Resources

Just too good to keep to ourselves

Welcome to our library. We strive to provide resources so that our clients know as much as they wish when it comes to being financially savvy. And it doesn’t stop there! We are part of a larger community – including you, wherever you may be. This is where we share content and tools that are important, fun and even inspiring, with everyone. Our resource vault will help you get smart about money, find your own motivation to move forward, and laugh and breathe a bit easier along the way.

Rewriting the Rules: Emotions Should Play a Role in Money Matters

Published in: Resources |

Most financial advisors say that you should keep emotions and investing separate:

“Emotions cloud your judgment.”

“Emotions have no place among the pie charts and annualized returns reflected in your financial plan.”

“It’s best to compartmentalize your feelings and save them for your therapy appointments.”

But we’re here to say that this is a myth, and that emotions SHOULD play a role in money matters.

Where the Myth Comes From

This myth is partially derived from the conventional wisdom that thinking and feeling are two separate processes guided by different regions of the brain.

But modern neuroscience research has shown that those areas of our brains are actually highly interconnected by neurons that translate both cognitive and emotional messages.

For this reason, it’s nearly impossible to completely disentangle our thoughts and feelings. One pair of researchers highlighted a common experience that emphasizes this point: You may justify a car purchase by claiming you got a good deal, but the true determining factor may have been that you liked how the car made you feel.

Does That Mean We Endorse Making Panicked Decisions Every Time The Market Swings? Of Course Not.

Even when the market has our stomachs in knots, we provide much-needed objective reasoning to our clients. In fact, regardless of the market environment, nearly every big choice in our clients’ lives involves plenty of dialogue, analysis and projections to estimate how it would affect their future.

But both intuition and emotion play important roles in this process. A person’s history, their current situation, and their future ambitions influence every money decision they make; disregarding this is doing a disservice to their lived experience.

Rewrite the Rules with The Humphreys Group

Investments are so much more than just figures and statistics. They represent our security, independence, values and legacy. Some clients may view their investments as validation that they worked hard in life; others use them to support causes they believe in and give back to their communities. Some investors see their investments purely as assurance that their loved ones will remember them and live well after they’re gone.

While most advisors would prefer to focus on the analytics of the investments, it takes a special advisor to acknowledge the values behind the numbers.

We must talk more about our feelings in the context of money. We have seen that embracing our emotional side and having those pivotal conversations can lead to better financial outcomes. If you want read more about common money myths and how we can break them, download our free eBook, “Rewriting the Rules: Telling Truths About Women and Money.”

Financial Tips for Planning a Wedding

Published in: Resources |

At The Humphreys Group, we know that money and emotions go hand in hand. And this is especially true when it comes to weddings: you want it to be the perfect wedding for you and your partner, you want all your loved ones there on this special day, and you want everyone to be happy.

But costs can run away from you, and suddenly you find yourselves overwhelmed and over budget. According to WeddingWire, on average couples underestimate their wedding spend by nearly 45 percent. The all-in average wedding costs is $38,700, which includes the engagement ring ($5,000), ceremony/reception ($29,200), and honeymoon ($4,500).

WeddingWire’s study found that the top five reasons couples tend to overspend on weddings are:

  • Initial budget was set lower than reality
  • Fell in love with things “we needed to have” during planning
  • Added custom/personalized elements
  • Guest count changed
  • Opted for upgrades

With all the guests (the average is 126), wedding party members (average is 10), and vendors (on average, 14 vendors are hired for photography, venue, hair and makeup, the wedding dress, cake, flowers, and the DJ) involved… it can get expensive.

So, here, we’ve included a few financial strategies you can implement for your wedding that will make a world of a difference.

List Three Priorities Beforehand

Before you start the wedding planning process, sit down with your partner and write down three priorities or must-haves. For example:

We want to:

  • book an outdoor venue,
  • have a live band, and
  • provide a photobooth for our guests to enjoy.

