Financial Awakenings

What's Your Reason for Watching "The Apprentice"?

My favorite TV show theme song is The Apprentice’s “Money, Money, Money.” On rare occasions I have even been known to join my five-year old son, Davin, in jiving to it. Being the entrepreneur that I am, I enjoy watching the show to see the creativity and management decisions made by the contestants as they are given their various challenges.

A recent survey by Pew Research Center, reported by USA Today, suggests that many younger Americans watch shows like The Apprentice for a different reason. It feeds their dreams of becoming rich and famous.

Now, I have no problem with someone desiring to be rich or famous. Youthful dreams are important. Still, having a dream that requires a lot of money, as many do, is completely different from having a dream that’s limited to having a lot of money.

The Pew survey found that 81% of those aged 18 to 25 have a number-one goal of being rich. The second most important life goal for 51% of the respondents was to become famous.

The interesting twist is that today’s youth don’t seem to want to become famous as entertainers, writers, actors, etc. Instead, they want to become famous for being themselves, as modeled by many of the winners of reality shows.

A 2005 survey done by Higher Education Research Institute reported similar results, with 75% of college freshmen saying it was “very important” or “essential” to be rich. In 1967, only 42% said being rich was essential. It’s not surprising to note that, in 1967, 86% of college freshmen said it was “very important” or “essential” to “develop a meaningful philosophy of life.” In 2005, only 45% said the same.

The fact that eight out of ten young adults want nothing more in life than to be rich is troubling to me. I was under an illusion that the young people of today were actually more altruistic than when I was a teenager.

It is some comfort to realize that my own views on wealth and riches have changed over the years. Had I been one of those freshmen polled in 1967, I would been among those saying that being rich was essential.

Thirty years later, I see things differently. First, “rich” is relative and elusive. I’ve discovered that once a person earns more than $50,000 a year, rich is more a condition of the mind than the net worth statement.

Second, in my career I’ve worked with some very rich people and some very famous people. They have helped me see that being rich or famous offers its own unique challenges. I’ve truly come to value the previously unappreciated benefits of being upper middle class and unknown. One of those benefits is that I can be loved and accepted for who I am, rather than what I have or what I could potentially do for someone else. The rich and famous don’t have that luxury.

I wrote this on a plane, bound for a meeting in Florida. Sitting next to me was a 63-year-old retired CPA, a man well acquainted with money matters during his career. He told me what a privilege it was for him and his wife to live in the same town with their grandchildren. He summed it up by saying, “It doesn’t get any better in life than having good relationships with family and friends. That’s really what life is all about.”

If today’s 18-25 year olds are polled again when they are 63, I’m guessing at least 81% of them will agree. The older we get, the more we come to realize that it’s not about the money.

Home Ownership--The American Dream for Everyone?

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Owning your own home is an integral part of the American Dream. Like every dream, however, it isn't necessarily the right decision for everyone. Let's take a look at two examples of people who chose to rent rather than own.

Tony is a middle-aged man who has never married. For the past 15 years he has lived in the same small, inexpensive apartment. It is comfortable enough and certainly adequate, but that's about all that can be said for it. Tony doesn't care. He prefers to spend his discretionary funds on boating, snowmobiling, skiing, and travel. He also spends his free time on those activities instead of having to maintain a house and yard.

The Thompson family lived in a small rented house for nearly 20 years. The rent was low, which allowed the husband to do modestly-paid work he loved and allowed the wife to stay home when the couple's two children were young. Eventually, however, the marriage ended in divorce. Mrs. Thompson stayed for a time in the rental house, then decided she wanted a place of her own. Even though she was working and earning enough to live comfortably, she had a terrible time finding a house she could afford to buy.

In these two examples, renting was clearly the right choice for Tony. To me, at least, it was the wrong choice for the Thompsons. One important difference? Net worth.

Tony spent his money on things that brought value to his life, which included securing his financial future. While living in his modest apartment, Tony was investing. The money he didn't need to spend on housing went into mutual funds. Today, he has a substantial portfolio. If he chooses, he can quit work in another ten years, with enough income to travel, ski, and go boating as much as he wishes.

