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Master Your Money Type
By Jordan E. Goodman

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 Master Your Money Type

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Master Your Money Type
By Jordan E. Goodman
ISBN: 0446695785
Genre: Business & Money

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Chapter Excerpt from: Master Your Money Type , by Jordan E. Goodman


The Money Type Promise

People always ask me where the money is. The other day, after signing off from my phone-in radio show, I opened an e-mail from a young Tennessee woman with just such a request. Her story struck me as both poignant and typical of what so many people are going through in their efforts to better handle their money. It went like this.

"It's been one of those rough years," Holly wrote. "I've had a shopping problem that my husband and I attacked head-on and have, for the time being, been able to control. I leave my credit and debit cards with him so I only buy what we absolutely need on a day-to-day basis. Unfortunately, he didn't get hold of my cards before I ran us into serious debt. Now we are trying to dig out of the $10,000 I owe plus pay off some costly repairs on our roof. I feel like I've laid my head on a chopping block and now the ax is swinging. How can we deal with debt? Who can help us catch up? Frankly, I'd just like to run away. I'm terrified."

I was particularly struck by this e-mail for one reason. Holly's "rough year" sounded all too familiar. I felt as if I'd heard about it, or variations on the theme, many, many times before from people all over America who also seem unable to manage their resources. Naturally, the details are different, but the urgency, and the sense of feeling lost about money issues, were the same. Consider:

• Peter from Florida, running a small, successful real estate firm who is consumed with worry about how to save for his children's college education.

• Frank and Ellen from New Jersey, who are living so close to the vest they can hardly make it from payday to payday while sitting on a pile of savings they are too afraid to touch.

• Maria, a devoted government employee from Alabama, living well within her means but feeling frustrated by her unrealized dreams.

• Sam, a California freelance graphic artist who is in demand but can't figure out where all the money he takes in is going.

One thing is true: People everywhere work hard and want to live better. Often, they can overextend themselves in their desire "to live the dream" and then get caught with bills they can't pay. Or they are doing well but live with the fear that they may lose it all-and may not have any idea how to manage what they have to improve their lives.

In more than two decades as a financial commentator on radio and TV, a lecturer, author, and Wall Street correspondent for Money magazine, I've spoken to and advised thousands of people-some successful, some struggling-on how to solve money questions. But no matter where these people fell on the continuum between haves and have-nots, I realized that I was speaking to many of the same individuals over and over again, people who were asking me for the same advice for the exact same financial problems.

Obviously, they were not following my advice, yet they kept contacting me! What was going on? I had to be missing something. At first, I thought it was simply a matter of answering greater attention to detail.

Determined to help, I would enthusiastically explore the details of their situation and offer carefully considered financial advice tailor-made for that person's income, holdings, responsibilities, and needs. Truly, it seemed to me, all these people needed was sound advice from an attentive financial expert for them to make some significant changes with their finances. But I know now that expertise alone isn't the answer. I finally realized that the "What do I do now?" to which I'd been responding with such optimistic fervor was actually only the first half of the question. The second half is, ". . . given how I feel about money."

I realized that for people to put into effect the best financial advice specific to them, they-and I-had to recognize and understand their complicated feelings about money. I began listening even more closely to the questions I was being asked and became aware there was an intense emotional subtext behind every comment or request for advice. Rarely were these words uttered exactly, but I could hear the emotional subtext-loud and clear.

• "I don't want to end up on the street."

• "I know if I take one more chance, I'll hit the jackpot and have everything I've ever wanted."

• "I feel comfortable financially, but I keep thinking . . . is this all I dare wish for?"

• "I don't know a thing about managing money, and whenever I try, I feel like a moron!"

It occurred to me that people ask the same questions about money because they tend to keep dealing with money the same way-the only way that feels familiar. That made sense, in its way. People also operate from experiences and messages given to them in their past and what they learn along the way. These influences clearly hinder how they deal with money now. This also made sense, and I suddenly knew I'd hit on my answer at last: Everyone's money behavior falls into definable patterns.