You and your partner may opt to do this separately first, then come together and whittle down your priorities into a joint list. Writing down your priorities is key. Later on, when you’re inevitably tempted to splurge on décor, or a videographer, or a wedding dress that caught your eye, you can look back at your priorities and become more grounded about what really matters to you. At The Humphreys Group, we often talk to our clients about aligning their spending with their values, and this is a version of that exercise.

Have a Conversation about Wedding Planning Duties

It’s also important to have a real conversation with your partner about their role in wedding planning and decision-making.

  • Some brides prefer to take care of all the planning. If you’re a bride who owns the “planner role,” how does your partner feel about that? Do they want to play a role, too?
  • Conversely, does one partner want the other to handle all of the planning, but is the thought of that overwhelming?
  • Does one person want to take the lead, but delegate various tasks to their partner?
  • Or do you want to divide the responsibilities 50/50 as you go along?

You also need to agree on a decision-making process:

  • Will you make decisions together?
  • Or will the person who does the research make the ultimate decision? For example, if it’s one partner’s job to research photographers, will they unilaterally decide who to hire, or will they circle back to the other person and ask for their input after showing photography options?

Being on the same page about how you’ll handle key decisions — decisions that often involve your budgeting style and money matters — will make you feel less stressed and more confident that you’re planning the wedding you both want to have.

Utilize Free Resources

And finally, don’t forget to use your resources! There’s no shortage of wedding advice websites, but one of the best is A Practical Wedding. The site offers a wide variety of tools that help with the nuts-and-bolts aspects of wedding planning, including budgeting spreadsheets, timelines regarding when to do what and when, and more.

But most importantly, the website also interviews real women about their wedding experiences: what they thought they’d spend, what they actually spent, what they loved most about their wedding and what they’d do differently. Getting advice from real, married couples helps manage your expectations and also prompts you to really think about your priorities and what matters most to you.

Contact Humphreys Group Today for More Financial Tips

If you’d like to talk more about financially planning for weddings or other big moments in your life, reach out to us today.

Women, Men and Investing: We Debunk the Myths

Published in: Resources |

There’s a myth that has permeated the financial services industry for decades: that men are better investors than women. But it turns out that assumption is simply not the case.

According to a 2016 Fidelity study, female investors tend to outperform male investors by an annual average of 0.4%. This doesn’t seem like much, but it accumulates to a significant financial difference over time.

For example, let’s say a man and a woman each invest $100,000. Assuming a 4.6% average annual return for the man and a 5.0% average annual return for the woman, her investment will have grown to $432,200 after 30 years, while his will be valued at only $385,400. That’s nearly a $50,000 difference and is half of the original investment!

Why Are Women More Natural Long-Term Investors?

First, men tend to buy and sell their investments more often. The same Fidelity study found that men made an average of 55% more trades in 2016 than their female counterparts. This can be financially injurious because the more an investor trades, the more he risks making an investment right before it decreases in value or selling the investment right before it gains momentum. Because women are more likely to hold on to their investments throughout market fluctuations, they capture more growth over time.

Digging deeper, why do women hold on to their investments longer? There are a lot of reasons. As women, we usually conduct more research before investing and maintain a long-term perspective more often. We tend to view investing less as a game to be won and more as a means to accomplish our goals. Regardless of the psychology, women’s success in the investment world is good news.

Rewrite the Rules with The Humphreys Group

The media portrays investors as men in suits walking down Wall Street. But the data tells a different story. Let’s keep breaking the money stereotypes that have held women back for way too long. Read more about common money myths in our free eBook, “Rewriting the Rules: Telling Truths About Women and Money.”

Socially Responsible Investing: Aligning Your Money with Your Values

Published in: Resources |

Previously on the blog, we’ve talked about the importance of investing with intention.

We’ve also talked about how women tend to do more investment research and maintain longer-term perspectives on their financial plans than most men do.