The Thompsons, on the other hand, saw renting instead of buying as a way to live on one income and raise their children in the way that was important to them. This was certainly admirable and worked well for them. However, the couple never managed to invest anything substantial for their retirement. Even when Mrs. Thompson took a job after the children were teenagers, her earnings went to help put them through college.

When the Thompsons divorced, they had no debt. Neither did they have any substantial assets. With no equity in a house, no investments, and little savings, to call their net worth "modest" would have been an exaggeration. Buying a house some 20 years earlier would possibly have been difficult and involved some sacrifice for the first few years. As their earnings increased over the years, however, the payments would have stayed the same and therefore taken a smaller percentage of their income. By the time the marriage ended, the house would have been nearly paid for. The shared equity would have given each of them something with which to start their new lives.

The second mistake the Thompsons made was to devote the wife's earnings to the children's education at the cost of their own future financial security.

Financial planners generally do not consider clients' homes as part of their assets. We consider home ownership as providing a place to live rather than as an investment. In most cases, however, it does also help build net worth.

Renting instead of buying can certainly work well for some. It is essential, however, to create net worth at the same time. Long-term renting can be a wise choice when renting costs substantially less than owning (think beaches and big cities), when you move frequently, or when you invest enough to assure your financial independence.

Past Performance is No Guarantee of Future - Even with Cruise Lines

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My family and I spent Christmas taking my daughter's "dream vacation," a Caribbean cruise. I'm not much of a sun, sand, and sea guy, so my enjoyment of cruising is based on relaxation and good food. I prefer to select a larger ship that has all the amenities and a well-rated specialty restaurant.

On this particular trip, however, I decided to make cost the priority. I selected the smallest ship in the Celebrity fleet, the Zenith, knowing it didn't have a specialty restaurant. Still, the price was attractive; almost too low, in fact. There had to be a catch.

I asked the reservation agent what the catch was. He said the ship was being sold in April 2007 to another company. Since this was an obvious red flag, I asked why the ship was being sold. I was told it was because it lacked Celebrity's trademark balconies, and it was being replaced with an even smaller ship that had balconies. I decided this wasn't a problem. Being the value-oriented shopper that I am, I don't purchase outside cabins, preferring the cheaper inside staterooms.

Still, I thought I should do a little more checking on the Zenith. I grabbed my trusty Berlitz Guide to Ocean Cruising and Cruise Ships and looked her up. They gave the ship four out of five stars and a pretty good review. I checked with www.cruisecritic.com, which gave her a favorable review and rated her equal to the Galaxy, a ship our family had previously enjoyed. Having done my due diligence, I booked the cruise.

Within two hours of boarding the Zenith, I knew I had made a big mistake. The ship was a broken down mess. There was peeling paint and rust everywhere. The decks were dirty, the furnishings were worn and tattered, and my toilet didn't work for two days. The computers didn't support the programs I use to access my office desktop. The gym didn't have complete sets of weights, yoga mats, or fully functioning treadmills. The kids' play area was so small and sparse that we had to beg our kids to go there—a first.

It was what you might expect of a ship being sold soon, where the owners were doing everything possible to minimize capital improvements and milk every last bit of use out of her.

Fortunately, not everything was a mess. The food was very good and the showers had plenty of hot water.

All in all, London's "dream vacation" wasn't what I had hoped for. Still, I can't look back and beat myself up too much about my selection process. I was reasonably thorough in my due diligence. There simply are limits to what one can research.

In part this is because the information available about a product, a cruise ship, or an investment is based on past performance rather than current or future conditions. Brokers who sell investments often rely on "past performance" as a selling point. What they tend not to mention is the fact that changing market conditions and many other factors can turn past performance statistics into a bunch of irrelevant numbers. In addition, there is always the occasional investment where everything appears to check out fine, but reasons no one could have anticipated make it turn sour.

