Long ago, the Ladies’ Home Journal ran a column, “Can This Marriage Be Saved?”
Today, I invite your thoughts on the question, “Can This Sale Be Saved?”
Here’s ths story.
I was speaking with a financial advisor who created an amazing tax strategy for his doctor client that would legally and ethically cut the doctor’s tax bill by $100,000 in a single tax year.
The doctor seemed excited. He hated paying big tax bills
His CPA blessed the plan.
But the doctor kept dragging his feet and then told the financial advisor that the deal was off.
As my financial advisor told me the story, he threw up his hands and said, “What are you gonna do? It’s just another crazy doctor story.”
Is this the end of the story? What else could this advisor do? Can this sale be saved?
I said to the financial advisor, “Let me make sure I’ve got this right. The doctor is choosing between writing Uncle Sam a check for $60,000 or investing $20,000 to cut his tax bill by $100,000. That’s a net savings of $80,000. Plus he doesn’t write the IRS a $60,000 check.“
He said, “Correct.”
I asked , “This plan is above board? There’s no gray area?
He said, “I don’t work in gray areas.”
I said, “I don’t know this with absolute certainty, but there’s a high likelihood that this physician’s unmanaged human brain killed the deal. “
The human brain evolved to answer one question, “Am I safe?” Our hyper-focussed danger detectors gave us a survival advantage when we were living in caves and saber tooth tigers found us to be yummy meals.
Our human brains demonstrate exquisitely sensitivity to the threat of loss of life. Financial losses can feel like survival threats.
I bet in the end this doctor only saw the $20,000 investment, called it a loss and said no to the plan.
I invited the financial advisor to consider a transparent conversation with his doctor client.
He could say something like, “It looks like your human brain is working overtime to keep you safe. I bet your focus right now is the $20,000 you need to invest to harvest the $100,000 tax savings. I wonder if you’re saying no to the plan you were so excited about just a few weeks ago because your human brain is telling you to avoid losing $20,000. Maybe you can replace the thought,’This plan means a $20,000 loss.’ With ‘I’m making an investment that will put $140,000 in my pocket.’ You might need to keep repeating the second sentence, because your human brain will bombard you with the first sentence.”
Human brains do what human brains do.
However, biology is not destiny.
This financial advisor is, in essence, inviting this clients to use his mind to manage his human brain.
How would you describe what it means to use your mind to manage your brain?
Imagine that you project part of yourself into the corner of the room and witness the reality show/sitcom you call your life unfold. You always have the option of watching the show and saying, “Yup, that’s my human brain at work. I’m going to override my brain’s fear of loss because I’ve done the math and I’m going to focus on the $140,000 extra dollars in my pocket. “”
Sometimes the fist step in helping clients manage their money is a transparent conversation about how they manage their human brains.
What do you think?