Today, we’re going to take this a step further and talk about socially responsible investing (SRI), a topic that’s important to many of our clients.

What is Socially Responsible Investing?

US SIF: The Forum for Sustainable and Responsible Investment (US SIF Foundation) defines SRI as “an investment discipline that considers environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact.”

Examples of ESG criteria used by sustainable investors include green building/smart growth, climate change/carbon, water use and conservation, community development, human rights, board diversity, avoidance of tobacco or other harmful products, and anti-corruption policies. SRI investors can be anyone from individuals and family offices to universities, foundations, pension funds, nonprofit organizations and religious institutions.

Source: US SIF Foundation

“Socially responsible investing” is also referred to in a variety of terms, according to the US SIF Foundation. These terms include “sustainable, responsible and impact investing,” “community investing,” “ethical investing,” “green investing,” “impact investing,” “mission-related investing,” “responsible investing,” “ethical and green investing,” “sustainable investing” and “values-based investing.” No matter the terminology, they all aim to accomplish the same thing: to grow money while doing good.

A New Wave of Socially Responsible Investors: Millennials

Sustainable investing has been around since the 1970s, but a new wave of millennial investors have entered the scene who want to make sure their investments are making a positive impact on society. They want to align their money with their values. According to US Trust, 76 percent of high-net-worth millennial and Generation Z investors have reviewed their assets for ESG impact. And according to Morgan Stanley, millennial investors are twice as likely as others to invest in companies that incorporate ESG practices.

Socially responsible investing has continued to grow astronomically over the years. At the beginning of 2018, $12 trillion in assets were invested in sustainable, responsible and impact investing strategies across the United States, according to the US SIF Foundation.

Investing Responsibly Today

At The Humphreys Group, many of our clients are invested in ESG funds, such as the Pax Ellevate Global Women’s Leadership Fund (PXWEX). The Pax Ellevate Global Women’s Leadership Fund is “the first broadly diversified mutual fund that invests in the highest-rated companies in the world for advancing women through gender-diverse boards, senior leadership teams and other policies and practices,” as described on their website.

Socially responsible investing can be a great way to align your investment portfolios with your values. If you’re interested in learning more about SRI, reach out to us today.

Negotiating for What You’re Worth

Published in: Resources |

It’s often assumed that women don’t ask for raises, that they act less assertively in negotiations for fear of upsetting the relationship with their boss or colleagues. Books like Linda Babcock and Sara Laschever’s Women Don’t Ask and Sheryl Sandberg’s Lean In have tried to back this claim.

But new research from Harvard Business Review refutes this belief.

Women Are Asking for Raises — They Just Aren’t Getting them

Harvard Business Review found that women do ask for raises as often as men do — they just don’t get them:

“Women ask for a raise just as often as men, but men are more likely to be successful. Women who asked obtained a raise 15% of the time, while men obtained a pay increase 20% of the time. While that may sound like a modest difference, over a lifetime it really adds up.”

This is frustrating to hear. We already know that women earn less than men do (when comparing equally qualified people doing the same job, most estimates by labor economists put the gender pay-gap at 10% – 20%). Now, we hear that when we try to negotiate for a raise, we don’t get it. Our “shortcoming”? Being female.

“The bottom line is that the patterns we have found are consistent with the idea that women’s requests for advancement are treated differently from men’s requests. Asking does not mean getting — at least if you are a female,” Harvard Business Review writes.

Tips on How to Negotiate for that Raise

After hearing this research, you’re probably feeling discouraged. “What’s the point of asking for a raise if research shows I won’t get it?”

Yes, this news is gloomy, but knowledge is power, and now that we know what we’re up against, we can better prepare for asking for that raise. So, now we’d like to provide some research-backed strategies you can use to negotiate for that salary increase, also echoed in Ellevest’s recent article, “The Trick to Negotiating That Raise? Science.” Here are tips they recommend:

1. Get data (internal and external data)

Learn about the internal pay structure of your company. Ask your manager how pay ranges are determined or find out where your position falls relative to others in the company.