Is it a mistake to trust a brand name or rely on past performance? Not necessarily. What is a mistake is to assume that those elements are a guarantee of satisfaction. Whether it's a cruise ship or an investment, it's important to do as much research as you can. It's just as important to accept the truth that sometimes the reality won't live up to your expectations.

Giving Liberally? Or Conservatively?

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Until recently, I was convinced that Ebenezer Scrooge was a conservative, at least before his transformation. His refusal to give to the poor at Christmas time personified our perception of a conservative as cold-hearted, stingy, and even miserly. I would also have given you high odds that his loyal clerk, Bob Cratchit, was a liberal.

Now I am not so sure.

In late November, John Stossel’s ABC special 20/20 report, “Cheap in America,” changed that probability 180 degrees. Indeed, the preponderance of the evidence suggests the stingy-hearted Scrooge was most likely a liberal and Cratchit a conservative.

Let me explain. Stossel’s report centered on Arthur C. Brooks' new book, Who Really Cares. The book examines our societal myths around giving and then reveals the facts. The focus of the report was on what and how much Americans give. It caused me to pause and consider a few of my own unconscious beliefs around giving.

One of those was a belief that “liberals” give more than “conservatives.” I’ve always assumed that those who are philosophically identified as champions for the poor and downtrodden would give more to those in need than would conservatives. Conservatives, after all, philosophically embrace individual responsibility and capitalism, both attitudes having less "heart" than a more liberal philosophy, right?

Not true. According to Brooks, of the top 25 states where people give the greatest amount of money in relation to their income, 24 are "red" states. In fact, conservatives give 30% more than liberals and actually make less. This turns my stereotyped money scripts on their noses. There must be some mistake. Why are the people identified more with championing the issues of the poor apparently champions in word only and not in their actions? That almost sounds hypocritical.

Stossel suggests that at the core of progressive philosophy is a belief in large government, as well as a belief that it is the government’s responsibility to aid and support the poor through the redistribution of wealth. People who believe it is the government’s job to make incomes more equal are naturally less disposed to giving.

Another predictor of a person’s generosity is whether the person is religious. Religious individuals give four times more to charity than the non-religious, and interestingly enough, not just to their churches. They give more to other charities, to the homeless, and even more blood to local blood banks.

I found it interesting, however, that Stossel suggests the best thing for billionaires to do is not to give away their money at all. He contends that the wealthy, through investing their money, create more jobs than government or charities. According to him, “Creating jobs is a better way of helping people than giving money away.”

Maybe tight-fisted rich liberals who don’t give to charities aren’t as selfish and "Scroogish" as Brooks' findings would seem to indicate. By keeping their money working to create more money, via creating jobs, they may actually be doing more for the poor. To me, this sounds like what I've always thought of as classic conservative thinking and behavior. Now we know it is just the opposite, since conservatives are givers and liberals are hoarders and even the real “job creators.”

Could it be that the conservatives who give are really the liberals, and the liberals who keep their money are really the conservatives? I suspect that once this information is disseminated, there are going to be a lot of very unhappy liberals who find out they are really conservatives.

That shock may be greater than the shock Ebenezer Scrooge felt when he saw his ghostly visitors. But who knows? The experience may be equally life-changing.

The "Best" Gifts

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One of the concerns parents of young children have around Christmas is teaching the kids to value giving as well as receiving. Many of us have difficulty with our own contradictory impulses. We don't want to turn our kids into greedy little monsters, but at the same time we want to give them the best gifts and experiences we can.

This week I had a chance to think about this dilemma in a new way. I was talking with my daughter about our cancelled November family vacation. Due to last-minute chicken pox, we weren't able to go on our planned Athens/Istanbul/Egypt/Rome/Barcelona cruise. Instead, we're taking a shorter and, to me, less interesting cruise. As you read this, I may be on a beach somewhere in the Caribbean.

My daughter almost certainly will be on the beach. As we talked about the changed vacation plans, tears welled up in her eyes and she said, "Dad, the Caribbean cruise is my dream vacation."

