The Financial Wellbeing Podcast

Episode 76 – Financial Coaching with Catherine Morgan What is financial coaching? How is it different to a financial advice? The guys chat with Catherine Morgan, a financial coach, to discuss the difference. Along with exploring how we can improve our relationship with our finances by addressing 6 anxieties. With a great Bage’s Bias that prompted a cinema food fight – we have an episode you just can’t miss! Welcomes & Introductions We really love to hear from our listeners. If you would like to get in contact, to share your thoughts, maybe even a #tightasstommo money saving tip, find us: On Twitter – @finwellbeingBy Email – contact@finwell-being.co.uk What is today’s podcast all about? An interview with Catherine Morgan a financial coach who used to be a financial adviser. She talks with Chris about what this role looks at and why there is a difference amongst the two. Along with really interesting insights about our relationship to money and the 6 reasons we feel anxiety when it comes to money. Link to Episode 53 The Financial Wellbeing Conference 2019 Bage’s Biases Every episode, Behavioural Finance expert, Neil Bage, is going to be giving us his money behavioural tips. We are hardwired to make bad decisions about money because we have biases built into us from our experiences through life. We will keep hearing from Neil to help us recognise some of these behavioural biases and hopefully lead us to making better financial decisions. – Link to Episode 36 – Understanding our attitude to risk– Link to Episode 21 – Financial capability– Link to Bitesize Behaviour Podcast This episode – Decoy Effect #TightAssTommo Featuring a hatred of popcorn, eating cheese and pickle sandwiches at the cinema and a love of Malteasers! Today’s topic – Half price London theatre tickets for kids in August 2021 Click here for more information over at officiallondontheatre.com Interview with Catherine Morgan What is financial coaching? Understanding a client’s relationship to moneyThe client does the deep and meaningful change work We have to be mindful of listening to the client and switching off our human reaction to just ask loads questions. We want to talk about ourselves, because we want that sense of belonging. We want to dominate the conversation, because we’re interesting, and we want to be liked. hold that natural reaction back to share your stories, you’ll find that When the client has finished a meeting, they’ll feel more fulfilled, if you hold that natural reaction back to share your stories, because they’ve been heard. A client going to see a financial coach should expect to be challenged on a few of their assumptions that they didn’t know they had. With financial coaching – the client has to be ready for that change work. Can a client have both a financial coach and a financial advisor? Can both work alongside and well together? Financial anxieties and catastrophic thinking The six reasons people feel anxiety when it comes to finances: Human Biases Comparing OurselvesEmotions Override Logic Our Belief System Being Unprepared Physical wellbeing v Mental Wellbeing Comparisonitis – to anchor our self-worth on everybody else’s life, it’s completely natural to compare yourself to somebody else, and particularly financially. When we hear stories from other people that will rock our sense of security and safety, we need to bring our self back to the present moment. That actually this has nothing to do with me, this has nothing to do with my own ability. Emotions Override Logic – what can we do to stop ourselves from taking a natural reaction to be emotional rather than logical? Understanding triggersManaging the emotion This takes work, it’s not something that’s just going to happen, you need to put a bit of effort into it. Summary of our belief system and how it works. Being Unprepared – why not just get prepared? It’s about taking conscious steps Physical Wellbeing versus Mental Wellbeing There is a big connection between our physical wellbeing and our mental wellbeing and we do need to look after both. But often there’s a clash Further Financial Wellbeing Podcast episodes that take a look at our relationship with money: Episode 17 – Money Emotions with Simonne GnessenEpisode 25 – Behavioural Economics with Greg Davies Episode 36 – Understanding our Attitude to Risk with Neil Bage Episode 60 – Interview with The Financial Healer Mark Bristow Conclusions from the guys What does coaching mean for financial advisors and financial coaches? Financial Advisors – At Ovation, we talk about having a coaching first, then planning and then advice approach to financial planning. In this context we are talking about coaching skills, listening and questioning skills to help a client to ‘Know Thyself’ Financial Coaches – They will also have the coaching skills, listening and questioning. But they are brining in skills to talk about a specific topic, your relationship to money. A financial coach is not regulated by the FCA, they will not give you investment advice. The focus is on you, the client, talking about your relationship with money. In a perfect world, you’ll use a financial coach and then you’ll see a financial adviser who uses that coaching, then planning, then advice approach. If you would like to hear more from Catherine Morgan, follow the links below: Catherine’s website blogCatherine’s Podcast – In Her Financial Shoes Do you have any financial wellbeing questions you would like us to answer? Or do you have a #tightasstommo money saving tip you would like to share with our listeners? If so, let us know by going to Twitter @Finwellbeing or email – contact@financialwell-being.co.uk If you would like to purchase a copy of The Financial Wellbeing Book please click on this link to visit Penny Brohn UK shop Transcribe of the Podcast Script: (scroll to the bottom to listen to the episode) David 0:10 Hello everybody, wherever you are listening and welcome to another episode in our long running series of financial wellbeing podcasts. My name is David Lloyd. Bohm ever, actor, broadcaster, man about town, recently retired but not retired, because I’m still working. Very happily ensconced in a new house. Yeah, life is good. And one of the reasons Life is good, because every so often I get to do podcasts with these two wonderful people, the first of whom is going to introduce himself now, Chris Budd, who are you? Chris 0:42 I’m Chris Budd. Hello, everybody. I wrote the financial well being book. My day job is I help companies with succession planning, but I also write novels. And I just want to make one comment to everybody at the very early stage, David, we’d love to hear more from our listeners. We have a Twitter account @Finnwellbeing. But we also have an email address. So if anybody wants to just share their thoughts, maybe share a Tightasstommo tip with us. We really, really, really would love to get more listeners getting involved in this in this podcast. So the email address is contact@financialwell-being.co.uk. It is, of course, the show notes, etc. But not everybody always reads all of those. So I just wanted to encourage people to get in touch with any tips, any ideas, any thoughts about the show? Anything you like? David 1:28 And what’s the Twitter handle Chris? Chris 1:30 @finwellbeing David 1:31 Excellent, good. Yes. Because we really do enjoy getting contact with our listeners. So please do email in, Twitter in you know, send carrier pigeons, whatever you want. Tommo, who are you? Producer Tommo 1:44 I am Tom Morris, Chartered Financial Planner by day, director over at Ovation Finance, in Bristol. And also by night, a father who is currently helping their nine month old with teething issues. So excuse me, if I’m a little bit groggy and a little bit short, and have zero patience for both of your rubbish humour. So yeah, there’s your warning. David 2:13 But you’re like that all the time. There’s nothing new. Right. So how’s how’s life with you Chris? Chris 2:23 I would say nice. All right. I mean, I think like all of us standing in the same room for the last 18 months has been a little bit strange on the brain. But, but yeah, people can be through, aren’t we now? I think things are looking up a bit. David 2:35 Yes. Well, let’s hope that is the case. Let’s hope that is the case. Right. So what have we got on today’s podcast? Chris, what’s happening? Are we talking about something? Have you interviewed somebody? Chris 2:44 We have an interview with the amazing Catherine Morgan. Now Catherine is a financial coach used to be a financial advisor. We’ll talk a little bit about what that means why there’s a difference between the two. But she’s got some really, really interesting insights about our relationship to money. So yeah, interview with Catherine Morgan coming up. David 3:01 And what’s incredibly special about this interview is the fact that of all the people you’ve interviewed. She’s the only person I’ve ever actually met. And she was, she was on the panel at the very first financial wellbeing conference that we did last year. Or was it the year before? I can’t remember two years ago, two years ago, years ago, Blimey, under the shadow of the wings of Concorde. And very good she was too so I’m looking forward to that interview. But before we do that, let’s go on to our two regular features. First up, we have Bages Biases where an old friend of the podcast behavioural finance expert Neil Bage, gives us his one minute introduction to a different behavioural bias that affects how we make decisions about money. Chris, what is Neil telling us about this week? Chris 3:46 Neil is telling us about the decoy effect. Neil Bage 3:51 The decoy effect. The decoy effect is where we as consumers change our preference between two options when we are presented with a third option, the decoy. Let me give you an example that is the most used in the world of behavioural science. Imagine you go to a cinema and see two options for popcorn. A small popcorn costs you three pounds, and a large costs seven pounds. The evidence suggests that most people when faced with these two options, go for the small popcorn that only costs three pounds. However, add a third option, a decoy, a medium of popcorn for six pound 50. And now -well, most people will now go for the large it’s only 50p more than the medium size, and you seem to get so much more value for money. The simple fact is by adding in a decoy, we end up spending more money than we would if the decoy didn’t exist in the first place. Chris 4:51 So I think this is a really good example of how behavioural finance, mostly we’ve tried to present it in a really positive way about be aware of your behaviours, etc etc. This is a really good example of how our behaviours can actually work against us to make bad financial decisions. And that’s why we keep bringing them out why Neil does such a great job of telling us about them, so that we can be aware of what forces are being applied to us to get us to spend more money. David 5:17 That’s very, very interesting, that particular example and it leads us actually quite nicely into our next feature, which is #tightasstommo about how we can save money by adopting Tommo’s tips. But before we come on to Tommo, that’s just given me an idea for one, listen to what Neil had to say there is – don’t buy popcorn in cinemas. It’s horrible. I can’t stop. I don’t mind a mouth full of popcorn. I don’t want to sit there wading through a huge bucket of it. It costs them about 20p to produce and they sell it on a ridiculous price. And you just end up getting it in your shoes when you walk out at the end. So there’s my TightAss tip. Don’t buy popcorn, take a sandwich instead? Chris 5:58 I don’t think that’s TightAss at all. Producer Tommo 5:59 Take a sandwich. A little packed lunch with a little . . . David 6:03 