Episode 16: More Than Wealth; Discovering the Heart in Money Management with Dr Susan McCarthy, author, speaker, and financial advisor

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Jason Interviews Dr Susan McCarthy on her insights into the emotional dimension of wealth management. With over 22 years of experience and recently named by Barron's as on of the "Top 100 Women Financial Advisors" in the United States, she knows that the world of money is a world of emotion, and she gives us plenty of examples and approaches to honor that fact-beginning with really sitting down and listening to a clients needs, wants, and the story surrounding the life transition that usually precedes a financial transition. In addition, Dr McCarthy explains how, in her experience, the way people relate to money and how they behave around it is a mirror for how they relate to other aspects of their lives-and how critical that awareness can be for life coaches in serving their clients’ needs.

Transcript

More Than Wealth; Discovering the Heart in Money Management with Guest Dr Susan McCarthy, author, speaker, and financial advisor

Announcer:  This program is brought to you by personallifemedia.com.

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Dr. Susan McCarthy: When you deal with people’s money, I think historically in our business the emphasis has been on numbers.  It’s been on growth; it’s been on return, investment, et cetera.  And not enough emphasis has been placed on the life of the person who owns the money…  Every time something happens in your life, there is always a financial side.  All of these transitions that we have, you know, in our lives, there’s always a financial ramification…  We’ve thought that the way to handle emotion, as it relates to money, was to set it aside, that really you need to be rational, you need to be objective, and that’s how you are a good investor.  I think you have to acknowledge the emotions, you have to deal with the emotion, and you have to understand the emotion, because it will affect the success of your portfolio.  It will affect your decisions… 

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Jason McClain: Welcome to the show, Dr. McCarthy.

Dr. Susan McCarthy: Well thank you.

Jason McClain: I’m really excited to have you on.  I just noticed that you were listed as one of the top 100 women financial advisers by Barron’s.

Dr. Susan McCarthy: Yes.

Jason McClain: So thank you for honoring us with your time.

Dr. Susan McCarthy: It’s my pleasure.

Jason McClain: What do you feel had made you most successful as an adviser?

Dr. Susan McCarthy: Well, I think probably what has made me most successful, and what’s one of the most important things in the work that we do is an ability to listen to people, and to hear their story.  When people talk to us about their money or they talk to me about my money, they’re always telling a story.  And it’s always a story that’s pretty closely connected to their life, to their physical life, but also their emotional life.  And those stories are fascinating and I think that’s what my fascination with those stories, and my interest in them, and my ability to hear them has probably been a big key to success.

Jason McClain: Can you speak a little bit about why it’s so important to you to be a good listener, and to be actively interested in people’s stories?

Dr. Susan McCarthy: Well you know when you deal with people’s money, I think historically in our business, the emphasis has been on the money.  You know it’s been on numbers; it’s been on growth; it’s been on return, investment, et cetera.  And not enough emphasis has been placed on the life of the person who owns the money, as we say in our business.  And so if you pay attention to the story around the money, or the person’s attitude toward the money, or their emotions around the money, then you have a much better chance of recommending investments or a strategy and a portfolio that’s going to be successful, because it’s going to take all of that into account.

Jason McClain: And what are some of the techniques or approaches that you use, to not only take it on yourself, but to let the client or prospects in front of you, whom you’re building a relationship with, to let them know?

Dr. Susan McCarthy: Well the first step is always just to sit and to listen, and to let people tell me what they need, what they want.  And sometimes you know they’re not even able to do that.  They can’t tell what they need, because that’s why they’ve come.  You know they just know they’re in some kind of a change or a transition.  Often enough people come to me because something’s happened in their life, some kind of a major life transition, and there’s a financial side.  What I’ve come to understand in all these years in this business is that every time something happens in your life, there is always a financial side.  So maybe there’s been a death. Or maybe there’s an inheritance coming.  Or maybe a person is retiring and they have to take their money out of their retirement plan.  To they’re sending a child off to college, etc.  All of these transitions that we have in our lives, there’s always a financial ramification.  So my first step is just to sit and listen to them and let them tell me what’s going on.  And oftentimes we talk very little about the money in that first meeting.  And then from there we talk about the money and how it relates to the story, and what’s needed.  And I begin to get at what the individual’s actual financial needs are.  My job is not to solve their problem, whatever the problem is.  My job is to solve the financial part of the problem.  And so I always have to keep pin mind that I’m here to help advise on the money.  And then from there we do a proposal and sit and talk through each phase of an investment portfolio.  I’m essentially designing an investment portfolio to meet the need or match the situation or the story, whatever the person has indicated they want.  And then from there, once everything’s up and running, my job becomes to monitor and adapt it as time goes by, and as their life changes.  Does that answer your question?