"So you're really glad that Davin got the chicken pox and our European cruise was cancelled?" I asked.

"Yes. Dad, I've wanted to go to a beach for years now. I mean, you can only look at so many columns and crumbling rock."

Twenty years ago, I am positive my reaction would have been, "Oh, no! Am I raising a spoiled little brat?" At the ripe old age of ten, London has been to Europe at least four times. At that same age, I was pretty much resigned to the fact I would probably never have enough money to travel abroad.

Instead of responding in that manner, however, I was intrigued by her thoughts. Actually, quite pleased. While I do my best to find great values in cruises, it still costs about 50% more to take the kids to Europe than to the Caribbean. Before London had finished her sentence, I had calculated that Marcia and I could hire a babysitter for two weeks of "Parents Only Time," plus take the kids on a separate Caribbean cruise, for the same money it would cost to take them on the European cruise. It would be a win-win for all of us—a beach and kids club vacation for the kids, plus time for Marcia and me to pursue our passion of seeing the world.

This conversation reminded me that choosing "the best" for our kids doesn't necessarily mean getting the gift or experience that is the most expensive or that seems the most attractive to us as adults. A good example of this might be the traditional family dream vacation to Disney World. For toddlers, who need naptime and who are too little for most of the exhibits, a place like Disney World is too big and overwhelming. They'd be happier with a couple hours at a local attraction like Rapid City's Storybook Island.

So if you weren't able this Christmas to get your kids "the best" gifts, don't feel you've failed them. They may well be just as happy with something less lavish. Remember, too, that today's must-have toy often ends up as tomorrow's disregarded clutter.

A case in point. My son, with enough toys in his room to fill a flea market booth, has spent hours this week playing in the dirt of a planted pot. He assembled the volcanic rocks into a manger for the baby Jesus from our nativity set. Today the only other actors are a few sheep. Mary and Joseph were there yesterday, but I guess today they are out shopping. Maybe they are looking for the perfect gift for their special child.

Conscious Giving

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It seems almost obligatory this time of year to write a column about giving. Pressure to give, give, give is everywhere. Ads urge us to buy everything from sweaters to screwdrivers to SUVs on the grounds that they will be perfect gifts to delight our loved ones. Charities send out solicitation letters. "Angel tree" displays in malls and bell-ringers in front of stores hope we'll share some of our shopping dollars with those less fortunate. All of it can be overwhelming.

We all have our own unconscious beliefs, or money scripts, when it comes to giving. In addition, we're surrounded by beliefs our society and religions have about giving. Both the personal and the societal beliefs can range across a broad spectrum:

"It's better to give than to receive."

"At this time of year, good people help the needy."

"You have so much that you have an obligation to share."

"Giving takes away people's initiative to take care of themselves."

"If poor people weren't so lazy, they'd provide for their own kids at Christmas."

"There are plenty of agencies to take care of those who need help."

Like all money scripts, all of these contain partial truths. Giving, whether to family members or to charity, is not a simple black and white issue. Some of the questions it raises might include: How do you know whether you are helping people or enabling them to avoid helping themselves? How do you give to children without encouraging them to be greedy or feel entitled to the latest and greatest of everything? How do you balance helping others and taking care of yourself?

One often overlooked factor is whether the giving is done more to help the recipient or to help the donor feel better. For example, I remember being in a church group one evening when people were discussing giving. Two of the women there, years earlier when they were struggling single moms with young children, had experienced people from a charity coming to their doors with gift boxes of presents and food for Christmas dinner. Both of them had been humiliated and mortified rather than pleased and grateful. The well-intentioned gifts had felt like a judgment that they weren't capable of taking care of their own families. No one had asked first whether they wanted or needed any help.

Giving can sometimes be an attempt to hold onto people, to make up to them for one's past failings, or to be loved by them. One common example of this is divorced parents who overspend on gifts for their children. Public giving may be a way to look good or to gain acceptance or recognition in the community.