Yeah, yeah, take a sandwich and a thermos flask with a bit of tea in it. Chris 6:08 No, no, you see I’m a massive fan of the Wittertainment podcast, Guillermo de Mayo’s Wittertainment determined podcast which I listen to every single week. And they have a – hello to Jason Isaacs, by the way – and they have a code or cinema code. Basic rule is don’t take any food into the cinema. You’re only in there for two hours. Eat something before and after. Don’t eat in the cinema because all that rustling in noise is ruining it for somebody else. You’ve got going on one here David, bloomin’ heck. Producer Tommo 6:35 There is an exception to this rule, though. Chris 6:37 Soft fruit only. Producer Tommo 6:39 But I mean, can one really watch a movie at home, or in a cinema without a bag of maltesers? Chris 6:45 Yes Producer Tommo 6:45 Putting it out there. Chris 6:46 They’re the worst the rustling and noise. David 6:49 Mind you. I do love a malteaser. Producer Tommo 6:52 I know, right? David 6:53 I wouldn’t have one in the cinema, I’d be too busy eating cheese and pickle sandwich. Producer Tommo 7:02 Damn it. I was trying, I was not gonna laugh at your rubbish jokes. But I have failed David 7:06 You’ve done it. We’ve, we’ve cheered up grumpy Tommo. Chris 7:10 We’ve cracked it him. David 7:11 You can now cheer us all Tommo with your TightAss Tommo tip. Producer Tommo 7:14 I hope this one cheers you up, before I do. I think it’s only fair that I give a little bit of a shout out to Neil’s own podcast which is called the Bite Size Behaviour podcast with Neil Bage. Where he goes he elaborates a bit more on some of these so well worth looking at if you’re interested. Producer Tommo 10:01 When I say the opposite end of the age scale to you, but I’m in the, as discussed at the start the pod I’m in the eye of the storm with a young family. I’ve got to stop this, these terms, I have of lovely experience that is gonna give me so much joy and happiness over the years. But it’s relevant because in August and I’m hoping this podcast comes out in time for this tip, if not think about this for next year. It’s something called kids week that officiallondontheatre.com put on and it’s for I think theatres in London go and check, it might be a run around the nation, but you’re able to buy a ticket as an adult. And then a significant discount for children that go with you. Obviously the idea being at school holidays, they’re trying to fill the stalls and obviously make it a cheaper day out for a family to go to the theatre. So it’s kids week. Officiallondonheatre.com/kids-week. details will be in the show notes. But I thought that was a pretty useful thing to fill time in the summer holidays. Chris 11:13 You know, David, I fondly reminisce on the days when tomos titles tips were funny, not really useful and practical. Producer Tommo 11:20 Look I’ve got some gems lined up for you guys. But I needed to get this one in because it is we got a time timer. But don’t worry, I’m going to embarrass myself on the next one. So listen out. David 11:32 And if this one does come out for August 2021, remember that you can probably pick up an extra free case of COVID at the same. Producer Tommo 11:42 Yes, please theatre responsibly. David 11:45 Right. That’s enough of that nonsense. Chris, why don’t you tell us about your interview with Catherine Morgan. Chris 11:52 So I’ve known Catherine for quite a few years. To be honest, we’re not quite sure why she hasn’t been on the podcast before because she’s absolutely fabulous. And she is a financial coach. She has been a financial planner as well. She trains financial coaches. She’s just all around really knowledgeable person about our relationship with money. So let’s have a listen to my chat with Catherine Morgan. Chris 12:14 Morning, Catherine. How are you? Catherine Morgan 12:16 Morning, Chris. Yeah, I’m great. Thank you. How are you? Chris 12:18 Yeah, very, very good. Starting this chat with you slightly differently. Because of course, we know each other extremely well. So I’m not going to pretend that here. Hi. Welcome to the podcast. It’s really nice to meet you, Rubbish. We know each other really well don’t we? Catherine Morgan 12:32 Yes, it’s like Oh, God, I have I got to talk to you again Chris this week. Chris 12:36 I love that thing when you see on TV programme, documentaries and stuff where a camera crew go to the knock on the door and a member of the public opens the door ans says Oh, hello. As if they haven’t all set it up for the last hour? Catherine Morgan 12:47 We won a competition Oh, have I? Chris 12:52 I would like you to just start off by explaining to our listeners what financial coaching or money coaching? What it actually is because you’re the person bringing this to the masses as far as I’m concerned. Catherine Morgan 13:05 Oh, thank you. That’s very kind of you to say. I’m certainly not the pioneer of financial coaching by any stretch of imagination. But certainly what I found over the last sort of four or five years of working in that space is that for me, that what centres around the decisions that people make around money is all about our beliefs. It’s you know, things that we’ve heard growing up our sense of purpose, what drives us, some of our pre existing beliefs that we’ve literally just grown up with since since day dot. And for me, the work as a financial coach is about understanding that client’s relationship to money because we know that most of the decisions that we make come from what we call our unconscious beliefs, things that we aren’t even paying any attention to. And that can, can make a big difference between what actions we take what decisions we do and don’t make around money can also have a huge impact on our financial wellbeing and how we feel. Because ultimately, what drives the behaviours that we take around money is how we feel and what drives how we feel about money is what we’re thinking about in the first place. And some of those thinking processes are conscious, and some of them are unconscious. So financial coaching, for me is really about understanding what what is our relationship with money, before we then go on to do all the practical steps that let’s face it, we all know we should be doing, but we don’t always take action. That’s the power of financial coaching for me, as a financial planner, or as or as a financial coach, the ability to sit and listen to the client and really explore with them get them to think about what their relationship is with money rather than us actually coming up with the solutions. There’s a big difference between coaching and planning or advice, because that’s where we put our kind of solution hat on, so to speak. So coaching is really about the client doing the deep and meaningful change work, not the other way around. Chris 15:04 Do you think that it’s easy to not give advice? Catherine Morgan 15:11 No, it’s one of the biggest challenges I would say from working with financial planners and advisors, one of the biggest things is self-disclosure and interference. And they talk about this in the medical profession, don’t they around, you know, should you have transference of patient doctor kind of relationship. And it’s kind of similar, I think, to the role between the client and the adviser. Self disclosure is a really interesting one, because it’s built into our human DNA to be inquisitive to be curious. And what happens is that self-disclosure elicits more, more likelihood that the client will share. So if we share some of our story with a client, this is the power of storytelling is that they’re more likely to then share things back. But what we have to be mindful of then is listening to the client and switching off our kind of human reaction to just ask loads questions. And, you know, like when we ask a question, and then you ask a second question, before you even allow the person to ask, answer the first question, we have this kind of natural, wanting this to be curious. And but what happens is that when we have our own sense of purpose, we have our own sense of beliefs around money, we have our own stories about money, we have our own judgments around money, all of these human biases can have a huge impact then on how our client feels. And I see that time and time again, with advisors is that that’s the hardest skill is to actually go into a client meeting completely neutral of our beliefs. Our stories, our messages, we’ve heard our personal experiences, because otherwise there is that risk, that the client will either answer based on what they think they should say, because they’re sitting in front of us, or those beliefs will be cross reference to the client, and the client will will then not have that opportunity to really share what’s in their subconscious money system. Chris 17:13 Or just thinking while you were saying about really good listening skills, and I’m finding myself Yeah, I’m remember one, I had a particular meeting that I was really good at – oh crickey I’ve locked. You can’t help yourself, can you to put yourself into the situation, it’s just a natural thing to do. It’s like, you know, when you say to that person, or you listen to somebody who said they had a lovely holiday in Italy, and you immediately start thinking about that really funny story you’ve got when you were in Naples, you know, and you’re not listening anymore. It’s just, it’s social etiquette in a way, isn’t it? Catherine Morgan 17:39 It says and that’s the challenge, isn’t it? It’s like, Where is that boundary? When do you listen? And when do you participate? And I think that in a coaching relationship, you can do both. But in a pure coaching capacity, you want ideally kind of 90% of that conversation to be coming from the client and 10% to be coming from the coach. So one of the skills is kind of learning to listen and feedback and kind of, you know, checking for accuracy when the client says something rather than, like Chris, you might say something like, Oh, I went to Spain on holiday this year. And when I was a kid, like my dad used to tell me this about money, that your natural reaction is to be like, Oh, yeah, I went to Spain, and I went to stay in this house and it was beautiful. It was right by the sea, and there’s all these trees blowing in the wind, and you start to go down your story. And that’s really difficult to do. So one of the skills is just about listening, repeating back what you heard the clients say, and checking for some accuracy. So you know, oh, I heard you say this, tell me a bit more about that. Or what did I miss in that conversation? And then maybe once they finish that story, you could then share with them a very short snippet of your experience. Chris 18:53 The purpose of that is to align empathy, sympathise with the client rather than to be sharing a story for it’s own sake. Catherine Morgan 19:02 Yeah, I think we want to talk about ourselves, because we want that sense of belonging. Don’t wait, and we want to be liked. Chris 19:09 Well, I’m also really interesting. I’m more interesting than the person I am talking to usually, frankly. Catherine Morgan 19:16 And that’s it isn’t it is that we think that, well, we want to dominate the conversation, because we’re interesting, and we want to be liked. And we want that sense of belonging and that sense of community and that sense of purpose. And sharing those stories with each other. And having, you know, dialogue between each other is what will create that, but when you’re in that coach capacity, the challenge there is that we know from research that if a client has more radio time in their meeting, they have much more significant change. And that’s really powerful to think about next time you go out to the pub, or you’re chatting to a friend or you’re interviewing someone on their podcast. Then if you just sit back and ask loads of