For external data, ask your friends and people in your network to find out what other companies tend to pay for the role. Ellevest recommends using resources like Salary.com and PayScale, while other reputable compensation reports can also be helpful. We also love the site, Ladies Get Paid.

2. Group your priorities

Negotiate bonus, benefits, equity, flexibility and, of course, salary as one group. That way, you’re not compromising on every individual ask, and it also won’t seem like you’re asking for too much.

3. Make it a win-win situation

What value — risk avoidance, brand value — do you bring to the company? Bring up these points.

4. Remember why you’re there

You’re there to get paid what you deserve. And research shows we negotiate more effectively when it’s for something bigger than ourselves. When negotiating, think about how a raise would help you, your family and loved ones, and causes you care about.

If you want a chance to talk to other like-minded women about these issues and other challenges that arise around money, please join us at one of our Conversation Circles.

The ‘Fifth Trimester’: Going Back to Work After Maternity Leave

Published in: Resources |

In late December, a new law was passed giving federal workers paid parental leave for the first time. (Unfortunately, not all federal workers are covered by the new law.)

This is a great step forward, and we’re so happy there’s being a national conversation around parental leave — it’s finally getting the attention it deserves. But we’d like to push the conversation further.

Companies and parents need to talk about a little known transitional period that author Lauren Smith Brody calls the “fifth trimester” — the time when new mothers, just months after delivery, are going back to work but often before they feel emotionally and physically ready to return.

Returning Back to Work

Brody, author of The Fifth Trimester: The Working Mom’s Guide to Style, Sanity, and Success After Baby, writes that the first three trimesters (and the fourth — those blurry newborn days) are for the baby, but the Fifth Trimester is when the working mom is born.

Brody calls that first day back at work the “second cutting of the cord.” From interviewing more than 700 mothers for her book, she found that the emotional through line was guilt. “Everybody talked about guilt, even if it meant a different thing to each person. Everyone talked about coming back to work, feeling different and knowing that people saw them differently, no matter what field they were in,” she says.

Seventy-five percent of the women Brody surveyed said they wished they had been able to take a longer maternity leave. When asked how much extra time they would want, the most common answer was “a few more months.” “Either way, there’s a monumental transition,” she says. “I like to point out that the fifth trimester might be longer for some women and shorter for others. You kind of don’t know how long that transition time is going to be until you’re on the other side of it.”

Gender Equality in the Workplace

There should be an understanding among workers that this Fifth Trimester exists, and motherhood should not be treated as a career barrier.

As Harvard Business Review writes, “The ability to take one’s full parental leave without diminishing one’s promotion, pay, or leadership prospects is crucial for greater gender equality in the workplace and for helping all working parents, and in particular mothers, achieve greater work-life balance.”

Join Us at a Conversation Circle

Brody says that more than anything, it’s important to be transparent about the challenges, but also about the triumphs. “That will also help everyone be less afraid of it, both of going through it and managing people who are going through it.”

If you want a chance to talk to other like-minded women about these issues and other challenges that arise around money, please join us at one of our Conversation Circles.

Want to Improve Your Financial Health in 2020? Do This One Thing

Published in: Resources |

Creating New Year’s resolutions is a great way to kick off the new year, but sometimes our goals can be so big, lofty, and vague that we don’t know where to begin, or feel too intimidated to even start. What does “improve financial health,” “eat better,” “travel more,” or “stop procrastinating” even look like? What does it entail?

If “improve financial health” is on your list, here’s one tip: The single most important thing you can do to improve your financial health is to track your income and expenses. Whether by paper-and-pen or Mint.com (or other apps), you need to take a clear-eyed, realistic look at your income and expenses. Are you underearning or overspending? Some of both?