Everyone, including you, has some kind of "financial personality"- a style of handling money that reflects everything from the deepest fears to the most heartfelt desires to basic practical dealings on a day-to-day basis. The problem with the people asking those same questions was that they weren't looking at what they felt about money-those very powerful emotional connections just below the surface that drive their decisions. And so they continually make the same mistakes, unable to break away from their usual way of money management to find the prosperity or sense of security-or both-they all craved. Furthermore, this was why they couldn't follow or create a financial plan that might actually work.

I considered the complexity of the money-and-emotion equation, and knew I had to find a way for you to better understand your "financial personality." When you did, your fears about money would lessen and your strengths and creativity with money could grow. What could I do to make these goals happen for you? People came from diverse backgrounds and had different feelings, different values, and different personal histories. Clearly there wouldn't be just one solution.

I wanted to create some sort of simple process wherein I could help you, no matter what your background, beliefs, or present financial situation. I wanted to reconcile money information (what you need to know about managing money itself) with your money attitudes (what you need to know about your feelings and fears about money) so that you could emerge feeling secure and more confident about money, for now and for the future. This became my mission.

This book grew out of my determination to find effective answers to your money questions in a way that would be meaningful. The result is this guide to mastering your Money Type. The key to real life-changing financial success for you can lie within these types. I'll show you how very shortly.

First let's talk about money and what it means to you.

Everyone gives money all sorts of meanings beyond the value of the goods or services it can buy. Why do some people idolize money while others reject it? Why are yet others afraid of money or believe that wanting it is an unworthy or even shameful goal? Why do some people kill for money or kill themselves if they lose it all? Why do close relatives, spouses, or friends become enemies over one's "rightful share" of the money?

The answers are within every life story-the way your answers can be found within your story. Maybe your parents were stingy with you or generous to a fault. Perhaps you were told that life is tough, money is limited, and that you should be grateful for the money you get. Then again, maybe you were raised to believe that the world was bountiful and that the bounty would have your name on it.

Whatever you were told and whatever you believe, no matter how contradictory, one thing is true for all of us: Money is never just money but a repository for our deepest fears, doubts, insecurities, anxieties, aggressive impulses, and even sense of self. All these feelings can influence and even dominate how you manage money. There is always an emotional component to money. When you think about money, how do you feel? Deserving, powerful, confused, secure, happy, insatiable, entitled, guilty, corrupt, fearful?

More important, your attitudes about money can affect and drive your financial aspirations. If, for example, you have a strong conviction that you will always have money, you'll do everything you can to earn more or take the kind of investment risks that will provide financial prosperity. I recently spoke to a woman who said she figured out that she had "ten pockets" from which she could either put in or take out money. That is, she had a job, but she also invested in a friend's business for a share, rented out the family cottage for the summer, as well as having a trusted broker who guided her investment pockets, and so on. For her, security was all-important, and she made every effort to build it.

Perhaps you feel the opposite. You believe your fate is to struggle and never have enough. In this case, you may be in debt and have a poverty mentality that keeps you broke. I got an e-mail from a family man in his forties who said he "hated money matters" and that he couldn't figure out how to make his salary stretch. He said he wanted to "pursue the American Dream," but for him, "it turned into a Financial Survival Nightmare." For this man, the quest for more money will always go hand in hand with hating the details of acquiring and keeping it.

Or perhaps a sense of personal powerlessness stands in the way of financial planning, thus leading to a disastrous retirement fund. I get so many letters that tell me how much you want to know about saving for a specific goal, but you feel intimidated by the information-and most of all, fearful that you cannot learn how to do it. When you believe that money management is elitist or arcane and beyond your scope, well, as the saying goes, "If you believe you can't, you're right!" Believe you can.

In this book, I'll help you uncover your dominant money values, attitudes, and behavior and pinpoint what emotional baggage is standing in the way of you improving your finances. Identifying your emotional baggage helps you understand the motivation and emotions behind your money behavior. This involves self-awareness-what is really happening in your money life, not what you want or don't want or can't admit is happening. It is about making peace with the past and finally letting yourself master how money works and can work for you.


