Do you have clients who want to accelerate wealth-building, but they tell you they can’t find more dollars to invest?
The solution is simple. Spend less and save more.
The problem is that this behavioral change is not easy.
Consider what your clients do with tax refunds or other financial windfalls. Do they deposit the checks into their investment accounts and tell you to invest 100% of it? No! They spend it!
Spending-related behaviors become habits, and habits can be hard to change. Just ask anyone who’s made a New Year’s resolution.
Your clients are not bad people; they’re most likely responsible people with good intentions. They simply make the mistake of letting their human brains run on autopilot.
Our Paleo Brains—the brain software running when we were hunter/gatherers 300,000 years ago—shape our behaviors today. It informs the way you respond when you come across food or money or a possible sexual partner.
For example, saving food was not a viable option for hunter/gatherers. That’s why your Paleo Brain urges you to consume food when you see it. In fact, it might tell you to eat til it hurts; you don’t know when you’ll eat again.
The Paleo Brain tells us to manage money the same way. When you have it, consume it! Spend it!
About 12,000 years ago our brains developed a prefrontal cortex. Let’s call it the Planning Brain. The Planning Brain can imagine a better future and make a plan to bring the dream to life.
This brain upgrade launched a lifestyle upgrade from hunter-gatherer to farmer.
If only all of your clients made their day-to-day money choices with their Planning Brains. Then they could reliably achieve the dream of a comfortable retirement in which they don’t outlive their money.
However, human brains on autopilot put the Paleo Brain rather than the Planning Brain in the driver’s seat of wealth-building. The predictable investing errors described by behavioral finance are the natural consequences of managing money with the Paleo Brain.
Further, we live in a world in which we’re bombarded with marketing messages that feed the urge to spend.
The result? Most of your clients spend unconsciously, and then consciously invest what’s left over.
Imagine if this were flipped around so that your clients saved unconsciously and spent consciously.
When I spoke at a recent meeting I had a chance to listen to a presentation by Vince D’Addona. He talked about his experience with his new tool called Currence. His software helps clients increase savings rates without feeling deprived.
I know that this sounds like an outrageous diet that promises you can eat as much cake as you want and lose weight.
However, Vince and David have results!
Investors who use the Currence software increase their savings rates to 32% of after-tax dollars. Compare this this to the national average savings rate of 4% of gross income.
As Vince explains, “Currence puts a speed bump in spending. Further, when people consciously assign a job for each dollar they earn or acquire, they naturally tap into the thrill of creating the financial freedom to do what they want to do when they want to do it. Our clients come to us saying,’ This is great! I want to increase my saving from 10% to 30%.’ We often have to slow them down. ‘How about increasing from 10% to 20% and then go from 20% to 30%.’”
How does Currence work? Vince and David are in conversation with academic centers to study their tool with scientific rigor.
However, today we don’t need to understand how a tool works to get the desired results.
It’s not just your clients who benefit from increasing their savings rates. Imagine what could happen to your own business if you helped your existing clients free up more dollars you could redeploy to accelerate wealth-building. You build you business while side-stepping the cost of client acquisition!
Here’s some great news. I sweet-talked Vince and David to deliver a webinar to members of the Engaging Doctor community. We have scheduled this complimentary session for Tuesday, October 31st at Noon Eastern/ 11:00 AM Central/ 9:00 AM Pacific. Click
here to register. You don’t want too miss this!