Tracking and categorizing your expenses can be tedious and daunting, so we encourage you to approach it with the mindset that it’s just data — data that is necessary to evaluate whether you should make spending shifts and how to make them.

Remember, you can’t embark on a journey until you’ve located yourself on the map. You can’t make choices about how to change your spending until you have insight into the choices you’re making now.

But the payoff is huge: Clarifying your income and expenses will give you the information you need to evaluate trade-offs, make informed decisions, and feel confident. There’s no secret sauce, but it all adds up to better financial outcomes.

Make Small Course Corrections Now

Making small course corrections to spending and retirement contributions now will have far greater impact than large corrections you make later. Try resisting the temptation of immediate gratification by thinking of these changes as advocacy for yourself at ages 70, 80, or older.

If you have access to a 401(k) plan, you should absolutely contribute, at least enough to equal your employer’s matching contributions. But it’s never too soon to start supplementing your savings with a health savings account (HSA), a traditional IRA, or a Roth IRA. If you’re self-employed, consider supplementing with a SEP IRA. For women who are closer to retirement, consider obtaining long-term care insurance, especially if you have a family history that indicates you may experience health challenges later in life. Such policies can be costly, yes, but they can make a world of difference.

Work with a Financial Advisor in 2020

Work with a financial advisor to crunch the numbers to see if you are on track. Armed with your financial data and some well-considered assumptions, you can get a realistic idea of where you stand now and devise a plan to make the course corrections that work best for you. If you’re interested in discussing your financial picture with The Humphreys Group, reach out to us today.

How Women Can Build a Sound Investing Strategy in 2020

Published in: Resources |

When it comes to investing, women gain a performance edge thanks to their innate patience, low-trading frequency, and goal-driven strategies. Some writers have noted differences between women and men when it comes to money-related decisions and provide evidence that women investors exhibit marathon-like behaviors when it comes to investing: they make steady choices that will result in bigger long-term financial gains and stability, and react to setbacks with less stress and emotion that men.

Women Are Better Investors — Here’s Why

According to a 2016 Fidelity study, female investors tend to outperform male investors by an annual average of 0.4%. This doesn’t seem like much, but it accumulates to a significant financial difference. For example, let’s say a man and a woman each invest $100,000; assuming a 4.6% average annual return for the man and a 5.0% average annual return for the woman, her investment will have grown to $432,200 after 30 years, while his will be valued at only $385,400. That’s nearly a $50,000 difference and is half of the original investment!

What factors are at play here? First, men tend to buy and sell their investments more often. The same Fidelity study found that men made an average of 55% more trades in 2016 than their female counterparts. This can be financially injurious because the more an investor trades, the more he risks making an investment right before it decreases in value or selling the investment right before it gains momentum. Because women are more likely to hold on to their investments throughout market fluctuations, they capture more growth over time.

Why exactly do women hold on to their investments longer? There are a lot of reasons. As women, we usually conduct more research before investing and maintain a long-term perspective more often. We tend to view investing less as a game to be won and more as a means to accomplish goals and reach life’s milestones. And while women aren’t afraid of risk, their heightened risk awareness leads them to allocate their risk-budget prudently, which leads to better, long-term outcomes.

Finding the Right Balance in Investing

I believe it’s vital to have a disciplined investment philosophy and to follow basic best practices. For context and as an example, at The Humphreys Group, we begin by reviewing and discussing the wide world of investment objectives and strategies that are available with each of our clients — expanding their knowledge, ensuring they are informed, and ascertaining the best strategy or strategies that will work for them. Some areas we cover:

Investing 101: Remember you are buying assets for their potential to increase in value, provide income, or do both. This means you need to expect fluctuations in returns, volatility, and cycles of depreciation and appreciation; long-term goals such as retirement, buying a home, or paying for college are investments that often weather such cycles.