As psychologists tell me, awareness of the emotional impact of an event is the first step toward healing. Denial keeps you where you are and promotes inaction. It takes a little courage to look back, but it has a big payoff: You're relieved of a lifelong burden that is of no use to you. You need to go back and track your emotional history and, hopefully, identify the defining moment or trauma that you keep reliving.

Awareness makes it safer for you to explore practical financial strategies you might not have been able to attempt before. Once you understand your traits, you can take optimal action to improve your entire Money Type profile. You can set goals based on your strengths with money that will help you realize your dreams and learn to manage your core weaknesses so that they do not trip you up any longer. When you get your money weaknesses under control, you can consolidate your debts and pay them off efficiently, start building a growth portfolio, understand retirement and estate planning, work with a financial planner, choose the best mortgage to make the most of your real estate dollar, and accurately assess your risk tolerance (I have a quiz you can take to learn more about this in Chapter 8) and learn how to control a long-term financial and investment plan, and much, much more.

A little more success with finances builds your confidence with money and extends your reach just enough to realize some dreams. You and your money are going to have a lifelong relationship, and to make any relationship flourish, you need to know your strengths, weaknesses, undeveloped talents, and also which traits are so fundamental to your core personality that you'll need to make peace with them.

What you feel and how you show your feelings to the world pretty much show up in your Money Type.


So, let's get to the nitty-gritty: What makes a Money Type, and what makes it yours?

As I began to analyze how people deal with money, I saw that certain groups of traits clearly defined a financial personality, which is what I mean by a Money Type. These are the dominant traits that drive people to prosperity, to ruin, or down a more secure path. If I've learned anything in doing the extensive research for this book, it is that everyone has a set of attitudes, fears, behaviors, and values that, when put together, fit into a distinct personality or Money Type. Dozens of traits make up the Money Types.

With thousands of cases to evaluate, I formulated sets of behaviors and beliefs that reveal how you care about, use, spend, invest, lose, and earn money. For example, one profile of a Money Type stresses striving for more. Another tends to deny the impact of money on their lives, while yet another takes excessive risks with money or simply prefers to coast along, intent on maintaining the status quo. Maybe you're tightfisted about money and don't like spending, borrowing, or giving to others. These traits are reflected in, for example:

• How you feel about money in general. Perhaps you think money is more important than anything else, or, conversely, is given too much importance.

• How your background affects the way you deal with money now. Perhaps you grew up with very little, and now do what you can to ensure you don't duplicate your parents' money struggles.

• What your fears and fantasies are related to money. Perhaps you fear poverty, and being out on the street, and therefore, you cannot spend money.

• What your financial situation is now. Perhaps you're doing okay, but you inherited some money you want to invest. You don't know where to put it to keep it secure and have it grow.

• Where your ultimate financial goals lie. Perhaps you'd like to buy a beachfront home to retire to and not worry about running out of money to live on.

Then I had another revelation: The best way for me to help people effectively was by tailoring my advice for the best fit within your dominant personal financial style. I could match a person's emotional experience of money with individualized practical financial advice. This was the key to effective change. In working out the types, I found that almost everyone falls within one dominant Money Type but has a characteristic or two from other types. As you read through the chapters devoted to each Money Type, you'll see how your complete financial personality is revealed to you more clearly.

Here, then, are brief profiles of the six basic Money Types. You'll probably see yourself in one or more of the types, but start out by focusing on the behaviors and money habits that most dominate your finances now. Be sure to read every chapter. There are true stories, confessions, revelations, and real financial turnarounds to inspire your own efforts!
Start with:

The Strivers

For you, the starting point is about acquiring, achieving, and letting others know how much you have. Since money and what it can buy are measures of success, Strivers find a way to play the part of the success story before they've attained the role. At their best, Strivers have energy and drive to make things happen. You make great entrepreneurs, who are willing to take a chance on new ideas, and invest in yourself. Strivers get into trouble when the focus is on overspending-and in forgetting how your income matches up with your expenses. Striving to live up to standards beyond your means tends to get you into debt and interpersonal troubles.

