Spending Without Thinking

Patterned Behavior | April 21, 2011

Do you know what causes the biggest waste of your money? Impulse.

All successful savers and investors have one thing in common. That is? Impulse control.

When is the last time you stopped and had a 10 second conversation with yourself about what you were about to buy? People love to solve their problems (is it really solved?) as quickly as possible so that they don’t have to think about it anymore. Why is it so difficult for everyone to delay decision making where it pertains to spending money? Isn’t that what has our Country in trouble right now? You know, road rage and impulse spending are caused by the same mechanism. In both cases, your inability to control yourself is the cause of the problem. So what if someone drifted into your lane? You’re fine. Do you really need to chase him down and tell him what you think? So what if you are getting tired of your car? Do you really need to go to the dealership today and replace it?

If you answered yes to either of those questions, I feel sorry for you. I also know in my heart that you can change. I’ve seen it happen many times. Is today your day? What do you need to do to take the first step? Do you need to get in an accident? Do you need to be arrested? Do you need to lose your house, go broke or compromise your future? Or can you simply begin today to take responsibility for your actions? Can you act like a fully functional adult? Can you control your impulse?

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History and Control

Patterned Behavior, The Psychology of Money | February 25, 2011

Two major keys to your financial success are tied to history and control. Understanding both can lead you to where you want to be financially. The question is…….will you study history (yours and the market’s) and will you give up control?

Typically, the most difficult people to convert to a new way of thinking are those that are most in need of a new way to think. Folks that do not save or invest their money wake up one day to find that for all of their hard work, they have nothing to show for it in the form of savings. You might think that would lead to an epiphany. “I need to start saving now. I need to start investing now.” Unfortunately, it usually doesn’t happen that way. Too often, people become embarrassed about the position that they find themselves in. They may even become depressed. Embarrassment and depression usually lead to inaction or coverup or worse of all, justification. “I couldn’t save because (insert reason here).”

A few years pass and the cycle starts again. No different than how most people diet or exercise. Cure one and you cure them all. Think about your habits. Commit to changing them. Live with the discomfort (it’s temporary – trust me, been there many times) and allow your nervous system to be reset. In the meantime, try to stop using a lack of knowledge as a roadblock for beginning the process. Hire an investment advisor, a trainer and a nutritionist. Don’t over worry if they are the right one. Use your gut. You can always change advisors later if you don’t feel synergistic with them. Getting into the process is the most important part. Start today and you’ll be one day closer to your goals. Don’t and you’ll be one day further away from your goals and your true self.

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The Other Half of the Story

Patterned Behavior | November 4, 2010

Have you ever sat back and listened, really listened, to the half stories that are presented to you every day in the media?

What is a half story? You know, when the person selling something only tells you the part that sounds good and leaves out all of the rest. I think you may know what I’m talking about if I call it what it really is……….a lie by omission.

If you pay close attention, you will begin to see this pattern everywhere. It is damaging, deceitful and wrong. And the worst part? You do it too.

Whenever you have a regularly accepted way of doing something, you have a half story. Here is how it works. Someone ( advertisers, media, corporations, groups etc.) create a message. The message is intended to create action. It is typically worded in a manner that has the following characteristics:

1) It is brief

2) It is easy to remember

3) It requires minimal thought from the listener (You)

4) It requests immediate action from the listener (You again.)

5) It always includes a half story that claims to cure your problem (The one you didn’t know you had).

Examples? Sure. I love examples.

Realtors: “Now is a great time to buy!”

Automobile Dealers: “Get top dollar for your trade in!”

Retailers: “Buy now and make no payments for 1 year!”

“One day only!”   “Buy one, get the other half off!”  “Dress up like a boa constrictor and get 10% off admission!” Ok, I made up the last one but I’m almost certain that you’ll hear that one used soon.

You get my drift?

Oh yeah. And now for the part where I explain how you do it too. You do do it, don’t you?  Do you mindlessly repeat what you hear to all of your friends? Maybe a little reminder would help to jog your memory?

“OMG! 3rd pair free sale tomorrow at the mall. Want to come with?”

“Bro. $3 pints and free mini wings tonight at Drunky’s. Wanna go? It’ll be awesome!”