One way to respond to the complicated issue of giving is to avoid it. You can close your wallet completely, out of fear that you'll be taken advantage of, fear that you'll offend, or simple frustration. Another response is to try to give to every charity that asks and to spend yourself into debt buying lavish gifts for everyone you care about.

Neither of these makes a lot of sense. Like many other of life's decisions, the question of how to give, how much to give, and to whom is a personal, individual matter. There isn't a formula for doing it right.

The only suggestion I have is that you give as consciously as possible. Consider the beliefs behind your giving. Discuss giving and receiving with your spouse and your kids. Stop and think before you decide to give or not to give. Then you're more likely to give wisely and with thoughtful compassion.

Ebenezer Scrooge and Your Christmas Spending

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This time of year, I see Ebenezer Scrooge everywhere. My office is decorated with figurines of Scrooge and Tiny Tim, various editions of A Christmas Carol, and other representations of the classic story by Charles Dickens.

This isn't necessarily because I want to take Ebenezer Scrooge as a role model. Oh, I suppose that, up to a point, being associated with English literature's most famous miser is not a bad thing for a financial planner. Only up to a point, however. I'm pleased to have clients think of me as "thrifty." I'd prefer they didn't regard me as "stingy" or "miserly."

It's an important distinction. "Thrift" is prudent, careful management of money and other resources. "Stingy" is a lack of generosity, with a connotation of meanness and selfishness. "Miserly" takes hoarding to a dysfunctional extreme. It implies a lack of conscious choice.

That lack of choice is exactly what makes Ebenezer Scrooge such a useful figure in my work with clients. In recent years, I have begun to use his story as a metaphor for helping people change the way they think about money. I've even used it in a book, The Financial Wisdom of Ebenezer Scrooge, co-authored with Dr. Ted Klontz and Dr. Brad Klontz.

During his unhappy, lonely childhood, Ebenezer Scrooge developed a set of unconscious beliefs, or "money scripts," that he carried into his adult life. Among those were beliefs that having more money was the way to happiness, that spending money on himself or others was wrong, that people could not be trusted, and that money was more important than people.

The quality that most people associate with Scrooge is his life as an unhappy miser and his attitude of "Bah, humbug!". Yet what's most important about A Christmas Carol is his transformation to a joyful, generous man. The visits of the Spirits of Christmas Past, Present, and Future helped Scrooge understand that his beliefs about money were false. With the guidance of the Spirits, he was transformed into ". . . as good a friend, as good a master, and as good a man as the good old city knew . . .".

If Ebenezer Scrooge could change his deep-seated, painful need to hoard every penny, there is certainly hope for the rest of us to change our destructive financial patterns. We may not have magical ghosts to help us transform overnight, but we certainly have the same ability as did Scrooge to become joyful and generous of spirit.

The Christmas season has become far more complicated than it was in Scrooge's time. The pressures of shopping, decorating, entertaining, and traveling can trigger all kinds of less-than-ideal financial behavior. You might find it helpful to re-read A Christmas Carol, not simply for the story, but for some possible insight into your own money scripts. The stress of the holidays can help you begin to identify some of your habitual money behavior that you might want to change.

If you'd prefer to listen to Scrooge's story, as portrayed in The Financial Wisdom of Ebenezer Scrooge, you're welcome to join me by telephone or online for a special recitation. (You can register at www.rickkahler.com.) It will be at 4:00 p.m. MDT on Thursday, December 14, and will subsequently be available on my website as a podcast. I'm looking forward to sharing one of my favorite Christmas stories.

In writing A Christmas Carol, Charles Dickens probably intended simply to create a sentimental story celebrating the spirit of Christmas. His talented pen, however, produced a classic piece of literature. In addition, his psychological insight created a parable that today is as useful as it is enjoyable.

Tips for More Conscious Holiday Shopping

Once again, 'tis the season. To be jolly? No, to be shopping. One recent news report included the extraordinary statement that "holiday shopping is no longer discretionary spending." No wonder the month of December can be a source of stress rather than joy for so many of us.