Money mastery for Strivers: If anyone can meet the challenge of gaining control of money by cutting back on nonessentials, it's you. You should still be able to afford some luxury items, but most importantly, you'll learn how to put money aside for the future and make your money grow.

The Ostriches

Ostriches define themselves as being baffled, intimidated, or embarrassed by money. Does this mean Ostriches are unworldly or not used to making a lot of money? Quite the opposite! You're in every profession, including law, teaching, medicine, blue-collar or middle-management jobs, or the arts. Whoever you are, I'm always struck by your fortitude and contradictions. You believe you'll always survive-even though it's hard for you to deal with money on a day-to-day basis. Some Ostriches are proud of their indifference to money while others ignore it until there's a crisis. Most of all, you feel confused or even angry about how you deal with your finances-a state of mind that arises from the misguided belief that you can't learn to master money basics. But of course, you can.

Another aspect of the Ostrich is a variation I call the White Knighter. Here, you hope that one event or person-a symbolic white knight-will rescue you from money problems. Winning the lottery or hoping for an unexpected inheritance keeps you dreaming and thereby neglecting your finances.

Money mastery for Ostriches and White Knighters: After understanding what steps you can take to help yourself, you'll never again believe that you're "just not a money person." You'll finally be inspired to snap out of inertia mode and take charge of your finances.

The Debt Desperadoes

Whether in debt because of overspending or being underfi- nanced, Debt Desperadoes are always coming up short. The spending addicts (or shopaholics) among you prefer the thrill of buying to the security of having. Then again, some of you are underfinanced because of having lost your jobs. Or you're left with no assets after some personal catastrophe, and you max out your credit cards and borrow to pay for staples.

Many Debt Desperadoes hit a wall, and the out-of-control spenders finally go cold turkey to stop the spendaholism. It's not uncommon for your type to bury yourselves deeper. You create more debt by borrowing to pay other outstanding debts and use still active credit cards to charge more stuff.

Money mastery for Debt Desperadoes: Can you finally work your way out of debt and prove to yourself that you can manage money? Yes! I'll show you how with a financial plan that's easy to follow. Remember: It's your money, and you deserve to have it work for you, not against you!

The Coasters

This Money Type is the most financially stable-you're someone who's coping and thriving. Coasters are, in general, probably doing better than most Money Types and may not be aware of it. Although there's no money crisis, you don't have a huge distance to go financially, but a few changes can make a huge difference.

At their best, Coasters are organized, responsible, and focused on stability. You are more likely than most types to have decent insurance coverage and have done some retirement planning. Your weakness shows up when, because you're not facing any big financial problems, you're too complacent about money. You stop at the status quo, freeze in time, and coast along with the same investments and savings. You may even pass by opportunities for the future. So, while you're financially healthy and happy, you could be a lot more prosperous.

Another aspect of the Coaster is a variation I call the Optimist. A little spoiled by having been brought up without many financial woes, Optimists are most known for leaving jobs to work at, for example, companies your generation virtually invented: the dot-coms and Internet businesses. If you're an Optimist, you can get into trouble by believing you'll always be bailed out and always get what is rightfully yours-and that it's what you deserve.

Money mastery for Coasters and Optimists: If you are more of a Coaster than an Optimist, I'll show you how to meet the challenge of taking a few small steps away from the status quo and shaking things up for yourself, a little at a time. You'll be inspired to set new financial goals with money that can ultimately pay off. If you're an Optimist, you're a bit more confident about the here and now, so your challenge is to plan more smartly for the future. You're hard workers, so I'll motivate you to make some important changes to make your money work better for you.

The High Rollers

For you, money is about the grand gesture infused with bravado and a belief in the long shot. You're the High Roller, who is likely to be found gambling around a table, gambling on a dream to build a business, or playing the stock market on margin. Your type tends to think you're smarter, faster, and shrewder-and invincible. And when entering a high-risk deal or tossing the dice at a casino, you think, either, "Out of my way, I'm coming through," or, "This is my lucky night."

