The Stories We Tell Ourselves About Money
Tom checks his portfolio positions most days. Reads every piece of market news about his companies. Agonizes over bringing in new positions or taking out old ones. He even gets a little anxious about rebalancing. When he's doing all of this, he doesn't consciously remember his immigrant parents' experiences, but those memories sit just under the surface. His parents sacrificed everything to raise him and now, losing any of their money feels like betraying them. The constant vigilance exhausts him but he can't stop.
Quick quiz: Why do you hold the allocations and investments you hold right now?
If your answer involves "just makes sense" or "feels right" or "what you're comfortable with" – you might ask yourself a deeper question: "Am I really an investor or am I acting out a script written when I was very young?"
Tom's not unique in living out a money story from his childhood. Neither are any of us. Everyone runs programs installed decades ago. Question remains: do you know what yours looks like?
The scripts get written early. Grade school early. Maybe you watched your parents fight about bills and heard "We can't afford that" for anything you wanted. Maybe you experienced abundance and learned that money flows easily. Your brain resembled wet cement back then so impressions stuck and hardened. Over time, impressions became beliefs, then beliefs became patterns. Patterns eventually became "That's just how things work."
Take a scarcity investor as an example. She earns well into six figures and has a portfolio that needs to grow significantly to reach a secure retirement – but she holds only 20% in a total stock market mutual fund. Meanwhile, 80% sits in CDs, Treasuries, and money market funds earning 2-4% while inflation runs 2-5%. She thinks "I just can't take more risk" but truly, that translates as: "Risk means losing. Losing means poverty. I will not lose any money." That portfolio doesn't reflect her current circumstances. It reflects a childhood trauma about financial loss.
Another example – the gambler. His script originated with his favorite and flamboyant uncle who showed him how fortune favors the bold. Playing it safe means dying penniless, as his father had. He now only "invests" in whatever moves a lot – currently that's crypto and micro-caps. He's seen some breathtaking wins. Up 300% one year. He's also been down 70% in three months. Either way, he usually has good stories for Sunday's golf game. His high-risk "investing" doesn't actually build wealth but it does prove he's not going to wind up like his cautious father.
Stories carry costs. In the case of the gambler – a possible wipe-out at the onset of his retirement. In the case of the scarcity investor, possibly needing to work 5-10 additional years.
Here's the thing: you don't need to erase your money stories. They tend to carry some genuine value and at their core, they hold a positive intent for you. The investor who survived 2008 and stays cautious now? That caution might save them when everyone else has been leveraging.
Problems don't come from having money stories; they come from allowing the stories to run untethered. Stories can engage non-consciously, automatically. When important or even trivial money decisions arise, it's almost like an autopilot system that switches on unnoticed and takes over flying the plane. The switch happens so fast and subtly, the conscious mind doesn't notice.
Bringing stories into awareness creates space – space to ask questions and make a choice: "This story wants me to do X. Does that align with who I truly am and where I'm actually trying to go?" This puts the pilot back in control, possibly making the same choice as the story would have but possibly steering yourself out of trouble.
Source: Author prompt on ChatGPT
Awareness helps. But sometimes, even when you see the story clearly, it still wants to take the wheel. That's where a systematic approach can step in – not to fight your stories, but to make decisions without an argument.
Here's what this looked like for me last month. I held a gold investment position that had run up nicely through the fall. By late January, I wanted out – I fully expected gold to take a significant hit in the coming weeks. The SmartSignal system, however, said hold. I wanted to get out to feel less anxious, but I knew I had a choice: let my discomfort drive the decision or act as the systematic investor identity I had chosen. I held the position even though I felt deeply uncomfortable. I still feel uncomfortable because I firmly believe gold has further to fall, but I follow the system.
Why? The systematic approach forms who I am as an investor, so I follow my systems. The point here: I made a choice consciously, from current identity rather than from a feeling that originated in some old story. "I don't want to lose money so I’ll get out" meets "I am a systematic investor. The system says hold. I hold" The system has a record of performing better than my money story. The system doesn't care about my personal stories. That might sound a little cold or indifferent but upon closer inspection, that's freedom.
There's nothing wrong with having money stories. Everyone does. Your stories may make total sense given where you came from, what you experienced, and what you learned. Something can go very wrong, however, when you let them make decisions based on feelings while the rational part of you goes quiet.
This matters now more than anytime in the last 15 years. Why? If we're close to entering a period of sustained volatility, then sideways volatile market conditions may stress test your portfolio – whether stories, habits, or processes built that portfolio. For investors who have been operating based on their stories, the coming strain may push poor decisions at exactly the wrong moments.
The stories you carry make sense given where you came from. They protected you once. The question now: do they still serve the investor you're trying to become?
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Three questions worth exploring:
Think of a recent investing decision where you felt tension - where part of you wanted to do one thing, but you did something else. What was each part trying to protect you from?
Notice your first reaction when markets drop 10% or you see a big gain. What does that reaction tell you about what you believe must be avoided or proven
Imagine an investor who has your knowledge but none of your financial anxiety or old stories. You're watching them manage your exact portfolio. What's different about how they make decisions? What's one thing they'd do this month that you wouldn't?
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