And therein lies the problem. You see, whatever it is that you do you become susceptible to. It’s a very simple reality. You may not have control over the marketers but you do (or you could) have control over yourself. So if you don’t want to be marketed to, stop marketing to others. Stop telling your wife what a great deal you got on the jet ski and then get mad about the new shoes she just bought.

C’mon Dino. I understand your point but I love sales! I just can’t resist saving money!

I hear you. Well, here is something for you to consider until next time. How can you save money by spending it?

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Losing while winning

The Psychology of Money | October 26, 2010
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The Style of Your Life

The Psychology of Money | October 9, 2010

Have you noticed how commercials have changed over the years? Way back when, commercials used to show a product and let you know of it’s existence. The idea was to increase sales of the product by increasing awareness. Soon, that ad type was replaced by product spokespeople. You know, a famous entertainer or athlete telling you how they love to use the product. The hope was to get you to buy the product so you could be just like Mr.or Mrs. Cool. The approach continued to evolve (or devolve if you ask me), bringing us to today’s advertising style. The product has once again become the star, but in an entirely different way. The product is now going to save your life. So much so that the focus of the ad is not the product itself, but an illustration of how many women would love to party with you (beer). How much fun you’ll have running all over the earth with your grandchildren (drugs). And how envied you’ll be by women and how sought after you’ll be by men if you just buy our (clothes, lipstick, accessories).

Now, if you pay really close attention, you’ll notice that when you are at a party and you crack open your favorite beverage, seldom does it lead to all of the pretty women in the room running over to talk with you. And ladies, I’m sorry to tell you this but, men have no idea that you even have a purse (unless it is your husband, because that is where he likes to keep his keys and wallet so he doesn’t have to carry them around in his pockets all night). The truth is that advertisers know that if they can create a lifestyle statement that you can relate to, they can get you to buy their product ,which represents the lifestyle that you want. So, do you fall for it?

Most likely you do. Well, I would like to point out the part of the commercial that is missing. The part they don’t tell you about is your retirement lifestyle.

Commercials are made in order to get you to act today. Get excited! Right now. Don’t think about it. Just do it. If you call now we’ll throw in this special, operators are standing by, rush delivery, limited availability.

Retirement investing is the exact opposite. It is methodical and mundane. It is redundant. It is totally not exciting. UNTIL YOU RETIRE! Then it is fun! When you are actually spending time with your grandchildren because you have the time to spend with your grandchildren, that’s fun. When you travel with your spouse to far away places that you have always dreamed about seeing. That’s exciting. When you look at your account and know in your heart that you will be financially secure no matter how long you live. That’s powerful. And peaceful. And that is how it should and could be.

Here are the latest statistics: People are living longer. You are going to need enough money when you retire to last you for 30 to 40 years. Not only that, but most people are not willing to change their lifestyle very much. So you’ll need enough savings to keep your current standard of living for 30 years beyond your last day at work. Wow, this is getting tricky. Oh yeah, there is one more little item to consider. Assuming a 4% annualized rate of inflation, the cost of goods and services will triple over the next 3o years.

So your morning coffee and bagel will jump from $5 today to around $15 thirty years from now. Mmmmm, appetizing!

So how do you make sure you have enough later? Simple. Start saving now. As much as you can. Every time you buy anything ask yourself if it is worth your future peace. Because that is the price you’ll be paying.

And don’t trick yourself. So many people put money in a savings account and then take some out later for “emergencies” like little Bobby’s birthday present. Hey, little Bobby deserves a present on his birthday but, if he’s not your little Bobby it sure isn’t an emergency (go back and read “Learn to Unjustify if you haven’t already).

What you need is a dedicated investment account and a dedicated investment advisor. Money goes in and never comes out (you have a separate emergency account for things that pop up). This is an account that you contribute to regularly and aggressively. You learn to feel good about contributing to it. It makes you feel powerful and proud. It enables you to retire and enjoy life.

So do it now! Unless of course you are tied up in an interesting conversation with a bevy of beautiful women that love you for your beer.

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What you need right now

How to Negotiate | September 30, 2010

“Just a little patience” – Axl Rose (Well, Izzy Stradlin really, but who would remember it without Axl?)


