So the short version of what could easily become a long story goes like this . . .
I had the good fortune of getting to know a great group of folks over the past couple of years. In this group was a CPA, a CFO, a manufacturer, an artist, an investment banker and a few other professionals, all of whom I’m happy to call friends.
Each person in this group has made a lasting impact on me personally and professionally. They’re a smart bunch, and it was a continual learning experience.
Today, I’d like to focus on just one of the people from this group. I’ll refer to him as “Mr. F.”
(That’s an Arrested Development reference as well if you’re keeping score)
Mr. F is one of the smartest people I’ve ever met. Maybe ever will meet. He’s a BIG thinker, and I could listen to him think out loud for hours on end.
Mr. F’s expertise lies in human development, particularly adult developmental models. Think about how we naturally act (and react) in personal, social and business situations, and you can begin to imagine the depth and breadth of this subject.
And Mr. F does a masterful job at applying adult development principles to the business environment to create thriving business “communities” where each employee – from the CEO to the person in the mail room – is a thriving, growing contributor to a company’s mission. And their bottom line.
I’ve had the pleasure of seeing Mr. F present on this topic multiple times, and I can’t begin to describe how interesting I’ve found it.
I think this is because it’s easy for me to see where I fall along the spectrum of developmental stages and how I might naturally default to one stage in certain situations while I have the capacity to perform in a higher stage in other scenarios.
What does this have to do with your money?
I thought it would be interesting to identify an “Adult Developmental Money Model” based on what I’ve observed and learned from Mr. F. And thankfully, he was willing to provide some input and insight along the way. In addition to help from Mr. F, I also got some great feedback from others while I was working on this.
When I first began to breathe life into this idea of an adult developmental money model, I came up with 5 distinct stages:
To put the above stages in context, a “spender” is externally focused (keeping up with the Jones’), seeks instant gratification (saving for the future is a challenge) and operates largely out of a scarcity mindset.
An “investor” is characterized by the ability and willingness to cooperate and work with others for mutual benefit. Their focus is pretty well balanced between internal and external. They are capable of looking ahead but still fall back on short-term thinking and tactics.
The “designer” stage is representative of our higher self when it comes to money. It reflects self-awareness, fulfillment and internal focus and satisfaction.
Here’s the latest version of my 5-stage model if you’re interested.
Upon thinking through the model above and with some helpful feedback along the way, my working model today looks like:
At first glance, it might seem as if I simply dropped the 1st two stages from the list above, and that’s what I did.
I made this change because in the 3 stages above, as adults we all still deal with spending and saving behaviors. Some of these are conscious decisions, while others are deeply rooted behaviors based on the role of money during our childhood and other money “scripts” we may unknowingly have lived with for years.
Rather than provide a detailed psychographic profile for each of the 3 stages above, I think it’s most helpful to think in terms of a story.
Let’s take a road trip. From Atlanta to Disney World in Orlando.
An “investor” is focused on “making good time” while traveling. Their attention is divided between how much gas is left in the tank and whether they’ll avoid rush hour traffic in the cities along their route. They embody a focus on short-term rewards instead of the fun they’ll have at the Magic Kingdom with their kids.
A “planner” is instead focused on “arriving safely.” They are long-term focused and want to do what they can to just get to their destination so they can then turn their attention to having a good time. A planner might take a step back to think strategically from time to time, but then it’s right back to short-term thinking and tactics.
The stage of “designer” is where I think we should all strive to be.
But trust me, it’s easier said than done.
If you’re a designer, you’ve struck a perfect balance between planning for the long-term while enjoying each piece of the journey. You want to “enjoy the ride” and are concerned primarily with the meaning that can be achieved through a road trip or any other life experience. You think strategically about which decisions will provide the most fulfillment (however YOU define it).
Here’s what I’ve built out around my 3-stage model.
Clearly, this isn’t black and white. Nor is there a right or wrong, in my opinion. This is just my attempt to do a little “thinking out loud” while inviting you to listen in.
I’d like to ask you to do two things now:
- Think about where you may fall along the stages of these developmental models, and
- If you work with an advisor, which stage(s) do you think he/she falls into?
I think it’s an interesting thought exercise, and if you’d like to discuss it further or you have any thoughts or feedback (which I love, by the way), simply reply to this email or pick up the phone and call me at the number below.