really great questions. And not and kind of almost like, hold that back, which is really difficult to do but hold that natural reaction back to share your stories, you’ll find that when the client has finished that meeting, they’ll feel more fulfilled, because they’ve been heard. They’ve been given that space to share things about themselves that perhaps nobody’s ever asked them before. Chris 20:25 So if a person is going to go and see a financial coach or money coach, and we won’t worry about the distinction between the two, we lump those together for the moment, then they should expect to be doing most of the talking. And they’d be to be challenged on a few of their assumptions that they didn’t know they had. Is that a reasonable summation? Catherine Morgan 20:41 Yes, yes. Chris 20:42 Cool. And I suspect that is a significant difference for most people than when they go and see their financial advisor, Catherine Morgan 20:50 And sometimes it depends on what the client needs and what they’re ready for. Because one of the things I, I would say with financial coaching is the client has to be ready for that change work, they have to be in a state of ambivalence, if they’re not in that state of ambivalence, they’re not ready for change. And if they’re not ready for change, then they’re not going to be motivated, they’re not going to have the meaning and purpose behind creating change. So financial coaching isn’t necessarily right for everybody at every step of the journey. But I do believe that unless we understand the client’s thinking and feeling behind money, and the meaning and purpose that they connect to money, then for me, the financial plan, or the advice that’s delivered afterwards, won’t work, or it won’t work as effectively Chris 21:35 Won’t have as much meaning certainly will it? Catherine Morgan 21:37 No, absolutely. Chris 21:38 So, you obviously run your training course for financial advisors to learn financial coaching skills, but early days for the for this whole process. And I think it’s reasonable to say, would you agree that somebody should really at the moment, or could at the moment, have both a financial advisor and a financial coach? And both can work alongside each other and work well together? Catherine Morgan 21:57 Yes, I do. I think that there’s merits of just having financial coaching on its own. And I’m a big believer in that should be step one. And I won’t take on any regulated financial work with a client until I’ve done financial coaching with them. And that’s just my choice. But I think that there’s also the ability for a regulated financial advisor to incorporate elements of coaching into their practice. So there’s lots of tools and exercises that I teach advisors to use, where they can just gently nurture that into the work they’re already doing. Now, the benefit of that, as opposed to a pure coaching meeting, is that if they’ve got an existing established relationship with a client, and they’re just wanting to dig deeper into that relationship, because really, that’s what it’s all about, it’s all about relationship creation, then they can do that in a way where they start to implement coaching into their practice. So one of the things I do is to have what I call a storytelling meeting with a client, so either right at the very start of onboarding a new client, or if I’ve got an existing relationship with a client, I’ll have an independent storytelling meeting with them. And in that storytelling meeting, that’s where I want to get really, really deep with their beliefs around money. And what meaning are they attaching to money. So for example, if I’ve got a client who is always picking up the phone, when the stock markets go down, because they’re catastrophizing situations, they’re going into that kind of catastrophic thinking, then I really want to help them to see the benefits of releasing some of that, and letting go of some of the stories of the future, which is really what catastrophic thinking is all about. So that next time that happens, they’re less likely to feel that anxiety. And if they’re less likely to feel that anxiety, and get that emotional flooding that happens in the brain, then I’m more likely to get a better outcome for the client and the client is more likely to get a better outcome because they’ll sleep at night. So I think that there’s there’s definitely an opportunity for different skills to be gently nurtured into a regulated meeting, but also for it to be a standalone service. Chris 24:06 Yeah, yeah. You’ve brought us very nicely then onto what was I was gonna say was going to be our main subject, but we’ve got really interested to an interesting subject of what financial coaching is, but let’s let’s look at the the six reasons people feel anxiety. I’m assuming I’m gonna give this a go. catastrophizing is that one of those six? Catherine Morgan 24:23 Yeah, so I’ve kind of lumped this into, like, just human biases in general. And I know Chris, you’ve done a lot of work around this with new age with behavioural finance. But you know, our natural human biases is definitely an area that can cause financial anxieties and catastrophic thinking is definitely one of them. But, but also, what’s interesting for me is that the brain does have certain biases, so we are programmed to stay busy. We’re programmed to conserve energy. We’re programmed to pay attention to the here and now. So when a financial planner or advisor or a client’s thinking okay, so I need to relax, I’m going to meditate, I need to exercise regularly, I need to think about my financial future, what I’m going to do when I retire, you’re automatically going against what the brain wants to do naturally, because the brain’s purpose is to protect, otherwise it goes into fight or it goes into flight mode. So the with that message in that belief, well, if we’re programmed to stay busy, it’s gonna be really hard to meditate. We’re programmed to conserve energy. So when we tell ourselves, oh I need to start going to the gym a bit more often, you can see that if the motivation is not there, and the thinking is not there, then it’s gonna be really, really difficult. Chris 25:38 I’m really glad you’ve used that example, because that explains why I don’t go to the gym. Catherine Morgan 25:44 Me too. I’m definitely with you on that one. Chris 25:48 So are we, are you able to list the six reasons people feel anxiety, then we can go through them? Catherine Morgan 25:54 Yeah, sure. So the first one is human biases. The second is comparing ourselves. The third one is emotions override logic. The fourth is our belief system. The fifth is being unprepared. And the sixth is physical wellbeing versus mental wellbeing, I probably could have listed another three, actually. But those are the six main ones. Okay. Chris 26:16 So what have we touched on? Already, we’ve touched on human biases. Let’s, let’s have a look at comparisons, then. Catherine Morgan 26:21 Yeah, so this is a really interesting one for me. Because comparisonitis is, it, that its main objective is to compare ourselves to other people. to anchor our self-worth on everybody else’s life, you know, we hear this common phrase about keeping up with the Joneses, for example. Now, all that does, it’s a natural bias is to compare ourselves. But all that does is to create a sense of lack. So it just highlights what we don’t actually have rather than what we do have. So practising gratitude, and actually identifying your own sense of purpose, your own identity, your self worth, will actually really help to remove any of those anxieties that we feel when we start comparing ourselves to everybody else. Because when we feel anxious about our, our own purpose, or our own situation is it then affects our whole ability to follow advice, or to create any changes. And, and if you think about it, is it’s giving away that power, isn’t it, when you start to compare yourself to other people, you have no idea what’s going on in their lives, really, even your best friend, you don’t necessarily know what’s underneath everything you don’t know their financial situation, you don’t know their status, their relationships, their wellbeing their physical health and mental health. And so all comparisonitis does is gives away your power to somebody else. And it’s the small steps of imperfect action, that create a good sense of wellbeing. And that’s what we need to focus on. Chris 27:52 I love that Theodore Roosevelt, quote, “comparison is the thief of joy,” which is the space that I’m going to do the very thing that we just said that you shouldn’t do, which is I just made me think of a little story. Because it’s about me, a friend of mine sold his business for really quite a lot of money, like several millions, you know, a lot of money and lovely chap. And when he told me about this, the rest of the weekend, I was really fed up. And it really affected me because I was thinking, what can I do with that money, and if only this than the other, and it got to the Sunday evening, and I’d had a pretty miserable weekend, if I’m honest. And on the Sunday evening, I suddenly was walking along with the dog and I went, hang on a minute. The fact that he sold his business for lots of money, literally has nothing to do with me at all. Well, I was pleased for him. Don’t get me wrong, but it was also making, why is this making me feel sad? This is ridiculous. And I just snapped out of it. Because I realised it literally had nothing to do with me. It made no difference to my life whatsoever. But it still affected me for about a day and a half. You know, it still got under my skin. Catherine Morgan 28:56 Yeah, absolutely. And that’s natural, completely natural to, to compare yourself to somebody else, and particularly financially. Because what’s really at the core of that, Chris, is the meaning that you attach to that success, the meaning that you attach to the fact that he’s just sold his business for a few million pounds, because you’re starting to think about well, what would I do with that money if I had that myself. And so it’s the meaning that we attach to it, whether that’s a sense of security, a sense of peace of mind, a sense of wellbeing a sense of safety. I know, Chris, you’ll be very familiar with Maslow’s hierarchy of needs. And, you know, when we, when those foundations shake, and many of us would have experienced that recently with COVID, with lockdown and people losing jobs and taking pay cuts and having, you know, think areas of their work that will completely just disappeared overnight. That will rock that sense of security and safety. And so when we hear these stories from other people about well, I’ve just sold my business for a few million pounds. Then we start to question our own self worth. Well, why haven’t I done that? And I’m completely capable of doing that. And then you start to go into those negative emotions that we connect with money. Now those negative emotions that we connect with money come from two main sources, they come from our personal relationship with money and our cultural influences around money. So culturally, in Britain, for example, if you go right back to the aristocracy days, it was all about land and title. And if you didn’t have land, you didn’t have title, you had no value or worth in society. Now, whilst we don’t have that cultural belief, now, it sits in our British history. And so you can see that when we learned about it in history at school, it’s about land and title and who you marry and where you live. And particularly as a man as well, it was all about being the provider, going out, doing work and being a provider. And so when we think about it, just culturally, that can have a huge impact, particularly for men on their position in the household when it comes to wealth creation. And that’s when your meaning and