Patience: The capacity to accept or tolerate delay, trouble or suffering without getting angry or upset


I get asked the following question a lot so I thought I’d answer it publicly.

“Dino, what is the one thing that a person must have if they want to be financially successful?” The answer?  Many things. But if I had to pick one, it would be patience.

A lack of patience puts you in a bad place, not just financially, but in everything you do. If you are not patient, you automatically and autonomically change your goals without even being aware of it.

Sure, you may think your goal is to negotiate a great price for yourself on a new purchase. But in truth, a lack of patience automatically turns your goal into “finishing the process quickly.” You may not recognize that. You may not feel it happening. But I can assure you that it is happening. Not only that. Each time you show a lack of patience in negotiation (or anything else), you are reinforcing one of the most damaging processes there is.

A lack of patience has become a universal affliction. We see it in government. We see it in business. We see it in communities and we see it in people. Usually, the only place that we don’t see it is in ourselves. The interesting thing is that other people see it clearly in you. Even when they don’t, they make an educated bet that you do not have patience. You don’t believe me?

Why do you think you have to push buttons and wait on hold to get “customer service”?

Why do you think the salesman at the car dealership asks you to wait while he “speaks with a manager”?  Why do you think he repeats that process each time anything new comes up?

Why does a realtor tell a buyer “this house won’t last” without mentioning how long it has already lasted?

You know why. Because they are playing the percentages with you. Because most likely it will work. And if it doesn’t? They’ll try again next time because eventually you will succumb to your lack of patience. At some point, you will have the process dictate to you rather than you dictating the process. Isn’t that sad? Not just what people do to you but what you do to people.

You do it too. If you want something or are selling something, you use the same technique because you inherently know that it works. And it is in this way that we all participate in the perpetuation of the lack of patience in society. If you want to learn patience you better figure out how to do it. You must start by being patient with yourself. You need to not criticize yourself for being whatever it is that you keep telling yourself that you are. You need to learn to be able to enjoy the process. Life is filled with ups, downs and sometimes sideways. That’s the fact. Start by accepting that and go from there. Try yoga or meditation or tai chi or visualization. It is sometimes comical when I suggest that and the response I get is “I don’t have time for that”. Yup….and here we are and here we will be until you do.

In the meantime, make a deal with yourself. Any time you decide to buy something, do this. Resolve to walk away from any deal, product or service in which the salesperson uses the lack of patience technique on you. And one more thing……….. keep this in mind and use it regularly “If you need an answer today, the answer is no.” Doing this will most likely make you very uncomfortable. Good! That is a sign of true change happening. And remember, your job is not to end the process as quickly as you can. Your job, is to become comfortable with being uncomfortable. If you can master that, then you have something that no one would ever be able to sell you.

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Financial Success

The Psychology of Money | September 17, 2010

“Success is uncommon. Therefore, it cannot be enjoyed by a common person.” – Unknown

Do you have what it takes to be financially successful? Do you know what it means to be financially successful? If you think earning or having a lot of money makes you a financial success, well……. you may have some changes to make.

The simple act of earning or possessing money does not constitute financial success. Earning and possessing money tends to be a very dynamic and often transient process. We all know someone that has more than we do. It doesn’t matter how much you have, there are others with more. Money that is. The interesting thing is that more often than not, I find that the folks with the most money also have the most problems. That is where today’s quote comes in.

It is quite common to have a lot of money. If you live in America and you are reading this on your computer or smartphone, then you have more money than most of the rest of the world’s inhabitants. But you probably don’t see that. If you are like most people in our society, you see only what you don’t have. It is highly likely that the things you do have are often taken for granted. Their importance to your daily existence is not regularly acknowledged. For most of the people that I see professionally, the root cause of the problems that they bring to me is usually related to lack of gratitude. These are nice people. Well thought of in the community. They have plenty of money and could have excellent financial positions. Unfortunately, often they don’t because their focus is on what they don’t have instead of what they do have. They think about “compounding” rather than “methodically growing”. The former requires risk taking. The latter patience.

Who has time for patience when the Jones’ and the Smith’s are pulling ahead? Or are they?