Here are a few suggestions that might help you do your holiday shopping more consciously.

1. Examine your own beliefs about Christmas spending. One way to begin this is to quickly write down answers to the following questions: What do I believe about money and each of the following? Christmas? Presents? Giving? Spending? Receiving? You may uncover some "money scripts" that aren't necessarily true but that govern your spending. Examples might be "The more money I spend, the more I am showing love" or "I have to buy gifts for everyone in my extended family." This exercise can help you consider whether you might benefit from changing some of your holiday shopping patterns.

2. Take a deliberate look at your expenses and your available income, and then set a spending limit. For couples, it's a good idea to do this together.

3. If, after examining your budget, you need to cut back on Christmas spending, communicate that to your family members as early as possible.

4. Consider creative ways to limit holiday spending. These might include drawing names instead of getting gifts for everyone, giving homemade gifts, or giving gift certificates for services such as babysitting, snow removal, lawn care, cooking, or housecleaning.

5. Once you've decided on your spending limit, do your shopping with cash. Studies show you will probably spend 15% to 30% less than if you use a credit card, and you'll save yourself that miserable January "credit card hangover."

6. If you must use credit, do so consciously. Use only one card, check the balance often, and keep a running total of your purchases to help you stay within your spending limit.

7. Make a list before you go to the store to reduce impulse buying. If you need gift ideas, browse ads, sale flyers, catalogs, and the Internet before you go shopping.

8. Don't wait till the last minute. For some people, shopping early means buying gifts in August; for others it means getting to the stores before December 15. However you define it, shop earlier rather than later. Waiting until a few days for Christmas means you have fewer choices, less time, and more stress.

9. Use a system that fits your style, but get organized. Some people plan ahead far enough to pick up gifts throughout the year. Others get everything done in one well-planned shopping trip.

10. As much as possible, avoid "black Friday" and other busy shopping times. Fighting your way through crowds of other shoppers is stressful, and it's too easy to get caught up in a "gotta have it" frenzy.

11. Look for sales and comparison shop. Do as much of this as possible through phone calls and reading ads instead of running from store to store. A couple of places to consider checking online include www.wow-coupons.com and www.gottadeal.com.

12. Consider planning now for next year. As you do your shopping, keep track of what doesn't work well. Then think of ways you can do something different next year. Many people buy next year's ornaments, gift wrap, and cards the week after Christmas when they are bargain priced.

Doing your holiday shopping more consciously can make this time of year truly a season to be jolly instead of stressed. I hope these suggestions help you enjoy giving, receiving, and spending time with those you care about.

Interior Finance and Your Net Worth

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As most readers of this column know, I have a written a lot about the importance of the emotional side of money and how our beliefs about it affect, not only our investment decisions, but every money decision we make.

I am still occasionally surprised that this idea, which has become commonplace to me and I hope to you as well, is still "cutting edge" information to most professionals in the financial world. One of those who recently became aware of it was Jonathan Clements, columnist for The Wall Street Journal.

In his September 13 column, "Touchy-Feely Finances: How To Find Out What You Really Want From Your Money," Clements expressed amazement that the interior side of money was more than "yet another dubious attempt by advisers to justify their hefty fees." He was surprised at how effective two integrated financial planning exercises were in helping people rethink their finances.

Clements affirmed what I have already seen, that the trend among better financial advisers is to add interior financial services to their traditional financial planning practices. Most of the profession calls these services "life planning," "financial life planning," "values based financial planning," "financial coaching," and "wealth coaching." I use the term "integrated financial planning."

I am glad that Clements is now joining another Wall Street Journal columnist, Jeffrey Zaslow, in understanding the importance of what we think, feel, and believe about money. It is just as vital as is exterior financial knowledge such as asset allocation, good estate planning, and asset protection.

I am excited that the mainstream financial press is beginning to awaken to what my colleagues and I have been learning for over ten years. While much of this was theory ten years ago, today I can look back and count hundreds of lives that have been changed when people uncovered and began to understand their unconscious beliefs about money.