purpose when you hear stories from others can start to filter through those beliefs, not just culturally, but also your personal experiences and how you grew up around money. And if you think about them as like filters, your mind has to get through all of those filters before you can then do just as what you did, Chris, and bring yourself back to the present moment. That actually this has nothing to do with me, this has nothing to do with my own ability. Chris 31:26 That we’re talking about emotion over logic during all of this in many ways, aren’t we? Yeah, without that the other ones that there was I’ve got that right. Emotion over logic was one of the six I think you mentioned I was furiously writing away, as you were telling me. But certainly that little story I told, you know, that would definitely was me, me having emotion of over logic. So I guess every emotion of logic is one of them. And then what can we do to stop ourselves from taking what is surely quite a natural reaction to be emotional rather than logical? Catherine Morgan 31:55 Yeah, I think the first thing is to understand the triggers, and then manage the emotion. So a lot of people talk about how negative anxiety can be in depression and things like that they’re not actually negative at all, they often serve to protect us and shield us away from harm and pain. So if you were to draw on a piece of paper, an arrow, and in one direction, you’ve got pleasure on one side and pain on the other, it’s about our brain’s ability to protect us from pain and drive us towards pleasure. Now, there’s lots of human biases, which I won’t talk about right now. But there’s lots of biases that can talk about when we’re driven more towards pleasure and away from pain, that loss aversion, for example, but when emotion overrides logic, then it’s either because we’re trying to protect ourselves from pain. And that may be because of a trigger or something that’s happened in the past. Financial forgiveness is a huge area of work, we often do have to forgive ourselves for things that have happened in the past. Because if we hold on to those beliefs, then they self sabotage. And they affect our sense of self worth and well being. So that that’s definitely one of those areas. But the emotion that we feel will be either what we think is negative, so anxious, or stress, depression, those sorts of feelings, or we have positive emotions connect to emotion. So that can be happiness, joy, pleasure. So the first thing is to understand when emotion overrides logic is almost thinking of that emotion, almost like a sub personality, a completely different person. So when, when emotion plays highly for me in a negative way, so for example, I don’t know let’s say I was going to show up on a Facebook Live and I’m thinking, Oh, God, I can’t do that. Because I’ve got spots all over my chin, and I, you know, I haven’t had my hair cut in 17 weeks. And we come up with all these reasons like that inner critic comes out, if you think of that inner critic as a separate person and give it a name. So my inner critic is called Emma. And I have another one called Elvis, but when Emma comes out, then I just think, Okay, so what you’re trying to tell me here? Is she trying to protect me? Or is she trying to give me a message of some description to maybe help me to do something that I may be just not feeling very confident enough to do? And understanding the triggers behind those emotions is really important. So one of the things that massively triggered me to overspend in my 20s was this over riding sense of unworthiness and body shame, because I didn’t feel comfortable with my body. I had eating disorders all through my teenage years, and I was badly bullied at school. And so for me, every time I felt bad about myself, I would spend and because the feeling was, well, if I spend money on clothes, I’ll feel better about myself. But the trigger was not feeling good enough. Not being worthy enough. And so I did a lot of work around just repeating to myself every day I am worthy. I am good enough. I always have And I always will be and I had this like money manager that I’d save on a screensaver on my phone, I’d have it written on my mirror, when I was doing my makeup every morning, I’d have it, have it as anchor points when I was brushing my teeth, I’d have it on the mirror there. So that I constantly reaffirm this belief that I didn’t have growing up that I was worthy, and I was good enough. So understanding triggers, and then managing the emotion to think about, okay, is this serving to protect me? Or is it there to self sabotage, in which case, Mr. You can just thank you very much for that message. But you can just disappear right now, while going through that Facebook Live. Chris 35:37 I thought you were gonna use another word were to Emma, just for a moment there. I don’t like me very much. I don’t like the sound of her. It sounds to me, I mean, we kind of running out of time, we need to just go the last couple. But thank you for sharing that Catherine. And the message that I get from that is that this takes work, it’s not something that’s just gonna happen, you’re just suddenly not going to become better make make much better money decisions, you do need to put a bit of effort into it. Catherine Morgan 36:03 Yeah, and that. So that leads on to Tip number four, which is about those beliefs. So just to kind of summarise that belief system and how it works. And we, money is largely emotional. It’s the meaning that we attached to money that forms our set of beliefs and thoughts. And so one of the great things to do is to think about what your money story is, what messages did you hear growing up about money, that will then sit in your subconscious beliefs as your unconscious belief system, and that becomes almost like a compass, or a navigator that navigates our internal belief systems that drives how we behave. So if you’ve got a piece of paper, and you’re listening to this, write down three things, how we think, how we feel, and how we behave. If you want to change how you behave around money, or your wellbeing, you’ve got to first of all change how you think and how you feel. So how you change how you think, is to start bringing some curiosity and awareness to what some of those money stories are, because you’re anchoring every thought about money on that belief system. And that’s when you can create money blocks, because you believe that money doesn’t grow on trees, because that’s what your dad said. And that becomes your navigator. Well, if money doesn’t grow on trees, I’m never going to create enough of it. And that creates that feeling of not enoughness. So you can see where that those kind of thoughts can develop into our behaviours around money. Chris 37:27 So the last couple that we have is being unprepared and the physical versus mental. So what does the unprepared, I mean, that sounds like you just get prepared. That’s right. Catherine Morgan 37:40 Yeah, it sounds like really simple, right? But there’s so so often we don’t get prepared, we don’t get prepared because of inaction. Because we don’t feel confident enough. And that could be because you, you just need to go and learn about something you need to learn how to go and budget or learn how to manage the emotions or learn how to implement different systems in your business, for example, or in your personal finances. That’s just about understanding. But it is also connected very deep into the emotional belief system. So that’s why you can say, Well, I’m not prepared. I haven’t got a spending plan in place. But the reason you haven’t got a spending plan, plan in places is likely to do with your belief systems and the feelings you are attaching to money. Chris 38:25 It’s about taking those conscious steps, isn’t it? I always, I always compare this to playing the guitar. So I play guitar. Anybody who’s been on a zoom meeting with me over the last few months? No, it’s not far away from coming out. And a lot of people, especially older people, I wish I’d played the guitar, but you know, I’d never I’ve never really bothered. And I always say to people go on then learn to play, oh, no, I’m too old. Now. I can’t do anybody can learn anything. Well, not quite anything. I’m never going to be good at football, for example. But anybody can learn to play an instrument, it doesn’t matter. If it’s just you’re not really good, you still get joy from playing it. And I always say to people, 10 minutes every day, that’s all you need. If you picked up that guitar, and just did a bit of practice for 10 minutes, every day, within a year, you will be passible at playing on the guitar. So you’ve just got to set aside some time to do something. So let’s finish off then with physical versus mental. What’s that all about? Catherine? Catherine Morgan 39:19 I think that that there’s a there is a big connection between our physical wellbeing and our mental wellbeing and we do need to look after both. But often there’s a clash isn’t there between Well, there’s all these things I want to do and learn and you know, actually I’m not feeling great and my mental health not great, but my physical health not great. So it is understanding that the two are very much connected. So the more you can do around your mental wellbeing will support your physical wellbeing and vice versa. So things the simple things like, you know, having a gratitude diary or doing a daily mood analysis, just to bring some curiosity to Okay, so this is how I’m feeling. Or this is the problem for me right now. How do I support my mental and physical wellbeing. And we can all see from recent events of lockdown. If you’re listening to this, we’re recording in July 2020. So if you’re listening to us right now, you’re just we’re just coming out of lockdown. And our physical wellbeing and our mental wellbeing has been hugely stretched. So that it’s a constant balance between the need to look after both. Because if you just focus on one and not the other, then it’s not going to support your overall well being and your mental wellbeing 100% I really believe that financial wellbeing is not just about the practical stuff, it’s not just about the practical stuff is actually more important to learn how you can influence and to help how you feel about money first, before you go on to the practical steps. Chris Fantastic. Catherine, we could talk for hours, we know that because we have done! This has been a fascinating overview. I would just mention a few of the other podcasts that we’ve had on similar subjects, we’ve definately covered different topics. But we’ve had Simone Gnesson on quite some time ago. We’ve also had Mark Bristow, Neil Bage and Greg Davies have talkied on behavioural stuff. So we love all this sort of thing and you’ve bought some really interesting insight to it. Thanks, really, really appreciate you joining us. Catherine Morgan You are welcome, thanks for having me. David Really interesting chat that, it struck me that Catherine is a bit like a psychotherapist really. In which what she needs to do and she talks about it in that interview, is to sit back, listen very carefully to what the client is saying and then reflect it back in a way that they can learn from it. And I do like the way, and Chris you picked yourself up on it, at the begninning of the interview you both agree that the worst thing you could do as a financial coach is to introduce your won stories into the meeting because by doing that the client might pick up on what you’re saying. And perhaps re-invent what they’re saying because they want to please you. So it’s very important that we sit back and don’t tell a story. And then half way through you went ‘Oh, that reminds me of a story I want to tell, about a guy that just sold his own business. And actually, the anecdote you gave was perfect, but