I wonder if you have ever actually taken the time to think about these two things?

1) Are my friends, co workers and neighbors actually doing better than I am financially because they have a nicer car and go on more vacations? Or, is it possible that they just spend a lot more money than I do in order to look or feel more successful than they are?

2) Why am I impacted by what friends, co workers and neighbors do?

Truly, only the second question is relevant to someone seeking success. I only mention the first in order to illustrate a point. It is so easy to assume that everyone else is doing better than you when you focus on material things as a way of keeping score. True financial success is financial security. My definition of financial security is: having the things you need, a few things you really want and enough money to confidently keep you in that state moving forward. If you have more than that, good for you. But you don’t need more than that. Acknowledging that fact is the first step in financial success.

So here is a thought to consider…….. If just for today you were able to let go of chasing money, what else would you have time for?

True financial success is having the money you need, not the money you want. True financial success allows you to do the things in life that are important to you. If you agree, then it is time to change. It is time to acknowledge. It is time to reset your goals. Mostly, it is time to start saving more and spending less. Because while your friends and neighbors are buying the things they want, you can be confidently saving for the thing you really need………. time.  You see, it is possible to buy time. It is just highly uncommon.

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“Simplicity is the Ultimate Sophistication”

The Psychology of Money | September 3, 2010

The title of today’s entry is a quote made famous by Leonardo Da Vinci. It seems that even back in Leonardo’s day, people were faced with too many choices, too many possessions and too much to think about. I wonder what Mr. Da Vinci would think if he were alive today? Maybe he is and he is trying to tell us the same thing through another medium? If so, the word’s “I told you so” must be a part of his presentation. There is no doubt that choices create paralysis. People want simple. Don’t you?

If you answered yes, then why do things often seem so complex? Have you ever thought about that?

Let me explain one answer to you. It’s on purpose. Laws are purposely written to be confusing. Then you’ll need a lawyer to translate for you. Who wrote the laws? Lawyers did.

Oh, did you think that was a coincidence?

Did you know that there are millions of people that keep their money either in cash under their bed or in a bank account that gives them basically the same return as if they kept their money under their bed? Why? Simple. Because they don’t know what to do with their money. Why? Because they are scared. Why? Because they are confused. Why? Too many choices.

So in order to delay feeling the fear they delay making a decision. Do you do this?

Since you come here for advice, let me give you some. Change your thinking. Every day that goes by with your money in a bank account is another wasted financial opportunity. If you were investing in quality stocks right now (rather than in your stagnant bank account) you would be making progress even if the market was going down. Why? Simple.

Even in a declining stock market, an investor is making progress because he is picking up quality stock at reasonable prices. The more you buy at lower prices, the more you’ll make later when values go up. And they always do. Did I just say “always”. Yes I did. I didn’t say they “only” go up. I said they “always” go up. And anything that goes up, must eventually come down. If you have been following the action, then you know the market has been down from it’s highs of the past few years. Does it make sense that you would buy “low” and sell “high”? If so, now is the time to be buying. You buy when the market is low. You sell when the market is high. Simple. Even more simple is that if you had a good broker doing it for you, it would be getting done with no need for you to do anything but contribute some money regularly.

Could it be any simpler than that?

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Magic Question

The Psychology of Money | August 27, 2010

If you are a regular reader of my work, then you are aware that I have spent a lot of time pointing out things that require changes in behavior. The reason for this is that it is very difficult to go East and West at the same time. When all of your thoughts, efforts and momentum are moving together in one direction, you’ll find the most success. With that logic in mind, I am encouraging you to get rid of everything you don’t need so that you can take stock of what you want and begin taking the steps necessary to get there.

Since this is a financial blog, we’ll apply it to money. As always, feel free to use the information on any area of your life. Good practices and positive change are applicable to any life situation.

So….. What can you live without? If you look closely, I’ll bet that you can find a long list of things, purchases, habits and rituals that cost you a lot of money but do not contribute to your happiness, health or well being. Do you need to eat out as often as you do? How many cups of coffee do you buy every week? Have you ever taken the time to add up the total cost of your coffee habit on a yearly basis? Do you give yourself a monthly cash allowance for spending or do you just visit the ATM machine whenever you desire money without any real concern for how much you have taken? Maybe you shop just to shop? Do you buy groceries without a list? If it looks good, do you buy it, whether you need it or not?