Stocks vs. Bonds: Stocks mean investors own shares of a company, and those shares will increase or decrease in value based on how well the company performs. Bonds are considered less risky than stocks; they are a form of a loan to a company and investors’ payoff comes in the form of company interest payments on those bonds.

Asset Allocation: Multiple factors contribute to how you should approach asset allocation. We recommend that, when making decisions about where and how much to invest, you should take into account your unique views on your risk tolerance and risk capacity levels, financial goals, financial timetables, required income, and tax considerations. It’s also important to consider the variety of external factors that have the potential to affect investments, such as: market volatility, short- and long-term risk, inflation, and purchasing power.

The balance really depends on your unique situation — What goals are you investing for? How much do you have in investable assets, outside of your standard financial picture? — tolerance for risk, and time horizon. If you are closer to retirement, for instance, it’s often best to re-allocate to more conservative investments to help protect your nest egg as you move away from a steady, 9-to-5 paycheck. If you are younger with many years standing between you and retirement, you can afford to be more aggressive with your investment strategy, as you have more years to reconcile any losses from market volatility. Enlisting the help of a qualified, credentialed financial advisor can help you feel confident that you’re making the right decisions.

Evaluating Your Financial Situation

Take time to calculate and evaluate your net worth. Understanding this figure is vital to understanding your total financial picture and determining next steps, especially when it comes to investing. The number illustrates your financial realities and can help inform your financial direction and decisions, today and well into the future. Once you understand your total financial picture and where you stand, you can take specific, actionable steps toward successfully saving, investing, and reducing debts. Routinely assessing your net worth can help you stay on a steady path toward your long-term goals.

Education is always a good place to start as well, and women already excel at doing their homework and the research needed to get smart about a topic. What’s most important is to take risk that’s appropriate for your situation. Also, consider that risk and reward go hand in hand.

Be risk-smart — think about your risk capacity (how much risk you are able to take on, given your resources, expertise, and plan) versus your risk tolerance (how emotionally comfortable you are with taking investment risk). Remember that diversification is your friend — you can reduce risk by diversifying across types of investments, investing consistently over time, and maintaining a long-term investment horizon.

Work with an advisor to develop a clear sense of the level of investment risk needed to accomplish your goals. If that level is too high for your risk tolerance, you may need to refine your goals or make other changes, such as allocating more to savings.

Family Legacies: Do They Influence Our Giving Habits?

Published in: Resources |

For many of us, our family legacies have influenced how we engage with the world — including our financial practices. As we grow older and begin to examine our spending, saving and giving patterns, some of us realize our families have taught us money-related behaviors we admire and strive to emulate, especially when it comes to giving. But let’s admit it: it’s not always easy to give. As women negotiating busy, 21st-century lives, how can we sustain and grow the inspiration to continue giving traditions, particularly to the causes and issues we care about?

One thing to keep in mind is that giving may contribute to our overall sense of life satisfaction and happiness, and serve as a model behavior that others around us want to emulate. Study results reported by Fidelity Charitable in 2018 revealed:

  • A higher number of respondents who said they grew up with “strong giving traditions” felt closer to immediate as well as extended family members, and also felt higher levels of happiness than those who reported their family giving traditions were not strong.
  • “Strong giving tradition” respondents were more likely to engage in conversations and negotiations about the value of giving and where to focus their giving efforts; the same group reported parents and grandparents were key influencers of their adult giving behaviors.

When it comes to giving, however, women often forge their own path. A body of research from the Women’s Philanthropy Institute (part of the Lilly Family School of Philanthropy at Indiana University-Purdue University Indianapolis) continues to reveal differences between the factors that influence the giving behaviors of women versus men. Among the key findings from WPI’s 2018 study? Parents’ giving behaviors, as well as the frequency of parental giving, appear to influence women’s adult giving behaviors more significantly than men’s behaviors.

There may be additional reasons for why giving behaviors and patterns can differ between genders: a 2007 New York Times article cites social research that adds to the discussion about contrasts between what motivates the giving behaviors of men and women.