At their best, High Rollers do everything right and risk taking pays off grandly. The truth is, in the world of money, you have to take some calculated risks to attain your goals. But weaknesses? High Rollers get into trouble when they habitually take risks without a safety net. You seek the rush of daring the universe to take you down. Often, with the throw of the dice, unlucky nights are more frequent.

Money mastery for High Rollers: Your surest bet is in learning how to manage your money without completely squelching your risk-taking impulses. You can do it. I'll show you how to make peace with limiting big risks and find peace in what you do earn.

The Squirrels

Motivated by a fear of loss, Squirrels are, sadly, cheating themselves. You have a secret fear of losing everything and believe that the resources you have are never enough. This fear, when it takes hold, can turn those of you who are comfortable into hoarders who live way beneath your means.

At your best, your Money Type lives with your assets in a fairly safe, if financially insular world. At your worst, Squirrels cannot enjoy what they have or give to others with any sense of generosity. You tend not to see a balanced picture of money opportunities, nor are you willing to understand how you can actually be losing money by not making an attempt to improve your financial situation.

A close cousin of the squirrel is the Bag Lady, a personality who's more anxious about accumulating assets than any other Money Type. Bag Ladies fear imminent destitution and loss of control over their lives, worrying that they'll never have enough money-no matter how much they may actually have socked away.

Money mastery for Squirrels and Bag Ladies: Since your types are so good at saving money, I hope to inspire you to manage it more wisely. I show you how you can make a difference in what you have by learning to invest safely and smartly. Okay, now that you have an idea of what your type may be, here's how knowing your Money Type can make the difference for you:


The book is set up so that you can systematically understand your dominant Money Type and find other traits that are part of other, less influential types for you. For instance, you may be an Ostrich/White Knighter by inclination, and you would say this is your dominant type. But you may have shades of being a Squirrel or a Coaster/Optimist, too. Take in all the information!

Every chapter opens with a profile of a different Money Type and its concomitantly distinct strengths and weaknesses. I follow with true-life cases of that type, which will clarify your type's issues for you in ways with which you can identify. You'll read about the money problems these people are grappling with because they are Ostriches or Strivers or High Rollers or whatever the type. That is, they are stuck repeating negative behavior typical of their type. I analyze what they're doing and point out how the behavior might have become second-nature. Next, I provide suggestions for lessening the effect of negative behavior patterns in the Emotional Path section. Finally, in the Financial Path for your type, you see how your Money Type can make significant changes that build, rather than destroy, your financial future.

The payback in mastering the Money Type process is that you do not need to change your core money personality. What's important is that you examine your money behavior honestly by reading the suggestions I make for you in the Emotional Path. Then, make enough effort to unblock progress and take action to change what's holding you back, as found in the Financial Path.

Too many of you are stuck or feel limited because of how you're living. I hear from you thousands of times a month, and I understand that you want change for the better. I'm unable to bestow change upon you, but I can give you something even better: effective guidance you take for yourself that touches you both emotionally and financially and makes a real difference.

Before we move on to the next chapter-which is a series of quizzes that will help reveal your belief systems and intimate feelings about money-let me assure you of one important point:

I don't expect you to disavow or deny your Money Type, and I hope you don't feel insecure about what your type turns out to be. Nothing is as critical to your financial and emotional well-being as working within your type to become more financially secure. For example, if you're a Squirrel and you have all your money tied up in low-interest CDs (certificates of deposit), I wouldn't suggest you sell them and go completely into highrisk futures. What's best for you is to loosen up a little so you can help your money really grow and learn to enjoy it more. The power behind the advice in this book is that:

• You can work on the margins of your type to make better decisions with your money.

• You can learn how to operate from your strengths so you do not continue to limit your options.

• You can finally increase your level of comfort with money, and you can learn to make decisions that normally may be unusual for you.

Your new journey to financial mastery begins now!

Excerpted from Master Your Money Type , by Jordan E. Goodman . Copyright (c) 2006 by Amherst Enterprises, Ltd., and Lynn Sonberg Book Associates. Reprinted by permission of Little, Brown and Company, New York, NY. All rights reserved.

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