Jason McClain: It does.  It’s perfect; it’s perfect.  In reviewing your website, which for our listeners is www.DrSusan.com, I noticed the logo there.  It’s a dollar sign that’s sort of right in the middle of a heart.  And it’s becoming very clear to me why.

Dr. Susan McCarthy: You know money is all about emotion, and in our business, I don’t think we’ve acknowledged it enough.  Everybody knows it.  Any one of us, I’m sure you yourself, and I, when you have to make a financial decision, especially if it’s a big one, like you’re going to retire and you’re taking all the money our\t of your retirement plan and now you have to make decisions on it… it can be very anxiety-producing.  So I think we all know that our emotions are tied up with our money, but I don’t think we’ve acknowledged it enough in the business that I’m in.  And so, I thinking our business we’ve thought that the way to handle emotion as it relates to money was to set it aside, that really you need to be rational, you need to be objective, and that’s how you are a good investor.  But I think it’s a little different from that.  I think you have to acknowledge the emotion, and you have to deal with the emotion, and you have to understand the emotion, because it will affect the success of your portfolio.  It will affect your decisions.  You know our financial decisions are emotional, but our emotional decisions are often financial.  I use an example of a gentleman who’s a client, who lost his wife at a kind of a young age, and then he met another woman and really wanted to marry.  She was a widow, and they couldn’t get married because if she married before she was 60 years old she would lose all of her deceased husband’s Social Security.  And she just couldn’t afford to do that, so they couldn’t get married.  So this very emotional decision was dictated by the money.  Now, they will get married, you know, as soon as she passes that age 60.  And they’re still happy.  They’re together and all of that, but of course that very emotional decision, at the end of the day, was dictated by a financial situation.

Jason McClain: Can you say a little bit about what it would make possible in a coach’s or adviser’s business and in their life, if they became a better listener, and really let people talk through what’s happening for them emotionally first?

Dr. Susan McCarthy: Oh gosh.  Isn’t that what we all want to talk about anyway?  You know?  We might want to tell what the story is, whatever’s going on we want to tell the story, but really it’s how we feel about the story.  And that colors everything.  That colors everything.  As it pertains to money, I think there’s tremendous potential, because, just to go a little further into some of the things that I explore, if we become aware of the emotions that we have around money, and what our deep attitudes are about money and what our deep beliefs are about money, then we’re probably going to understand something about the way we think about a lot of things.  Because the emotions that surround money, as an example, are really cornerstones of your emotional life, in most cases, I think.  So if you’re a fearful person around money, well you’re probably a fearful person.  And so there’s a lot to be gained form looking at that emotion as it plays out in money.  If you’re willing, you know, to step back and to really look at it, and then if you don’t like what you see, of course you can change it.  And I maintain that you can use the very money to change the situation.  I mean you can use your dealing with money to cultivate a different attitude if you want a different attitude or to cultivate a different behavior.  You know if you’re stingy with money, well you’re probably stingy with some other things in your life, you know.  I’m not sure that’s answering your question, but…

Jason McClain: Well, I think it’s all really valuable.  And for those coaches out there, and advisers, who really want to understand what it can open up for them in terms of their business results, what would you say about that?

Dr. Susan McCarthy: Well, I know life coaches deal with all different kinds of aspects of a person’s life.  I guess I would say, “Don’t ignore the money, and how they behave around money, because for the simple reason that money runs through every aspect of our life.”  You know, think about it; it colors our decisions on what work we do.  It colors our healthcare decisions.  It influences how we raise our children.  You know it’s a part of our careers.  It’s all aspects of our lives.  So why not look at money to understand ourselves better, to cultivate a different attitude or shape another behavior?  Why not use money?  It’s there every time we turn around and we’re dealing with it all the time.  So I guess I would say to life coaches, “Don’t ignore money, and don’t ignore people’s attitudes and behaviors around money, because they’re going to be very revealing.”  And so a coach may see some things pertaining to money that will help him or help her to understand some other aspect of a client’s life.

Jason McClain: We’re going to take a short break to support our sponsors.  We’re here with Dr. Susan McCarthy, who’s an author, speaker, and financial adviser.  And we’ll be right back.

