Advanced Wellbeing offers financial therapy insights each week to inform more details about financial therapy.
“Find a financial advisor who is a fiduciary, someone legally bound to put your interests first.” I have made this recommendation many times over the years. Now, most financial advisors technically qualify as fiduciaries, which is a problem for consumers.
For decades I have watched couples come undone over money. In many cases, red flags warning of money conflicts could have been identified long before they married. Such signals are not as obvious as differences in net worth or income levels; they are in the deeper, emotional reasons that drive controlling, avoidant, or obsessive behaviors around money.
Many observers expected that the Federal Reserve interest rate was likely to be lowered when Kevin Warsh replaced Jerome Powell as board chair. President Trump’s nomination of Warsh came after strong demands from the president for aggressive rate cuts. With recent price and inflation numbers, however, it appears that rates might be going up instead of down.
How is it possible that consumer sentiment is at an all-time low while stock prices hit all-time highs? This disconnect is not what usually happens. Stock prices and consumer confidence tend to move together because they draw on the same conditions: a growing economy where people are working, earning, and expecting more of both. In forty years as a financial advisor, I have never seen a market this confusing to investors.
As you advance in your career and begin to build financial security and invest for the future, you will build a financial team. Most likely, you’ll find a CPA to do your taxes, a financial advisor for investments, and an attorney for legal matters such as estate documents. Ideally, each professional will be capable and will act in your best interest. It’s natural to assume that their work will come together coherently. Yet it often doesn’t.
When you think about building wealth or financial success, what’s your “freedom number?”
This is the term that financial planner and therapist Prudence Zhu uses for what is often called “financial independence.” It means having enough passive income to live on without having to work and earn money.
For decades, a divide has limited the options for American workers who are saving for retirement. Assets held outside of retirement plans have access to hedge funds, private equity, real estate partnerships, and other alternatives that move differently from the stock market and can offer different kinds of returns. Meanwhile, 401(k) plans have long offered a limited menu — stock funds, bond funds, a target-date fund, perhaps a money market option, and little else. A new Trump administration policy may close this gap.
You’re thinking about rolling over your 401(k). Or maybe you just inherited some money and you’re not sure what to do with it. Where do you go for advice?
Even if you have a financial advisor, you may get a variety of opinions from friends and family, none of whom know your full financial picture. I’ve seen this happen with clients for decades but only recently learned a term for it.
Do billionaires need financial therapy? The very idea probably seems ludicrous. Yet financial therapy can be especially important for wealthy and powerful men because their financial decisions have a broad impact. The consequences can ripple through organizations, industries, and markets.
A common issue I see with financial planning clients is whether and how to provide financial help to adult children. Should they pay for college? Take care of debt? Bail out financial mistakes? These decisions are made from a complicated mix of love, fear, guilt, hope, and sometimes unresolved history.
