When it comes to money, personal finance and things of that ilk, we always jump right to the logical left brain.

"This is all about math, right?"

"Why yes, yes it is. You must do a thorough analysis and wear out the buttons on your calculator to see if any money-related activity is worthwhile. Especially when it comes to being responsible with money. You must have a sober and rational view of all things having to do with your finances."

I agree with this.

..AND

I also believe we need to use the other half of our brain too.

Some money gurus out there say things like,

"Building wealth should be boring"

"Take emotions out of your investing decisions"

"Pay off the highest interest rate loan first"

"Spend less than you earn and invest the difference"

All of these quips are very much true. But they do not tell the whole story.

The reason I use the word "story" is because that is how we tend to think as human beings. We tell ourselves stories and fables to make sense of the world; more specifically, to try to define the "why" we do what we do. We are equally driven by logic AND emotions. We are not Vulcans (as much as some of us want to be..)

So having empowering and useful "stories" can be super helpful when it comes to good money management habits. I believe we SHOULD leverage our emotions when it comes to money.

Money emotions

Many people will immediately come up with a long list of NEGATIVE emotions surrounding money. Their relationship with wealth is usually somewhat complicated. Our parents told us that money doesn't grow on trees. We may have even seen our folks argue and stress about money. Common attitudes prevail such as,

"There's too much month at the end of the money"

"Trying to make ends meet"

It goes on and on.,

My theory is we are so emotional about money because it represents survival itself. We need it to live. In our western society nothing is free. We need money for the basics - food, shelter clothing. In some western countries you also need money for health care and education. This is a reality that is hard to swallow, especially if you have an unhealthy emotional relationship with money.

Make friends with money

Money is neither good nor bad. It is just a means of exchange and a representation of value. You can do good with it and you can do evil with it equally well. Money doesn't care.

One of my tenets that I constantly preach to my readers is - you should be in control of your money.

This has a few connotations but here is what I mean

You should always have a proactive approach to your money. You should never feel like a victim when it comes to finances. You are ALWAYS in control.

This means,

You are in control of what you earn.
You are in control of what you spend
You are in control of how and where you invest
You are in control of keeping track of your money
You are in control of your plan

If you feel like any of the above are out of your control, you are not taking responsibility for your financial life. You MUST change your attitude about these ideas and you MUST do it now. The truth is, you are ALWAYS in control of the above. You are the master of your life. Both hemispheres of your brain will benefit from this ownership mindset.

2. Even if you rely on someone else to do your investing and/or money management, you should ALWAYS be very aware of what is going on. Sticking your head in the sand is not safe, nor healthy. As Oprah Winfrey said,

"Always sign your own checks"

Right brain leverage

Since we are not completely logical creatures, we need to find a way to use our "human tendencies" to help us in our financial journey. Instead of letting right-brain emotions sabotage all of our left-brain's hard work, let's give it a supporting role.

I have heard that the psychology of winning has been studied extensively and they have come up with some interesting nuggets that we can use in our journey to financial freedom.

Winning is contagious

This doesn't mean what you think it means. Other people will not "catch" winning from you. This contagion means it permits every aspect of your life. It creates a sort of momentum that drives and accelerates you mentally, emotionally and physically. This is why sports teams tend to experience "winning streaks". Winning builds upon itself. Winning creates a mindset that leans towards expecting to win. You gain confidence and know-how. You tend to drive in the direction you are looking.

So my suggestion is this. Figure out what the best financial plan is for you to get to where you want to go, and then do it. Do it consistently and without deviation. Here is the key point:

The scale at what you do it is irrelevant. If you invest 1 dollar a month into the plan you win. If you receive $0.03 in passive income you win. If you spend 1 dollar less than you brought home you win. The feeling of these "wins" is the same whether it is a large or small amount. You are doing it. This is all that matters. You are doing what the 1% do everyday. This makes you a winner. The scale at which you are winning is an after-effect of your behaviours.

As you gain experience, confidence and momentum, you can then increase your investment to 2 dollars a month,. It doesn't matter. By stringing together enough wins in a row you are building up a mindset and habitual behaviour that will keep building momentum until you are unstoppable.

2. Systems, not goals

I heard recently a person explaining that you should be more interested in building systems instead of setting goals. This has wisdom on so many levels.

You can only change your life if YOU change
Only YOU can change your life
The journey is the destination
The path to success is where you will find it.
Your daily, monthly and yearly habits will determine your outcomes. Nothing else will.

There is power in building good habits. A habit is something you do consistently enough that you don't have to think about it anymore. You just do it. It seems to take very little willpower or effort once you have it ingrained in your psyche. This is how you can become rich. Make investing and good money habits a part of your life and you will eventually not be able to do anything else. You will always be growing and nurturing your fortune and it will seem to be effortless. Plus, the added bonus that will ensure you stick to it is the feeling you get when you work your plan. Receiving income from your investments feels awesome.

The common factor that is shared by most successful people is having long-term perspective. When your plan spans several years, even decades, you will achieve something worthwhile. Get-rich-quick is not realistic. In our fast-paced modern world we are led to believe that everything should be instant and on-demand. We believe that we should be able to press a button on our smartphone and have anything we want magically appear. Sadly, this is not the case with anything of real value.

Long-term perspective allows us to create good habits that we adhere to without seeing any reward for a long time. We invest our dollar a month for years without seeing any significant returns - yet, insidiously, the cumulative effects are manyfold. We are improving our bank account, our mindset, our habits, our emotional set point and a host of other human sounding things.

We are building the habit of winning over and over again, and creating a system to get us where want to go. This effort become a habit. Not just a behavioural habit, but a thinking habit too. Since we have trained ourselves to make consistently good decisions with money and keep working our system, in the event we start to earn more money, or receive an inheritance or anything that increases our cash on hand, we automatically do the right thing with it. We don't blow it on a new ski-doo. We don't take a luxury vacation or upgrade our lifestyle. We invest it in our system and keep going along. We can't see any other option. This is the power behind creating a system and sticking to it.

Emotions

Building wealth feels good, It really does. I enjoy every single cent I receive from my investments. Yes receiving money feels good, but the really deep emotional contentment occurs because I am responsible for that passive income. I made the decision to invest my money and I made the appropriate sacrifices to make it work. I created the system and I am reaping the rewards. This feeling is unbeatable. Feeling like you have sovereignty over your life is amazing and I'm here to tell you it is yours for the taking. You can create that feeling for yourself just by doing the right things. The scale at which you do them will not diminish the feeling these behaviours create. Being able to say to yourself,

"I invest my money every month in dividend-bearing blue-chip stocks, no matter what, and I receive passive income on a regular basis whether I work or not"

I don't know how you can possibly feel anything but pride and joy when you utter this phrase and it is true. You are not only creating a fortune, you are creating a feeling. You are creating a state of being. You are a human and we are driven my emotions as much as logic so why not create a system that caters to both?

This paradigm is the reason I always say it is better to invest than to pay down debt if you come into extra money. Not for the mathematical advantages, but for the emotional and psychological advantages. It far more compelling and has far greater long-term impact to build a cash-flowing investment portfolio than to have less debt.

So use your emotions. Each of us has a different reason why we do anything. There is no ONE right way to achieve financial freedom, and one size does not fit all. If you tend towards emotions more than logic there is a way. Just use the tools (gifts) that you have and you can achieve success.

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