[break]

Jason McClain: Welcome back to the show.  We’re here with Dr. Susan McCarthy.  I’m Jason McClain, your host and your guide in the 21st-century marketplace.  And before the break we were speaking with Dr. McCarthy about the importance of being a good listener, and intensely… being intensely interested in people’s stories.  And Dr. McCarthy, I also noticed you have this emotional money management IQ poll on your web site.  Before we get into the next topic, it’s really interesting because we’re… the current results are 61% of people are afraid of running out of it.  That’s the biggest one.  And the other choices are “making mistakes with it”, which is 16.67%, “being taken advantage of”, which is a very small percentage, 5%, and then “losing it” is also 16%. And it’s funny because we live in the most prosperous country on the planet, but people are afraid of running out of it.

Dr. Susan McCarthy: Yeah, it’s interesting.  The whole IQ poll is three to get people thinking about what are their attitudes about money.  Most of us have kind of knee-jerk reactions around money, and so these are questions just to get people thinking a little bit and examining their own relationship to their money.  Fear of running out of money is a huge theme in society today.  And I think the baby boomers… here come the baby boomers, you know going into retirement, this enormous bulge in the population.  And there’s been much written about the fact that they’re sandwiched between two generations.  And I can speak personally.  I’m a baby boomer, kind of on the older end of the group, and I have a 91-year-old mother who is in wonderful health, and just doing all kinds of things and going strong.  So I have tremendous longevity in my life, and I can expect to maybe have what, 30 years maybe, beyond retirement.  And I’m not the only one.  So we’re seeing our parents live so much longer, and our parents are seeing themselves live so much longer.  My own mother has said a number of times, “I never thought I’d live this long.”  And so the fear of not having enough money is a tremendous fear.  And of course once you retire, the years of accumulating are…  they’re not absolutely over, but they’re pretty close to being over.  Now you’re going into a stage where you’re going to begin spending the money that you saved and accumulated.  So it is a major scene.  The other part of it is that health care costs are very high, and that’s the big wild card for a lot of people, is that they’re afraid they won’t have enough money for health care.  And it’s a pretty grim picture to think about not having enough money when you’re elderly.  So that is a major part of the practice of any good financial adviser is helping people evaluate whether or not they do have enough, how long their money might last, how much more they need to save, etc.  Those are the kinds of things we deal with pretty routinely.

Jason McClain: What are you most focused on right now?  I know that you’ve got a book out called More Than Wealth.  Can you…  Do you have another book coming out?

Dr. Susan McCarthy: I have another book coming out.  Thank you for asking about it.  I appreciate that.  It’ll be coming out probably, I think it’ll be around Easter time of next year.  And it takes the same theme and really develops it, of money and emotion, and how the two become so tangled, especially when we’re in the midst of some sort of major life transition or life event.  We are, right now, in the midst of one of the greatest transfers of wealth we’ve ever seen in the United States.  The experts estimate that from $41 trillion to about $136 trillion will change hands in the next decades.  So it actually began in…

Jason McClain: I just got chills!

Dr. Susan McCarthy: I’m sorry?

Jason McClain: I just got chills.

Dr. Susan McCarthy: I know, it is a massive amount of money, and that is “trillion” with a ‘t’ here.  It began in about 1998, and they estimate it will continue until the year 2052.  So that’s money coming from the older generation of people as they pass away.  It’s money coming out of retirement plans as this enormous bulge in the population retires, you know the baby boomers.  And then it’s also the baby boomers themselves passing their estates and their wealth on to their heirs.  So we have all this money in motion.  And we know, in our business, that when money goes into motion it causes anxiety.  But the good part of that… I mean therein lies the potential, because more and more and more of us are going to be dealing with fairly large money decisions.  So we have an opportunity to really step back and look at our emotions, our relationship to money, our behavior.  And I maintain it’s the opportunity of a century, because I think we have the opportunity not only to cultivate a different attitude personally, let’s say.  Let’s say you are making a decision and you don’t really like what you see as you watch yourself behave around money, but I think as a society we have an opportunity to change the very consciousness about money, because we give money value in this country that it doesn’t have.  It’s only a tool.  It doesn’t make us greedy, and it doesn’t make us better people.  It doesn’t make us smarter.  It doesn’t do any of those things.  It’s only a tool, and it’s what we make of it.  So we have the opportunity, I think, to see it as just a tool and then to use it for good.  To use it for personal growth, I believe even to use it for spiritual growth, to really dig into it and see what it means to us and then to make it what we want it to mean to us.  So that’s what I’m working on now and that’s what I’m writing about and exploring.

