Fear and greed are the two most essential emotions when it comes to our financial well-being.
When I first meet with people, I identify which camp they reside in because everything going forward will be dictated by their emotional fear or greed. The overwhelming driver of their financial success is their behavior, not what investments I recommend or their assets.
A person in the fear camp worries that they will not have enough money to overcome inflation and taxes over the long haul and ultimately lose today’s purchasing power.
On the other side, a person in the greed camp wants to chase the next big thing and tends to buy high and sell low.
When I work with a couple, and each of them is in a different camp, it is a balancing act to keep one of them satisfied and make sure the other can sleep at night.
I handle my clients in a way that helps educate them on what camp they are in and what the pitfalls and advantages to each emotion are. Neither camp is right or wrong, but it is crucial to identify which you reside in and take the necessary steps to protect yourself from the potential disasters that can occur.