it just goes to show. And the reason I recognised that in you is because I do that aswell. You know we always think we want to tip in with a story. Chris I didn’t say I was ever any good as a financial coach! There’s a point just there I want to make actually, about this word coaching, because it gets used a lot in a lot of different ways. It’s really important that the public know what they are getting when they go and see somebody. So we would talk at Ovation with Tommo, we would talk about having a coaching first and then planning and then advice approach to financial planning. I have been talking at confrences for a decade now about this coaching, then planning, then advice. Coaching in this context, we’re talking about using coaching skills, listening and questioning skills, to help a client do the ‘know thyself thing’ that we talk about. Understand what will make them happy, OK. So it’s really a very broad use of the word. It’s about listening and questioning skills. You don’t bring any of your own agenda in, you just help a client to think. Thats what we are talking about with coaching there. A financial coach will have those skills, but they are bringing in skills to talk about a specific topic, which is your relationship to money. So it’s a different thing. It’s still within the same world if you see what I mean, but it’s a different skill set. There’s one extra bit to add to that as well, which is if you go to see a financial coach, they are unregulated. They are not regulated by the FCA. They won’t be giving you any investment advice or anything like that. They are focassing on talking about your relationship on money. So actually, perfect world, you’ll use a financial coach and then you’ll see a financial adviser who uses that coaching skill, that coaching, then planning, then advice. That for me is the perfect combination. David Excellent. And listening to Catherine, I found it very interesting in that, and I mean this with no disrespect intended to her at all, becasue I can listen listen to her all day actually, but there wasn’t anything she told me that I kind of don’t know already through having done all these podcasts that we’ve done. So she really reinforced a lot of the messages that we’ve been getting across. But did it in a way that I found quite compelling. Chris And one of the things that I found over the years, in the next podcast we are talking about self-determination theory for example, it took me about eight readings of that idea to get my head around it. So actually you do need the same thing said to you several times to really start to get into it. But Catherine also goes quite deep into this stuff when you get into some of her podcasts and some of the stuff she does. She does get very much deeper into some of this relationship stuff. David Yeah, and she’s got her own website aswell, so if you want to find out more about Catherine and her work you can find her on ‘tinternet. Tommo, is there anything you would like to add at this stage? Producer Tommo No, other that we will try and add something to the show notes. But I think I would echo everything you said. I’ve know Catherine for a number of years now and she’s doing some great work, so really great to have her on. As Chris said, how it’s taken this long for her to be on the podcast is beyond me. But she is now, so I hope you all enjoyed the interview. David Excellent, well as ever it’s been a huge pleasure to spend some time with you guys, if only virtually. Maybe soon, we will be able to meet up and do this in the same room again. Or maybe we will just decide we will carry on doing it remotely. Who knows. However, that’s for you listeners to find out at some point in the future when we come back for another one of our financial wellbeing podcasts.

Episode 75 – The Financial Wellbeing Audit Join the guys as they explore the the five pillars of financial wellbeing so you can ask the important questions and review your finances via a financial wellbeing audit. Along with Bage’s Behavioural Biases and some classic #tightasstommo tips. Have a listen to find out if you are on the right path. Welcomes and Introductions Link to Chris Budd’s book The Vanishing PointLink to David Lloyd’s audio book An Unwelcome ConnectionLink to the Initiative for Financial Wellbeing What is todays podcast all about – Bringing together what the guys have been talking about in various episodes of this podcast for listeners to maybe go through a Financial Wellbeing Audit, a little tester to see if you are doing the most with your money to maximise wellbeing? Bage’s Biases Every episode, Behavioral Finance expert, Neil Bage is going to be giving us his money behavioral tip. Exploring and thinking a little bit about the behavioral traits we have towards money can inform us, so we can make better money decisions going forward. – Link to Episode 36 – Understanding our attitude to risk – Link to Episode 21 – Financial capability –  Link to Bitesize Behaviour Podcast This episode – Availability Bias #TightAssTommo Featuring neighbours gardens, moving house and fuzzy webcams! (thank you to Emily Pool) Todays topic – The Financial Wellbeing Audit What is the Initiative for Financial Wellbeing audit? Ovation’s experience with the IFW Audit The Five Pillars of Financial Wellbeing: A Clear Path to Identifiable ObjectivesControl of Daily FinancesHaving Financial OptionsThe Ability to Cope with Financial ShockClarity and Security for Those we Leave Behind A Clear Path to Identifiable Objectives The difference between intrinsic and extrinsic motivations The difference between goals and motivations Do you have purpose and meaning in your life? Using a cash-flow forecast to find that clear path DIY versus a professional The Ability to Cope with Financial Shocks Have you got emergency cash set aside? Have you got sufficient insurances in place? Knowing that should something terrible happen, you will not have to worry about your finances. Key question – do I worry about how we would cope financially if something unexpected happens? Control of Daily Finances Budgeting Core understanding of how much is coming in and how much is going out. Does not mean free from debt – the difference between secured and unsecured debt Self-limiting beliefs Financial Coaches – looking at the emotional side and our relationship with money – Link to BeIQ | Beam App Clarity and Security for Those we Leave Behind Everyone with children should have a will Look to get Power of Attorney in place Key question – If something were to happen to me, would those I care about have anything to worry about? Shareholders agreement for businesses Conclusions from the guys – If you would like to purchase a copy of The Financial Wellbeing Book please click on this link to visit Penny Brohn UK shop If you would like to get in touch with Ovation, click here to visit the website email enquiries@ovationfinance.co.uk or call on 0117 942 4333 Do you have any financial wellbeing questions you would like us to answer? Or do you have a #tightasstommo money saving tip you would like to share with our listeners? If so, let us know by going to Twitter @Finwellbeing or email – contact@financialwell-being.co.uk Transcribe of the Podcast Script: (scroll to the bottom to listen to the episode) David 0:12 Hello everybody, and after a few technical issues at our end I’m glad to say that we are now in a position to bring you Episode 75 of the Financial Wellbeing Podcast. Chris 0:24 What was the technical issue David? David 0:26 Well it was to do with a microphone that have been incorrectly fitted by somebody that quite frankly should not be doing this sort of work. It was me! I bought myself a new headset and a new microphone, because I felt that the richness and gravitas of my voice was not coming across properly with a slightly tinny what I had before. So I bought myself this new headset with a new microphone, we were try to get it to work, as you well know, because we just spent 15 minutes trying to do it. And it turned out that the connection was slightly loose on my microphone and that’s why nobody could hear me. I fixed it now though, and I hope that you’re all absolutely loving the beautiful tones of my melodious voice. Right, there’s a conversation stopper. Okay. Having said all of that, we are here to talk about all matters, financial wellbeing and with me are two people who’ve been doing it for as long as I have. Well, one of us hasn’t quite actually, but that certainly one person that has, Chris Budd, Chris tell us about yourself. Chris 1:30 Thank you David, I think I’m right in saying that it’s five years since we started doing this podcast it’s not? David 1:36 It is, we met in my house actually for the very first one, and then we had to give up on that because my dog insisted on snoring. My dog, bless her is getting on a bit now. Yes, she still snores, but she’s fortunately snoring in another room. Chris 1:56 So, I wrote the Financial Wellbeing Book, founded an institute for the Initiative for Financial Wellbeing. But the main thing I want to be plugging, is that new book of mine, The Vanishing Point, you’ve got a new novel out. David 2:07 Oh you have indeed. Yes. How’s that going? Chris 2:10 Well I’ve had three reviews, and they’ve been very positive. It’s very early days, it’s, you know, David because you have your book recently but you’ve got your audio book out David 2:20 Exactly as far as just come out and an audio version which I recorded myself and as we were comparing notes the other day, you know, trying to get your novel out there is not always easy but though it’s, it’s fun. Well I’m glad I’ve got yours on my to-read list, Chris, it may well take me a while to get there but I’m certainly I’m looking forward to reading that. Chris 2:38 Just a quick question when you did the audio reading for your audiobook did you use those headphones and was it plugged in properly? David 2:45 No actually went to a professional studio where they knew what they were doing. Right, okay. Anyway, that’s enough of us, and our literary endevours. Who else we got with us today, Tom Morris. Producer Tommo 2:55 Hi everyone. Can you remember Richard in Judy’s book club? David 2:59 I can indeed, yes. Producer Tommo 3:00 yeah, I just had a little . . . Well I didn’t watch it, so I’m assuming this is exactly what it was like, just two people waffling on about book. But as someone who doesn’t particularly read much. I switched off for a second there. I’m joking. Congratulations both of you, writing, writing a novel is no mean feat. Yeah, anyway. Yes, Director and Chartered Financial Planner over at Ovation Finance, where we try and apply all his theory around financial wellbeing and I think we’re going to dive into some of that today. But also involved with the setting up of the Initiative for Financial wellbeing, which is going great guns, so if you are in the financial services profession or industry however you want to call it, go and take a look. Initiative for Financialwellbeing.org.uk We’d love to see you there and talk more about this particular topic. David 3:52 Excellent. Well I think that Tommo has perhaps deliberately, perhaps inadvertently, given us a little insight into what we might be talking about today. Chris would you like to elucidate. Chris 4:06 Nothing will give me greater pleasure. Today David we are going to bring together lots that we’ve been discussing, by giving listeners a Financial Wellbeing audit that they might wish to take themselves through. David 4:16 Excellent, so we’re kind of doing a bit of homework really aren’t we, seeing if people have been paying attention over the last five years? Chris 4:23 Yeah, there’s no exams anymore, are there, becasue of lockdown. So yeah let’s have our own little version of exams. It’s not an exam. It’s a it’s a pathway you might say, but a