Jason McClain: We’re going to take another short break to support our sponsors.  I’m your host Jason McClain, here with Dr. Susan McCarthy, whom you can reach through www.DrSusan.com.  And we’ll be right back.

[break]

Jason McClain: Welcome back to Coaching the Life Coach.  I’m your host, Jason McClain, and I’m here with Dr. Susan McCarthy.  And before the break we were talking about the book that Susan’s working on, as well as the money/emotional side of your personal changes.  And Dr. McCarthy, because this really is about assisting life coaches or advisers in becoming more successful in their business, can you talk a little bit about what you would consider an important marketing strategy or an important sales strategy for them?

Dr. Susan McCarthy: A sales strategy, oh my.  I don’t know how you market the idea of listening, but I think that that’s so crucially important.  I suspect that life coaches are pretty good at it to begin with.  I would imagine that’s the case.

Jason McClain: I would hope so. [laughs]

Dr. Susan McCarthy: I would hope so too.  I think that also, to not shy away from the money issues and to allow that to be part of their businesses and their discussions with their clients.  But I think that they might want to explore it a little bit themselves first, because my experience ahs been that most people, even people who are wealthy, are really kind of blind to what their deepest attitudes towards are.  They accept what’s come down through their families very blindly, oftentimes, and rarely will actually look hard at themselves and at their money and at their behavior.  So I would say to a life coach, “If you’ve never done that for yourself, give it a try.”  And I guess, how do you do that?  There are some questions on my website that people can look at.  There are also… just ask yourself the question, “If you were to receive an enormous windfall… let’s say you really did win the lottery, and we can make it a really good lottery, let’s say a $250 million lottery.  What would you do?”  This is an exercise I do sometimes in speaking.  And of course people always say, well I would buy this, or I would buy that, or I’d pay off debt, or I’d buy my kids a home or… we can all think of things we’d like to do with extra money just right off the bat.  But the truth is if you had a big windfall like that, you could do all those things and a whole bunch more and not even hardly dip into that money.  So the second question then becomes, “If you were to receive a big windfall, never mind what you would buy and what you would do, but what would you feel in the pit of your stomach?”  And when I ask that question, people almost always say, “Fear.”  It’s almost always fear.  Fear of being taken advantage of, or fear of making some dreadful mistake, or fear of losing all your friends.  That’s an interesting one.  Fear of losing your friends if they know you have money, because somehow that makes you less of a friend or something.  If you ask yourself some of those questions, you’ll begin to want to ask yourself more questions, “Well why is that? What’s that about?”  And therein I think lies the potential.  I realize, Jason, that’s not exactly a “strategy”, and perhaps I’m not answering your question, but I think it’s a place to start.

Jason McClain: What I’m also asking is, your marketing very clearly defines what it is you do, and you have a great way to communicate that to people.  Can you talk about why that’s important and how you’ve done so well at it?

Dr. Susan McCarthy: Well, you have to be able to communicate to people what you do, in a very succinct and clear plain English way.  You know our lives are so complicated, and there’s so much information out there.  We certainly see it in the financial world.  There’s so much information available to people, and people are not necessarily smarter about it than they used to be, although I think people are maybe a little bit more well-informed than they used to be.  But there’s also this confusion factor, and it’s not just in the financial services industry.  It’s in everything.  We’re overwhelmed with information, and so to be able to speak very clearly and simply what it is you do, and to be able to say it in a very short…  You know they say the 30-second speech, the elevator speech, to be able to say it very simply, and then maybe with a little bit more detail for a one-minute speech, and then maybe with a little bit more detail for someone who’s really sitting at your conference table.  It’s vital.  It’s vital.  Many times in our business I’ve seen people be asked what they do, and hem and haw and really not be able to say.  But when people ask me what I do, and just in terms of handling people’s money, I simply say that I and my team, because we have a team, coordinate the financial lives of our clients.  And that really is what we do.  We bring it all together and help them understand everything they have, and get it all working together.

Jason McClain: And if someone were able to that clearly and that succinctly [indistinct] coordinating the front [indistinct] of your client, if they’re really, whatever it’s called, it’s really tight, it’s great. It’s clear, it’s [indistinct], it’s approachable.  What would that make possible in their business and in their lives, if they were able to communicate what it is that they do, that succinctly?