How can women, who demonstrate distinct giving behaviors, apply what they know about the general benefits of giving to their individual financial behaviors? Additionally, how can women develop long-term giving behaviors and habits that remain within their financial capacities and align with their distinct values so that when they give, they are consciously “giving with gladness”?

We offer a few final recommendations on how to approach giving, and encourage you to share these ideas with your network of friends and family (the one you have or the family you’ve made):

  • Build a network for your financial giving by discussing and sharing stories about the issues or organizations that you’d like to give to, and highlight the benefit(s) your giving could support.
  • If you choose to donate part of “your treasure,” establish a financial gift-giving timeline — monthly, annually, or on another schedule — to ensure you remain within your financial capacities and do not place undue stress on your personal budget and other fiscal plans.
  • As we’ve discussed previously, consider what “time” or “talent” you could provide — volunteering, consulting services, sponsorship, fundraising, etc. — in addition to or instead of a financial gift.

We understand that establishing a habit of giving can be a complex endeavor, influenced by lessons we’ve learned from our families or associated with a variety of positive and not-so-positive experiences related to money. Contact our team to discuss how you can develop a thoughtful strategy to begin meeting your goal of “giving with gladness.”

Goal Setting with Intention in 2020

Published in: Resources |

In a recent blog post, we provided a warm-up to help you discover how you feel — consciously or not — about setting new year’s resolutions. Here’s the exercise again in case you missed it:

Try completing the sentences quickly; fill in the blanks with the first word or words that come to mind.

  1. I think goal setting is…
  2. In the past, my experience with goal setting has been…
  3. I think the greatest value of planning is…
  4. The most success I have experienced in setting and achieving a goal was when…
  5. I find it difficult to set goals when…
  6. What I want to avoid in the future is…
  7. The person who has been the best role model for me in defining and pursuing a meaningful life is…

What emotions and thoughts came up? How do you feel about goal setting for 2020?

Excited? Motivated? Wary? Jaded? Cynical?

Often, we view having strong emotions as being a negative quality: For instance, when we sleep in instead of going to the gym before work, when we reach out to an ex, when we procrastinate… But emotions don’t always have to be bad influences. Love, compassion, sympathy, and loyalty are real strengths; our protective instincts and resolve to stand up for ourselves and others are strengths, too.

So, to show how you can embrace both your emotional side and analytical, rational side when goal setting this year, we’d like to introduce you to a favorite analogy of ours: the elephant and the rider.

The Elephant and the Rider

The elephant and the rider is first described in “The Happiness Hypothesis” by Jonathan Haidt and summarized in “Switch” by Chip and Dan Heath.

Our emotional side is an elephant, and our rational side its rider. The rider is perched atop the elephant, holding the reins and seeming to be in control. But this control is precarious because the rider is so small relative to the elephant. Anytime the elephant disagrees with the rider as to which to direction to take, the rider will lose, completely overmatched.

But here’s the deal: we need (and are) both the rider and the elephant. The point is not to squelch one or the other. To change things in 2020, you need both — the rider for the planning and direction, and the elephant for the energy and passion. A reluctant elephant and wheel-spinning rider will guarantee that nothing changes. But when they move together, change comes easily.

The whole point of this metaphor is to illustrate the power of guiding the elephant in the right direction. If you can do that, there’s no stopping you. We focus on emotion because it is such a powerful tool to keep you moving in a positive direction.

What Would an Enriched 2020 Look Like for You?

This year, as you define your ambitions for 2020, we encourage you to utilize both your emotional side and rational side — both your elephant and your rider. Just like how emotions and expertise both have a place in money matters, they both have a place in your goal setting.

If you’d like to learn more about goal setting and planning out your 2020, we invite you to subscribe to our newsletter or to participate in an upcoming Conversation Circle.

Wishing you a safe, warm holiday season, and happy holidays from all of us at The Humphreys Group!