little tester just to see – are you doing the most with your money to maximise your wellbeing? David 4:36 Excellent looking forward to that. But first up we have our regular feature Bage’s Biases. We’re an old friend of the podcast behavioural finance expert Neil Bage will give us his one minute introduction to a different behavioural bias that effects how we make decisions about money. This week, Neil tells us about Availability Bias Neil Bage 4:59 Availability bias. The availability bias is where we rely too heavily on information and we can immediately think or see. It’s our tendency to judge stuff by how easy examples can either be retrieved from memory, or information that is laid out in front of us, as it is on the news, for example. The media plays a significant role in generating availability bias, even if we’ve never experienced something firsthand. The fact that the news shows us vivid images of events, positive and negative, means certain things are easier to recall, even if we don’t have personal experience of them. We can find many examples in the news reporting on plane accidents but we’d struggled to find a news report of someone suffering a heart attack, which is so much more likely than a plane accident. Or we could find examples in the news reporting on a person who was just had a massive lottery win, but you’ll never find an article about a person who worked hard, saved into their pension from the age of 25, and is living a very happy and financially stable retirement. David 6:11 Fascinating stuff that so I think the message from that kiddies is don’t believe everything you read in the papers. Chris 6:17 And certainly don’t make, make decisions and take action based on what you believe. And social media, obviously as well. Tommo what, what does availability bias mean in financial planning terms do you reckon? Producer Tommo 6:28 I, I would say, when it comes to things that we know a lot about already, we tend to be quite focused on it. For example, people understand the idea of cash, and the idea of savings in a bank account. What they struggle with the idea and mainly down to a lack of education from an early age, is the world of investing and stock markets for example, and they see it as quite a scary place to be when actually stripped down is just an avenue to be able to invest in lots of great companies in the world in a very diversified way and hopefully your money should be growing better than it is in cash, which is great for the long term because inflation is a killer. So I would perhaps say it’s the, not understanding certain things and understanding a lot about other things, stops people potentially making decisions that would improve their financial situation. Chris 7:27 I’ve got an example of that, actually, which we could go a real rabbit hole if we if we got into this so we won’t but Bitcoin cryptocurrencies. We see on the news that somebody, or on social media, somebody says I just brought a house because I sold my one Bitcoin, you know, and you’re gonna buy some bitcoin, which of course is possibly the very worst thing you could do, because that way everybody invests in the market and then get into investments at the top of peaks of cycle of investment so that’s just one little example for me. David 7:57 Yeah, I was phoned up the other day actually by somebody tried to sell me Bitcoin, it was a very brief conversation and on one sideded one. Chris 8:04 One bitcoin is 46,000 pounds at the moment. Producer Tommo 8:07 Yeah David 8:08 I mean, my son who’s kind of follows this stuff quite closely because he’s a self confessed bit of a nerd, I mean he does point out that had you gone to Bitcoin when they first came out, that your Bitcoin would be worth an absolute fortune now. But as you say, what you don’t want to be doing is going into the top of the market so even I, in my financial naivety, know that! Producer Tommo 8:29 Do you know, I might make a point here, and I might be proven completely wrong. And it might go to the moon as they say. But isn’t it meant to be a currency, and with it being so volatile, it goes up and down in value so much, isn’t that defeating the exact point of its existence? And also you’ll see lots of cryptocurrencies pop up that don’t have a lot of basis behind them. Folks, that’s not investing. That’s speculating. Chris 9:01 Gambling Producer Tommo 9:01 It’s gambling. It is gambling, and you know what, if you’ve got a portion of your money that you, that scratches an itch for you. Fine. But don’t think that that replaces a well thought out boring, diversified investment portfolio that you put in each month, see it grow for the long term. That’s going to give you your financial freedom in the future, is by doing that, rather than punting on what some form of cryptocurrency is going to do because quite frankly, it doesn’t produce an income. Its value is only worth what somebody else says it’s worth. And I can’t help a fear, fear it feels like Tulipmania back in the old Dutch example in the 1600s. But anyway I can be proven completely wrong, it could go to the moon, it could be worth a million pounds a Bitcoin, but just beware. Chris 9:57 That folks is why Tom Morris is a Chartered Financial Planner. David 10:00 Exactly. If I was, if I was to encapsulate the almost five years of Tom Morris’s contributions to this podcast I would say that’s right up there with the best advice. Chris 10:12 Maybe we should do that Tommo’s, Tommo’s highlights. A highlights reel of Tommo, like American shows they sometimes after about five series have a clips show. Maybe we should have a Tommo clips to show? Producer Tommo 10:25 That sounds awful for the listeners, so let’s not. David 10:28 I think we just jumped the shark there everyone. Producer Tommo 10:31 Yeah I think so. Would you mind if I if I make a little plug for Neil, we were introducing some of his biases and then talking around, talking around the subject, but he does actually have his own podcast out now. And I thought it’s worthwhile pointing the direction where he goes into a little bit more detail on this, and it’s called Bitesize Behaviour Podcast. So I think you can find it all in all your relevant podcast apps, whatever you want to call it David 10:59 Brilliant, perhaps we could put that in the show notes as well. Alright that okay that’s great so let’s move on now to the next of our regular features before we start doing our homework, which is of course #tightasstommo as you know, where Tom Morris our master of meanness comes up with another brilliant tip about how we could save a little bit of money but before we come on to the supremo himself, Chris, if you’ve got one this week? Chris 11:06 I do, yes, we have a chap who comes around for half a day a month to do a bit of gardening for us. Matt. And I was talking to him and I said look, I’ve got this podcast recording and I wouldn’t mind a tip, have a think. So he had a little think, he came back and he said, I’ve got a good one for you. He said, look, save money on gardening, cecause if you like looking at a nice garden but don’t want to spend any time or money on it, just take down your fencing, put you’re sitting at the edge of your gun, and then, enjoy the lovely view provided by the neighbor’s garden. David 11:55 He’s doing himself out of a job. Chris 11:56 Well I thought about myself there. He’s shot himself in the foot a bit. David 12:01 I’ve got one, which is, I’m actually in the process of moving house. Well, not actually the process now of moving house but I bought another house that are going to be moving. Just moving half a mile up the road, so I’ve been ringing around starting to get quotes from removal companies, and they’re just starting to come in now and as ever, there’s a divergence of amounts. But it occurred to me that given that we’re not going very far. Rather than get a removal, I could just get my mates in the village to all sort of muck in. So Chris, you’ve got quite a big car. So I was thinking maybe you could just put aside, probably won’t get it done in a day might take a week, perhaps to just shuffle up and down between my old house and my new house is just around the corner from your house, with a few boxes of stuff without me. All right? Chris 12:48 Yeah not a problem, in fact we can we can work on this because you’re very popular. Everybody likes David Lloyd. Let’s get everybody to form a great big long line between your house and the new house, and we’ll just like, like the old fire buckets when you know putting out the fire, we just pass a box all the way up the road. David 13:04 Even better, Chris, I think you’ve solved my problem now and save me a couple of grand in the process. Chris 13:09 And saved me a week of work as well. David 13:11 No, you’re gonna be in the chain. Your a part of it Chris. Right okay, so that’s our slight silliness. Tommo, what have you got for us? Producer Tommo 13:20 This one was shared with me. It’s not one that I’m going to use. I don’t think. This was shared with me buy, with a fellow fellow financial planner. Somebody is actually involved with the IFW. Emily Pool. And she said, Hi, Tom. I have a tight as tip for you. My makeup is running a little bit low. And so I thought I would smear the camera lens on my laptop for a filter effect works a dream. Yeah. It’s not something us gents usually have to worry too much about. But yeah, there you go a bit of a silly, silly tip for you today. For you Men who do wear makeup. And for you ladies you do as well. David 14:02 Maybe that’s why my microphone didn’t work earlier maybe I was smearing makeup on it? Okay, let’s move on now to the main thrust of today’s debate Chris, why don’t you introduce our subject for today. Chris 14:16 Thank you David. So regular listeners will remember that beginning of 2020 We started a new institute called the Initiative for Financial Wellbeing, or IFW for short. It’s for financial advisors to learn about research on happiness and how to apply it, as well as to meet other like-minded financial advice professionals. So one area, we’ve developed with the IFW is an audit, to help firms who want to market themselves as being experts in financial wellbeing. David 14:42 Now it’s interesting that you say market themselves as opposed to actually practising financial wellbeing. Chris 14:48 Yeah unfortunately there are some firms have been doing this purely for marketing purposes. There are some small firms but also some very large well known advice firms who have put the word financial wellbeing, into their marketing but don’t actually make the wellbeing of the client as a focus of their advice. They might not meet the client regularly for example or they only talk to a client about their investments or financial products. David 15:09 Well that’s marketing for you. Chris 15:11 Quite. So as a result, the IFW has developed this financial wellbeing audit to check on whether financial advice firms really do provide advice that aligns with known theory of financial wellbeing. In doing this, though, we also then give them a pathway for how they might develop their advice processes. So if you see a firm using the phrase financial wellbeing in their marketing, and they are proudly displaying the IFW logo. It means they have submitted evidence to the IFW two prove they really do focus on financial wellbeing of their clients. David 15:41 Okay so what sort of things do you look at in this audit? Chris 15:46 Well I thought we might go through some of the areas so that we can create a kind of personal financial wellbeing audit that listeners can go through themselves. They can do this on their own finances to see if they’re doing all they can to maximise their own financial wellbeing. David 15:58 Yeah, presumably, any financial advisors that are distinct could consider the audit for their own firm? Chris 16:04 