Just recently, a participant in one of the weeklong "financial therapy" workshops I co-facilitate with Ted Klontz, Ph.D., called to tell me how that workshop had changed his life. Until he came to our workshop, he was in a helping profession because his underlying beliefs were "the only thing that really counts in life is helping people" and "if you do anything for money, it is evil." These beliefs caused him a lot of pain, since he had a natural affinity for real estate and finance. He had to suppress those abilities because they were "evil."

What he learned about his unconscious beliefs set him free. Today, he has expanded his career to help people overcome their financial demons. While he is still helping people, he is also accumulating a real estate portfolio for himself. He told me that his assets just surpassed $1 million and that he owed it all to what he learned about his interior beliefs about money. "Until I came to your workshop, I would sabotage every real estate deal that came my way. It was all because of my unconscious belief that making money, having money, and understanding money was evil. And of course, I didn't want to be an evil person so I was continually sabotaging myself."

The interesting thing about his feedback was, while I had seen scores of people vastly improve the quality of their life, it really hadn't occurred to me that many of these people also improved their financial net worth.

So, call it what you will—touchy-feely finances, the emotional side of money, or integrated financial planning—it works. It not only works to increase your quality of life, but it can do wonderful things to your net worth, too.

Surgical Investing

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I learned a few months ago that I needed shoulder surgery to repair a torn rotator cuff. My best guess is that I injured my shoulder over two years ago doing "power yoga." So much for the idea that yoga is a gentle, passive activity.

In preparation for the surgery, I spent a lot of time researching on the Internet, talking with people who had undergone the procedure, and asking questions of several physicians and a physical therapist.

Amid all this research, there was one question I never asked. How much would it cost?

I wasn't totally ignorant about the possible cost. I knew I had insurance, I knew the deductible was $2,500, and I knew I would pay 20% of the cost over that amount. Yet cost didn't even factor into my decision to have the operation.

I find this interesting, especially for a financially conscious guy like myself whose work is helping people assess the financial costs of decisions. It's also interesting that not once did my surgeon offer to tell me the cost of the operation, ask me how I was going to pay for it, or indicate that he even considered the cost of the procedure and its effect on my pocketbook. By the way, my surgery, MRI, and physical therapy ended up costing around $15,000.

My mindset was that I needed the operation, regardless of the cost. I had been told that the tear would only get worse, it would never heal on its own, and my pain would continue to increase. Eventually, the physical and emotional cost of putting off the operation would exceed the cost of having it done now. My response was to hire the best surgeon in the region and get the operation done. Even with only a vague idea of what it would cost, I assumed the results would be worth that cost.

So far, I have no reason to question my assumption. With the help of time and physical therapy, my shoulder is healing well. I'm even back doing yoga—minus the "power" part for now.

It recently occurred to me that part of my work with clients is similar to the whole process of my surgery. One of several specialties of my practice is doing intensive work to help high-income overspenders change their destructive financial patterns. When such potential clients call me, they usually have two questions. Can I help them? And how much will it cost?

My answer to the first question is a comfortable "yes." I can't guarantee success, of course, any more than the surgeon could guarantee success with my shoulder. Yet, like him, I can assure them the process I use is clinically proven to work and has a high success rate.

It's the second question I have trouble with. I'm still uncomfortable asking clients to spend more money to help them stop overspending. Yet the process to help these clients involves three professionals working with them for one to four days. The cost, ranging from $10,000 to $30,000, is similar to the cost of a surgical procedure.

The benefits to the clients are also similar to the benefits of such surgery. Given the incredible transformations that I've seen in our work, I know logically that this process is worth every penny it costs. For example, if I can help someone reduce their spending by $20,000 a year, for a one-time cost of $10,000, the return on that investment is pretty darn good.

The value of such changes can't be measured only in terms of dollars and cents. To remind myself of that, all I need to do is raise my arm. A pain-free shoulder? Priceless.