As Swiss psychologist Carl Jung said, “Until you make the unconscious conscious, it will dictate your life.” Our relationship with money is often driven by beliefs formed long before we enter the world of investing. Most clients are unable to articulate their money beliefs because they operate within their own awareness. Yet these beliefs are powerful, deeply rooted, and guide behavior.
For example, children from homes where resources were inadequate or unstable typically develop implicit scarcity beliefs and worries about “never having enough.” As adult investors, this belief can manifest as over-control of finances or excessive focus on performance and growth – even if they are wealthy.
Equally, another child raised in similar circumstances may develop the opposite belief: It is better to spend it now, because it may not be left later. The external circumstances are similar, but the internal narrative – and therefore the financial behavior – can be quite different.
Many of our beliefs about money are established early in life, although some emerge later through important life experiences.
An advisor shared an experience with an ultra-high-net-worth widowed client who had long demonstrated a pattern of extreme frugality and strict financial control. Despite the two wealth management teams providing their insights, the advisor’s team revealed that the client’s financial behaviors were driven by a deep sense of responsibility to protect their late partner’s legacy. Faith: “If I change, I will be unfaithful.” With gentle probing, the consultant led a meaningful conversation that resulted in the client’s openness to change.
Many of our beliefs are inherited patterns shaped by our family of origin, and while these internalized beliefs form the foundation of our financial decisions, much of our relationship with money is also influenced by the models we learn from our parents.