Absolutely and what would be really perfect, would it not, would be to have somebody from a firm that has passed the audit to join us in this discussion? David 16:12 Now where could we possibly find one of those? Producer Tommo 16:18 Over here, over here! David 16:22 A Smurf had suddenly, Tommo, has Ovation passed the audit by any chance? Producer Tommo 16:29 Glad you asked. Yes we have, we have, we went through it a few months back. Now, I’ll be quite honest about our experiences, you can imagine we were steeped in this whole financial wellbeing, stuff through the podcast with myself and Chris, and we do an awful lot of this before this all kicked off. Bit i’ll tell you what, it was a rather challenging audit to go through, he really had to get your evidence together and really pull it together and there was a couple of areas that we put it for submission and we got some really positive feedback. You know what, there’s a few areas you can tighten up on here and there and it was purely evidence in the conversations we were having with clients to actually see it repeated back to themselves, you know, good example was, we’ll touched on it later on, this idea of clients motivations, and what makes them happy. You know, are we linking what their budget is telling them to these clear motivations we’re having these conversations but actually we really need to be shouting to clients about, you know what, this part you’re spending should be linked to this part of your life because it’s really important to us, yet some great stuff came from it. But yeah, it got us thinking about our processes and tightened up a few of them actually so yeah really positive experience. David 17:51 So Chris, what’s the audit based on I’m guessing you’re going to be using the five pillars of financial wellbeing is that right. Chris 18:11 Yeah, absolutely, it’s, the five pillars form the basis of all that we do with financial wellbeing within the Financial Wellbeing Book and also in the IFW so maybe you could remind everybody what they are. Producer Tommo 18:22 I can, indeed, Chris 18:24 Off the top of your head, don’t read them. Producer Tommo 18:27 I’ve been living and breathing this. I try and do it in a particular order. So, there is, firstly, a clear path to identifiable objectives. Control daily finances. Having financial options. The ability to cope with financial shocks and clarity, and security for those we leave behind. Chris 18:52 Really, it’s almost as if you didn’t need to read that from anything at all. Producer Tommo 18:56 No, off the top of my head, didn’t need any, any help there at all. Chris 19:02 I did a talk once and you know how – so there’s five points that are really important and by the time you get to the third, youve forgotten the last two. Did that in a talk at quite a big event one time, had to get my notes out out, rather embarrassing. Anyway, let’s look at the first of those then – A clear path to identifiable objectives. And let’s double click on that word objectives. David 19:22 Right now just to demonstrate how much I’ve been listening over the past five years, I’m going to predict, with I think you’ll find, an uncanny accuracy that you’re going to talk about intrinsic motivations. Chris 19:34 We are indeed. Episode 42 of the podcast with Professor Tim Kassar if anybody wants to go back and listen to the, when this topic first came up. Producer Tommo 19:44 Let’s just remind everyone what that means and some of the things that were discussed in some classes. Two types of motivations or reasons for doing things. Extrinsic and intrinsic. Extrinsic means you do them for some sort of external result or reward, whether that be financial or status, or maybe punishment. That sounds rather dark! Intrinsic motivations on the other hand, don’t have a particular reason, you just do it because you want to. We might call this doing something meaningful. Something that gives us purpose. Chris 20:22 And research shows that achieving an eextrinsic motivation does not add to our well eing. But achieving intrinsic motivation does increase our wellbeing. So if listeners are thinking about their own financial plans, ask yourself whether it creates a clear path to achieving an intrinsic motivation. Some of these could be specific goals, because you can have an intrinsic goal, but some do need to be a longer term motivations and purpose. David 20:49 I’m sure I’ve asked you this question before Chris, but can you give me an example of the difference between goals and motivations? Producer Tommo 20:57 I might jump in here just because I’ve seen this example pop up a lot of clients. So most people when you ask them what they want to do in retirement would say, I’d like to travel more. But this is intrinsic rather than extrinsic, as there is no output as such. However, it’s a goal, not a motivation. The difference being a goal is finite, it has an end, whereas a motivation doesn’t. Chris 21:23 Let me give you another example of motivation, could be learning an instrument. If you learn to play the piano, in order to get a job at your local bar paying customers. That’s an extrinsic motivation. If you learn the piano because of the sheer joy of music, that’s an intrinsic motivation. David 21:40 Right, so they don’t need to be deep, life changing issues then? Chris 21:44 No, not at all. I’ve been reading this graphic novel series about the life of Buddha. And I just realised that might just be the most pretentious sentence you have heard for a while! David 21:53 Well, I have to say there have been a few contenders over the years, that was right up there. Chris 22:04 Well I’m gonna carry on regardless. There is this line, where the young Buddha asked his disciples the following question. “Are you doing something in your life that is important to you, important to someone else, or important to everyone?” It doesn’t mean everything you do needs to be important, but a meaningful life is gonna be one that has at least one of those in it I would suggest. David 22:27 So the first check on the financial wellbeing audit checklist is, is whether you have meaning and purpose in your life, I’m sure we could all agree on that. Well, what next. Producer Tommo 22:37 So we’ve got something to aim for. We’ve established some identifiable objectives motivations, goals, what needs to be intrinsic. Then we need to make sure there’s a clear path towards them. For us as financial planners this really means using something call a cash-flow forecast. This is simply a case of understanding everything that you’ve built up to now, you know your savings, your pensions, house, mortgage left understanding what that meaningful life will cost, or does cost already. And then plotting it out over many years, to see whether you run out of money or not. Whether you can achieve these things or not. You know some things that come up are, can I reduce the hours I’m working to do something that does provide a bit more meaning in my life? Can I stop? It’s all these questions get answered via this cash-flow forecast it really starts to prove whether there is a path towards these objectives. David 23:42 And is this something people could do themselves? Producer Tommo 23:45 Arguably yes, depending on how simple people’s situations are. Sometimes it’s a glorified spreadshee. Arguably for many people it’s a bit more complex than that. You’ve got things like tax rules to comprehend. You’ve got to make sure you’ve got sensible investment growth rates. Do you understand that pensions, the details that you’re putting in? And I think sometimes having a professional on your side to just make sure that what you are forecasting isn’t packed full of incorrect assumptions I think is really important. David 24:19 Yeah, it’s worth pointing out though as well that if you feel that’s not for you that the Financial Wellbeing Book does provide a template for it does that, if you want to do it yourself. Producer Tommo 24:27 It does indeed, but but I would seriously caveat that just make sure that the assumptions you’re putting in are correct, because it only takes a small difference for it to make a huge difference over a 30 year time horizon. Just that, you’re guessing a 1% more growth rate will make a huge difference to the overall results of this cash-flow. David 24:48 Yeah, and from a client or customer’s point of view, I can certainly back that one up having gone through that process with you in the last few months. We looked at various options about how things might develop the various scenarios and it’s very interesting how things play out differently or could play out differently in the future, depending on the information that you put in. So yes, on balance, I think that’s very good advice. Do all financial advisors, offer a cash flow forecast? Producer Tommo 25:14 How do I politely put this, the good ones do. Yes. Chris 25:19 Can I just chip in with that. I was talking with my other hat on, you guys know I do a lot of advice to businesses on succession planning and the employee ownership trust, and I was talking to one owner recently and I asked him that question I always ask them which is – how much do you need to sell your business for, not how much is it worth how much do you need. And he said well I don’t actually know. I said, well, do have a financial advisor? He said yes. I said, did he do a cash-flow forecast for you. No. Well, I don’t really think they have a financial adviser that to be perfectly blunt, because if you’re not helping people to make big decisions like that, then what is the point of view financial advice. Anyway, just climb off soapboxe for a second. Producer Tommo 25:58 Just to give a bit of an idea of what people would likely experience if, if they had a financial advisor, planner, using this cash-flow for forecasting technique is they will use sophisticated software that helps with a lot of that technicality that I talked about previously to make sure that you know what you’re seeing as a visual, it’s very visual, which is easier for a lot of people to understand and see and rather than numbers on a spreadsheet, but also a bit more trustworthy then perhaps a DIY spreadsheet that’s, that’s how I will finish that particular point. Chris 26:32 Amen to that. So that we will crack on. Next on the list of the five pillars, we’ve got the ability to cope with financial shocks. David 26:39 Now I could speak with a bit of personal experience on that so a year ago, March 2020, we suddenly went into lockdown, I had five sources of self employed income which dried up overnight, and had I not have had some money put aside to deal with those financial shocks, I would have been in significant trouble. Producer Tommo 26:59 So almost as though you’ve got a financial planner making sure you’ve got those things in place. Open goal that one wasn’t it! This is so true, having some money sitting in, set aside in cash. Cash ISA’s or maybe Premium Bonds, you never know you might be that one who gets that million pound win. Something that covers three to six months of expenditure somewhere around that mark, just so that you can dip into it, quickly, you want instant access cash here, that can just help out so should the brown stuff hit the fan, which, quite a few people experienced back in March 2020. So that’s one area we can look at, but also it’s worth checking whether you have sufficient insurances in place. On things that matter the most. And what I mean, are you know if you’ve got, loved ones who would struggle if your income wasn’t there. Life insurances, if you were dead, for example, or if you were unwell and unable to work, so things like critical illness and income protection are important things to have just to have in the background so you can make sure that you’ll be okay. Chris 28:08 So the important word in that pillar is the word ability, it’s