Another emotional issue for inheritors is their reluctance to make
any alterations in an existing portfolio, or even to think about
investing a cash inheritance at all. A spouse, in particular, is likely
to view changes of any sort as disloyalty to the deceased partner. I know
that selling stocks the deceased selected can be as emotionally difficult
as packing the deceased's clothing up for the Goodwill, but portfolios
often need to be restructured to adjust to the inheritor's new status,
goals, and income.
There are also a number of self-help groups for people who have
inherited wealth. One such group is The Impact Project; write them at
2244 Alder Street, Eugene, Oregon 97405.
Finally, I always warn clients, and inheritors in particular,
against strongly linking money and investment success with happiness.
Inheriting money can be wonderful; but it is not a guarantee of
happiness. The basic elements that create happiness--love, self-esteem,
fulfillment through work, close relationships--can be nurtured by money,
but they do not stem from it. For the true "fortunes" in our lives, we
need to look elsewhere.
THE GOAL: BECOMING A CONFIDENT INVESTOR
Several years ago, I surveyed successful investors to discover the
personal qualities that make for high investing returns. These people had
one trait in common: confidence.
Of course, self-assurance best develops out of having been
adequately loved as a child, and not all of us were treated that way. But
no matter what our upbringing, we can learn to be assured investors. Time
after time I have seen confidence develop when clients uncover the
emotional pattern that's holding them back, make the necessary
alterations, and accept the rewards.
Trust is the common element of confident investor practice. Though
spirituality is not much talked about in connection with investing, I
believe the two are linked, because trust is, after all, a spiritual
concept. By trusting, we give up complete control, don't fear market
fluctuations, and become comfortable. We learn that the "abiding faith"
we seek is in ourselves.
From Mind Over Money by John Schott, M.D., with Jean S. Arbeiter
Copyright @1997 by John Schott, M.D. and Jean S. Arbeiter Reprinted by
arrangement with Herbert M. Katz, Inc.
THE SYMPTOMS OF POWER-INVESTOR BEHAVIOR INCLUDE:
Buying "hot stocks" based on sky-high estimates of future earnings
or promises of a "hush-hush" discovery that may revolutionize the
industry;
Dreaming of making the "big score" on a stock that will double in
price every few months;
Over-identifying with a stock;
Making excuses for a stock's performance; and
Feeling grandiose about a stock: believing that there is no limit
to how high it can go.
CENTS AND SENSIBILITY:
Psychiatrist/broker John Schott, M.D., on fear of finance
PT: What is the most common mental block that interferes with
getting started in investing?
JS: For many people who come from working-class backgrounds,
[investing] is taboo. And when they do take the first step, they have
trouble talking to family members about it without seeming as though they
have broken the taboo. It gives them a lot of guilt and anxiety.
PT: You tell people that the sooner they see themselves as
investors, the easier it is to put money aside for stocks.
JS: I've instructed people to look in the mirror in the morning and
tell themselves, "I'm an investor. My goals are..." The other thing I've
done is to have them write little stories about themselves in which they
change their sense of identity. If somebody thinks he is not an investor,
he'd write a little story about buying a certain stock and holding it for
so long, about how the price went up and how he felt. It makes people
think in news ways.
PT: What's the most painless way to begin an investment
program?
JS: The best first step is mutual funds, because they tend to be
less volatile than individual stocks. It's also important to look at IRAs
and investigate whether your company has a 40(k) plan.
PT: How can a 30-year-old with a modest income learn to delay
gratification and invest X dollars each month instead of spending it on
new clothes or a stereo?
JS: I tell people to voluntarily take a 10 percent pay cut. Those
who do it find that within six months to a year they have completely
adjusted their "mental accounting." The 10 percent they take out is no
longer experienced as part of their earnings. They've created a mental
account that is sequestered, that goes solely for investments.
PT: Half of all money managers are female, yet many women still
believe that investing is something men do.
JS: With most women, the first problem is a feeling of
incompetence. About 10 years ago, men and women were surveyed about their
confidence in investing. Across all cultural groups, about 80 percent of
men were confident, but only 29 percent of women were. [This lack of
confidence] has to be dealt with through education and support. I clarify
with women the cultural misconceptions that exist and give them simple
investment books to read, and they definitely become more sophisticated.
In fact, women money managers can be superior investors because they have
a lot more intuition than men and an ability to integrate a greater set
of information about companies.
PT: How do you steer a course between letting the market drive you
crazy and ignoring it all together?
Tags:
anxiety,
constellations,
financial future,
gambling,
gyrations,
inheritance,
Investing,
investment decisions,
iras,
longing,
manic depressive,
risk,
simple matter
