge of this decision - your logical neocortex or your more emotional midbrain? And why could the latter be a huge problem? (Well, not for the credit card companies.)
Before I answer those questions, think about this: *"Would you rather have $15 in two weeks or $20 in four weeks?" According to fMRI brain imaging scans taken while the person is pondering, this question lights up your prefrontal cortex because it asks you to project into the future. But this next question: "Would you rather have $15 now or $20 in 2 days?" shows that the logical ignores that question and the primitive brain lights up. This is why we get into big trouble as consumers. If we want something and we want it NOW we will have it. Just CHARGE IT, right?
Of course we all know that consumer debt is a problem that creates strife and struggle. For you Cpa’s or Financial Advisors this piece around emotional decisions vs. logical is key when you’re advising your clients to save and invest in their future. Saving for the future is a prefrontal logical decision. Unfortunately, the emotional brain is all too often in charge. We all know of someone (cough, cough) who know they SHOULD be saving for their future or be adding money into their 401K. But the immediate reward of NOW wins out.
To help keep your logical brain in charge of major decisions, Dr. Krueger says to avoid making important money decisions when you're emotional or too tired, wait and sleep on big decisions and have a plan that you STICK to. There's an acronym from 12 Step Programs: HALT: which means to avoid getting too hungry, angry, longely or tired because these are vulnerable states of mind.
(*from The Secret Language of Money, David Krueger, M.D.)
"It was the best of times, it was the worst of times...," wrote Charles Dickens in the 1800s. The same could be said now. Apparently for the top 1% of America it's the best of times. One of my questions since the crash of 2008 has been "Where has all the money gone?" According to the Congressional Budget Office the top 1% of U.S. households almost tripled their after-tax income from 1979 to 2007. For us middle class folks, after-tax income grew 40% and the lower end of the economic scale increased also, but only by 18%.(Modesto Bee 10-27-11 Rich getting richer more quickly)
But let's wait a minute. Hasn't wealth in America (& the world) always been unequally distributed? Yes and let's start by looking at what the definition of 1% really consists of. First, according to Joyce Apleby, emeritus professor of history at UCLA, there's income and there's wealth. To be a one-percenter you have to earn more than $700,000 a year (income) and have assets (wealth) of more than $9 million.
Ok, now we understand the basics of 1% economics. What's the economic truth for the rest of us? Have we middle class Americans been operating from an illusion that we could become rich? Yes and no. "From 1776 to the present, the bottom 60% of the U.S. population has never had more than 11% of the country's wealth." Hmm...Of course if you've done the math this 60% doesn't account for 39% of us.
Back to the question of, "Where did all the money go?" Well, well we know the banks got a lot of money. The investment bankers and hedge fund guys that is. But, I don't really think there's a simple answer to this question. We have a dream in America that hard work, luck and opportunity opens the door to fortune. That dream is a good one because it creates HOPE and in every generation the dream becomes true for a few. This "worst of times" economic recession is a wake-up call to look at the economic inequalities that have always been present, for the 99% to to keep the hope, the hard work and to hold the 1% accountable to a financially more equitable system for all.
Lynn Telford-Sahl, M.A. Psychology, Certified Money Coach (CMC)©. Experienced Money Coach for Women in Business. Make more money, manage it effectively, build wealth!
“I have achieved more goals this year than in the last 8 years of business. When I started Money Coaching I felt guilty paying bills.
I realized why I wasn’t fully financially
responsible - the child inside had been scared about money. As soon as I faced the fears I felt a lot better and good things started flowing and happening.”
Mari Fernandez, Full Force Fitness, Modesto, CA
Lynn Telford-Sahl,Certified Money Coach 1101 Standiford Avenue, Ste B2 Modesto, CA 95350 Phone Number 209-505-2675 firstname.lastname@example.org (c) Copyright 2010 www.LynnTelfordSahl.com All rights reserved. Providing individual coaching, group coaching, life coaching, business coaching, and money coaching to Modesto, CA and the Central Valley. National and International Phone and Virtual Coaching available.
*Money Coaching System by Deborah Price, Money Coaching Institute