the ability to cope. It’s knowing that should something terrible happen your finances will not be something that you have to worry about that leaves you free to get on with your life. David 28:22 Yeah, I’ve certainly found the whole process of engagement that means that I don’t worry about money like I used to, I worry about a whole load of other things, but not about money, Chris 28:31 Great line for George Michael I’ve always loved “money doesn’t make you happy, it just gives you different problems.” The question to ask yourself here is do I worry about how we would cope if something unexpected happens? And if the answer to that is yes, in this audit that it might be that this pillar of financial wellbeing needs a bit more thought. Producer Tommo 28:50 What’s next we have control of daily finances. Now for many people who talk about financial well being. This is the big one. In fact, for many it’s the only one really they talk about, but as you see, five of these pillars, not one. Another word for this might be financial resilience. It’s budgeting, knowing how much is coming in, and knowing how much is going out. So you can see quite a core pillar that needs to be worked out and understood. Chris 29:16 I think we should get one with that the way that it doesn’t mean being free of debt. Debt can be a good thing, for example it enables us to own houses. So the key question to ask yourself on this one is whether you have used your income, in a way that brings your wellbeing. Producer Tommo 29:31 Can I just jump in here, just to clarify, debt. There’s a difference between your secured debt, which is your mortgages, and your unsecured debt which is your high, high interest rate paying credit card. So I think you’ve meant, things like mortgages and yeah absolutely with that comment, Chris Yeah? Chris 29:47 Thank you. Let’s go straight on to the fourth of the five pillars, if that’s all right. Just having financial options in life. Now there are two ways of looking at this, we might ask ourselves whether we have accumulated sufficient wealth to do the things we want to do. But another way of looking at it could be by identifying those intrinsic motivations, and then coming to realise that maybe we don’t need as much money as we thought we’d need. Producer Tommo 30:12 Another angle, if I may. I keep chiming in, sorry. One of these is those self limiting beliefs, are we comparing what we think will make us happy with others who are wealthy than us. So we are comparing comparing ourselves, you know keeping up with the Joneses, that sort of thing. Just by identifying what brings meaning to our lives may give us more financial options, because we’re not trying to compare ourselves to somebody else. David 30:41 Yeah, but how do we identify our own self limiting beliefs, it sounds like the sort of thing that’s just built into us and therefore it’s not going to be easy for us to take a step out and look back in ourselves and identify. Producer Tommo 30:53 That’s a good point, David, there is a growing community of what’s called financial coaches who actually really look at, look at the emotional side, and your relationship to money, David 31:07 Sorry, i that is that different to a financial advisor? Producer Tommo 31:10 Yes it can be now there are quite a few financial advisors and planners who will cover this, you know we talk about this sort of stuff with our clients to try and understand what money means to them. But really I think that there are the expertise here is with the financial coaches who are able to really unearth our relationship with money. Now helping us to uncover some of the biases we have those self limiting beliefs and we actually recently did a webinar with Lorraine McFall, who is brilliant, we did a webinar on this emotional connection with money for our clients. So I even believe you’ve probably got a copy via your newsletters you should definitely have a look, David. Chris 32:02 Another possibility is that you could try an app that Neil Bage, and his BeIQ comes to the head, but only on iPhone and Android, but I think it’s also PC based as well, or soon will be. It’s a series of games that you play, which will help you to understand your own behavioural biases which might be leading to poor financial decisions. Yes, yes. Producer Tommo 32:27 The question people should ask themselves, and I should just add with using this software with clients and it’s really, really fascinating some of the outcomes from it. So the question people should ask themselves here is, are my own money beliefs, and therefore my spending actually working against me, achieving my intrinsic motivations? You compare your spending to those intrinsic motivations, we talked about earlier, for example, are you buying things that don’t actually bring you wellbeing? A really good exercise for this and I do these workshops with employees, list everything that you spent over £100 on in the last 12 months. And ask yourself, is that still giving you wellbeing. If the answer is no, then we’ve got to really ask ourselves whether that’s what we should be spending our money on and it just helps free up more money, so that we can put it towards things that are gonna make us happy. It might even be that frees up money so that we can save enough to be able to do the things that make us happy, more in the future. David 33:31 So that only leaves us with clarity and security for those that we leave behind and this sounds like something that should be very easy to achieve. Producer Tommo 33:40 Absolutely. Everyone with children should have a Well, he certainly don’t want the courts deciding how to look after the children. You’d rather be the master of that one. But I’d also say, there’s something called a power of attorney, and should anything happen to you, somebody can make decisions on your, on your health and wealth. Certainly anybody over the age of 65 makes sense for them to have a power of attorney. Crikey, anybody should be looking at potentially having a power of attorney but certainly as you get older, you know, and your faculties could leave you very quickly, it’s important to have that in place. Chris 34:15 I think that’s a little bit cruel to somebody who couldn’t put the microphone in. David 34:22 Also will be able to 65 in three weeks time. Who are you two anyway! Chris 34:29 The question for people to ask on this one is, if something were to happen to me, would those I care about have anything to worry about? And it’s really important to note, by the way this isn’t just for families, it’s also for businesses, any small business with more than one shareholder should have a shareholders agreement in place. It is so shocking the number that don’t have a shareholders agreement. And I have seen personally what can happen when a widow needs to negotiate with surviving shareholders, and I know a particular example which ended extremely nasty with lifelong friends and split friendships up. So yeah, little point there about shareholders agreement, if you own your own small business. David 35:04 Right okay thanks for that Chris. So let’s summarise by repeating those five questions that people should ask themselves if they wanted to conduct their own financial audit. So firstly, are you doing something in your life that’s important to you, important to someone else, or important, everyone? Producer Tommo 35:24 You can also ask if they have clarity over how they are going to achieve those things. David 35:30 Yeah, so two do I worry about how we cope if something unexpected happened. Three, am I using my income in a way that brings me wellbeing? Four are my own money beliefs and habits working against me, achieving my intrinsic motivation? And five. If something were to happen to me, would those I care about having nothing to worry about? Chris 36:00 I recon the person took some time to sit down and go through those, but it’s really six questions if you add Tommo’s point as well, that could really, really get some interesting answers to people’s spending habits and how that they, how they manage their wealth. Producer Tommo 36:15 Can I just do a shameless plug, it’s nothing shameless. A lot of this is the foundation piece of the Financial Wellbeing Book, please go find it. The profits go to Penny Brohn cancer charity, you’ve probably all heard about it before, but you know it’s looking for work for it on all of this, so yeah. Shout out to that. Or, get in contact with Ovation and I’d be happy to have a chat with you! Chris 36:39 Nice. Nicely done. David 36:42 Very good, very good. So yeah so I think we’ve brought a lot of things together in this I said it was going to be a review, a bit of homework I hope you’ve all enjoyed this home. If some of it sounds a bit familiar and it’s refreshed your memory of things all well and good. Or if it’s your first introduction to this, I hope you’ve enjoyed that, and I hope you’ll join us next time when we come together to chat nonsense and also some sense with another one of our financial wellbeing, podcasts.

Episode 74 – Interview with Ash Phillips Whilst it is easier than ever to become and entrepreneur, there are still barriers to creating a successful business. The guys chat with special guest Ash Phillips, founder of Dffrnt, and explore how to find the right investors for your vision. With the brilliant Bage’s Biases and #TightAssTommo tips, after five years the Financial Wellbeing Podcast still going strong Welcomes & Introductions Happy 5th Birthday to The Financial Wellbeing Podcast We want to thank each of you, our listeners, for giving our podcast a chance and helping us grow. We appreciate the comments, feedback, and most of all, we love the ongoing conversations happening about financial wellbeing. Here’s to five more   What is today’s podcast all about? Guest interview with Ash Phillips, founder of Dffrnt – a community for founders and creators. The chat is all about democratising entrepreneurship and helping young people with start up businesses find the right investors for their idea. Bage’s Biases Every episode, Behavioural Finance expert, Neil Bage, is going to be giving us his money behavioural tips. We are hardwired to make bad decisions about money because we have biases built into us from our experiences through life. We will keep hearing from Neil to help us recognise some of these behavioural biases and hopefully lead us to making better financial decisions. – Link to Episode 36 – Understanding our attitude to risk– Link to Episode 21 – Financial capability– Link to Bitesize Behaviour Podcast This episode – Hindsight Bias #TightAssTommo Featuring scorned lovers and disgruntled friends Today’s topic – The best time to start searching for car insurance renewal quotes Interview with Ash Phillips Democratising entrepreneurship There is more awareness of becoming an entrepreneur for a career, yet there are still a lot of perceived barrier to access The main blockages to a new start up business Access to networks – “its not what you know, its who you know” The cycles of business fundraising Socio-economic divide that stops access to investors What are ‘angel investors’ Yenna/Dffrnt Those with experience helping out those just starting 3 myth busing tips about starting your own business Impostor syndromeSell something!Finding the right investor Click here for more information about Dffrnt and the support it offers to help start and grow new business Conclusions from the guys Do you have any financial wellbeing questions you would like us to answer? Or do you have a #tightasstommo money saving tip you would like to share with our listeners? If so, let us know by going to Twitter @Finwellbeing or email – contact@financialwell-being.co.uk If you would like to purchase a copy of The Financial Wellbeing Book please click on this link to visit Penny Brohn UK shop