Dr. Susan McCarthy: Well of course, then you can tell anyone what you do, in sort of any situation, if you will.  And it’s a succinct description, but it’s one that maybe opens up some other questions.  You know, people say, “Well, what does that mean?”  It hopefully avoids some misunderstandings.  If I say I’m a financial advisor, for example, people don’t know: Am I a wealth planner?  Am I a financial planner?  Am I a stockbroker?  You know, there are all these terms, and it’s perhaps a little bit unclear.  So hopefully it would avoid some misunderstandings.  For example, if a person thinks that I am a “stockbroker”, they may think there are a lot of things that I don’t do.  And they are things that we do do, and we do handle for our clients.  So I think that’s important.  Let me see, what else…  It just opens the door, I think, to being able to talk to anyone about what you do, and then listen to what they have to say, and you may see some opportunities for service there.

Jason McClain: Great.  Thank you so much.  My name’s Jason McClain; I’m here with Dr. Susan McCarthy, and we’re talking about how to clearly define a way to communicate what you do.  We’re going to take a short break to support our sponsors, and we’ll be right back.

[break]

Jason McClain: Welcome back to Coaching the Life Coach.  I’m here with Dr. Susan McCarthy.  Before the break we were talking about how to clearly define what it is that you do and find a good way to communicate that to people.  And Dr. McCarthy, before… I have one final important question for you.  But before that, how can people reach you?  What services do you provide?  Where are you located geographically, if that’s important?

Dr. Susan McCarthy: I don’t know that it is that important, because in fact I deal with clients all over the country, but I am located in Oklahoma City, Oklahoma.  I think probably the easiest way to connect with me is through that DrSusan.com, the website.  You can send a message to me there.  That’s probably the simplest way, and it will give you a little bit more information as well. 

Jason McClain: I’m also noticing that you can read an excerpt from your book there.

Dr. Susan McCarthy: Yes, there’s an excerpt of the book; it’s a very interesting story, a kind of an unfortunate story, but it’s a great story.

Jason McClain: Well, one final question then, and again that website is www.DrSusan.com.  Doctor, let me just ask you what you think the single most important organizing principle or distinction you want people to be left with today.  What is that?

Dr. Susan McCarthy: I guess that I would say there is, in the world of money, and I don’t mean in the world that I work in as far as employment goes, but in dealing with our money, as we all do, there is enormous potential for growth, for personal growth, and for spiritual growth.  And if we’re willing to look at this connection between our emotions and our money, if we’re willing to look honestly at that, then we have the opportunity to step back and to cultivate any kind of relationship we want with money.  We can do good.  We can improve our lives.  We can become better financial decision-makers.  And it makes dealing with our own finances much easier.  I have a little talk that I give about “finances without fear”.  It just makes your financial life easier.  But more importantly, I think it also opens the door to extending the lessons that you learn in dealing with money to other parts of your life.  I mean if you’re looking to be a more generous person, or to experience more generosity in your life, then this is a wonderful place to start, and to literally consciously do some things that are more generous.  And you’ll see this start to snowball.  I’ve see clients do this over and over.  And then to take it a step further, I think that with this enormous shift of wealth that we’re seeing in the United States, we have an opportunity to… each one of us has an opportunity to leave a legacy with our money.  Your money speaks for you, whether you admit it or not.  And it isn’t just in how you spend it.  Your money talks for you in how you think about it, in how you behave around it, what you teach your children about it, what you build into an estate plan or into your will about your money.  All of this will speak for you.  And maybe, after you’re no longer here on the planet, you know your money speaks volumes for you.  We have an opportunity to shape that.  So when I deal, for example, with clients who are doing estate plans, we think about or I ask them to think about what is it that they want their money to say about them after they’re dead?  And then we try to build that into what they do in their estate plan, not how they spend their money, but maybe how they distribute their money, or how they talk to their children about their money, etc, things like that.  We really have an opportunity to do some marvelous things now, as all of this money starts to go into motion.  Or, we could completely miss the opportunity and just replicate the errors that we’ve had in the past.  Not that everyone makes errors; some people are amazingly conscious and aware as they deal with money.  But dealing with money is a chance to become aware.  And I think that’s the great potential that we have in our financial dealings.

Jason McClain: Thank you for your wisdom.  Thank you for your insight.

Dr. Susan McCarthy: Oh, my pleasure.

Jason McClain: I’m Jason McClain, your host, and your guide in the 21st-century marketplace, here on Coaching the Life Coach.  For transcripts of this show or any other show on the Personal Life Media Network, you visit www.PersonalLifeMedia.com, and there are two ‘L’s’ in PersonalLifeMedia.com.  You can reach me at [email protected].  We’ve been here talking with Dr. Susan McCarthy, and she’s just demonstrated an incredible amount of wisdom, and please visit her at www.DrSusan.com.  And thank you for listening, and please join us next week.

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