After all these years in the investments industry, I thought that I’d become irreversibly conditioned to keep all emotion out of the wealth creation process. For example, do you have any idea how many of these hope-greed-denial-fear slides I’ve seen in fund manager presentations?

What it’s trying to depict graphically, is how emotion distorts what should be the fairly straight, upward-sloping line of share prices growing with inflation and domestic economic output. An upward-sloping straight line is what you’d expect from a rational market; the curvy graph is how the market actually grows and declines due to irrational reactions and/or corrections over the short term. Investors’ euphoria or greed causes share (or property) bubbles. This means that investors sometimes end up hugely over-paying for an asset, leading to such a diminished return on their investments, that they would have done better by just leaving their money in a bank account.

So, for years I’ve believed that bringing emotion into your financial plans is always a bad idea. Until I recently read Kiki Theo’s Money Alchemy and had a slight change of heart. Firstly, she points out that wealth is a feeling. While Investec Private Bank may think you have too little assets to become one of their high net worth clients, you may feel wealthy because you have no debt, ample income for your needs and, in reality, no financial worries. Wealth is relative – not a new concept at all.

But Kiki takes the idea of wealth as a feeling a step further. She uses feeling to take you to a place of wealth. If you feel that you haven’t reached the end of your wealth journey yet, how then would that destination feel to you? Is it the feeling of safety when you switch of the lights in your children’s bedroom at night and know that you can provide in all their material needs? Or is it more the excitement of knowing you can catch any plane to a dream destination of your choice at any time, because there is plenty of cash in the bank for luxuries? Focus on that feeling. Hold it in your heart for a few seconds every day.

For the first time, the roots of the word emotion, which loosely translate to energy in motion, make sense to me. Rather than a force to be suppressed, emotion can be a powerful force that carries you to your dream destination, financially and beyond.

Tags: investor emotion money alchemy kiki theo neurolinguistic programming

This entry was posted on Friday, March 27th, 2009 at 8:08 am and is filed under Ambition, Personal development. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.