Why point these things out? Great question. The answer is that over the last 20 years, these are the types of questions that I have been asking the clients that hire me to help them become financially successful. I ask these questions in response to most clients insistence that they have no money to invest because “all of the money I make goes toward paying my bills and living expenses.” That may be true. Next question – “”Give me an exact breakdown of what your bills and living expenses are on a monthly basis.”

That always brings us to the original questions above. It is always quite interesting to see the reactions that these questions elicit. There are always so many things that we find that can be easily eliminated simply by paying attention and asking one simple magic question … “Do I really need this?”

Some clients go to great lengths to explain their “need” for coffee, music or a new app for their smart phone. And to be clear, I’m not saying that there is no room in your life for these things. I’m simply espousing that none of them should be classified as a need. Wants yes. Needs no. The list of needs is actually very short for most of us. Food, water, shelter, reliable transportation, exercise, sleep, security and an extra large serving of love. Why did I not put “money” on that list? Well, for most American’s, money is not a need. it is simply a means to an end. If money were a need, you would hold on to most of yours (you know, in case later on you ever “needed” it). The truth is that unless you change your views about what you need vs. what you want, you’ll never have enough financially. And that is true no matter how much you make.

If this makes sense to you, start taking the time to ask yourself the magic question before you buy anything. If the answer is yes then go ahead and buy it. If the answer is no, then walk away. When you master this, you’ll gain control over marketing and ingrained habit. In addition, you’ll start to see a balance in your bank account.

Once you commit to getting yourself to that point. I’ll show you how to grow your wealth. So go ahead. You first.

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Learn to Unjustify

The Psychology of Money | August 18, 2010

How many times in your life have you justified?

You know, doing something and then having a conversation with yourself about why it was a good thing to do. Hundreds? Thousands? Still doing it?

Dino’s Advice? Stop.

Anytime you find yourself justifying things, you are most likely taking an action that should not be taken. Think about it. When you do something right or good or pleasant or compassionate, do you justify your action? Of course not. Want proof? When you hold the door for an older person, do you mutter to yourself ” I could be walking in the building already but I suppose I’ll hold the door for this person because they are old and I’d feel bad if I didn’t hold it?” Probably not. If you are a door holder, you hold the door because it is a nice and courteous thing to do. It makes you feel good. It shows good manners. It requires no justification.

Contrast that with “I really can’t afford this dress but I haven’t bought myself a dress in months and it’s so cute.” Or, ” This car costs more than I should spend but I’ll just spend less on other things later to make up for it.” Isn’t it simple to see that everything up until the word “but” is the truth and everything after is the justification? Isn’t it also easy to see that the justifications are silly?

I just read that Abercrombie and Fitch has discounted many of their jeans by 40% in order to grab a larger share of the back to school market. That news undoubtedly will make many people happy and they’ll go out and buy 4 pairs because of the discount. I wonder if they will stop long enough to think about this……. How long has Abercrombie been selling their jeans at a price 40% more than today’s price? Also, if they can make a fair profit at this new price, how did they justify the 40% higher price in the past? Oh wait, they didn’t justify the higher price. You did. And when you stopped, they lowered the price. And they are hoping that the lower price will cause you to justify buying more than you need. Will you?

Justification costs people billions of dollars in impulse purchases. My question? How come there is no such term as “Impulse Investing?” Wouldn’t it be great if we were all walking around saying “You know, I really should buy a bunch of new things that I don’t need but I just can’t resist contributing more money to my investment account because I think it is so cute when the balance goes up?”

If you have trouble not justifying everything, try changing what you justify. Start justifying why you should save more and spend less. Once you get in the habit it becomes easy. Just like it is now easy to spend too much because that is your current habit. And while you’re at it, stop listening to the government justify why it is your responsibility to spend your way to economic recovery. Save your money. Invest wisely. You work too hard to waste it.

Oh, and if we all wait, those jeans will soon be 50% off.

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