Not long ago, I was talking about retirement planning with a friend of mine who was trying to decide what exactly to do to prepare for retirement – he’s 25, but has gotten the memo that he needs to plan now. I ran through a few options, but almost immediately his eyes glazed over – he was bored out of his skull pretty quickly at the first mention of the word Roth.
So I was blunt. “Do you want me to just tell you what to do?” He nodded his head happily. After that, I just asked him a few really simple questions: Do you want to work forever at something or do you want a true retirement? How much do you bring home each paycheck? How much lower could that paycheck be before it would bother your way of life? Do you have any documentation about your retirement plan at work? He answered these and seemed much happier to be talking about things that weren’t complicated plans and confusing numbers.
With that input, I basically described a few scenarios to him. Did he want to work at least part time in retirement doing something he enjoyed? Did he want a full retirement, but not with much free money to spend? Did he want a full retirement with plenty of financial freedom? I ran some numbers and built a simple plan for him – a Roth IRA and a well-funded 401(k).
For him, this was relief. He didn’t want to think about the numbers or the specific plans, not at all. He was interested in retirement, but in a much more conceptual way – he preferred to imagine his own day-to-day life at that stage, which he could envision in detail. He just didn’t have any interest – and perhaps a bit of fear, too – when it came to the actual planning part.
I’m just the opposite. I like running the numbers. I like to imagine my retirement, too, but when I dream about it, it’s very nebulous – I can easily imagine scenarios, but they seem like fiction to me. Instead, the pleasure for me is in the planning.
The difference is in our minds. Most people are familiar with the idea of “left brain” or “right brain” thinking. People who think primarily with their left brains are more logical, focus more on patterns and order, tend to be practical, and like to form strategies – big dreams are frivolous. People who are right brain thinkers tend to do much better with reading people, tend to brainstorm well, and tend to lead with their imagination – plans are boring.
For most of us, the truth is somewhere in the middle, but most people will identify at least somewhat strongly with one side or another. What does that really mean, though?
People with left brain dominance are usually good at devising plans and at running the numbers, but aren’t so good at imagining the big goals. They can figure down to the penny which retirement plan is the best one for them, but they don’t necessarily envision what exactly retirement is.
People with right brain dominance tend to be just the opposite. They can imagine their retirement quite well, but the path to get there is blurry. For them, retirement planning and investment choices are boring.
Good financial writing finds a way to inspire both groups. Some personal finance writing focuses on big-picture issues: setting goals, figuring out your dreams, and considering alternative scenarios. Other writing focuses in on those nut-and-bolt issues, calculating things down to the last penny.
When you read The Simple Dollar – or any other personal finance site – you’ll find things that are boring to you and things that excite and intrigue you. Consider, for a moment, that the very things that bore you are the very things that other readers are thriving on. I find it fascinating to think that the things that bore me are the same things that excite other people.
What else can we take away from this?
It’s powerful to talk about personal finance with other people. Money is often a topic that’s uncomfortable to discuss with others and so we avoid it, but talking about personal finance with people who think differently than we do can often open up doors for all of us. Talk about your money issues with your friends, particularly if they often think differently than you do. A different perspective might be just what you need.
Financial planners do a great job of serving those with right brain dominance. Financial planning works best when you have a goal already in mind – the planning is what needs to be done to reach that goal, and that’s often the part that right brain folks have a hard time with.
Left brain dominant folks need inspiration above all else. They need to be presented with a grand vision and once they begin to believe in it, they’ll find the road to get there.
Left brain and right brain folks sometimes function better on different paths to the same goal. Analytical types will often be happiest with the most efficient path. Others may find that the best path for them isn’t necessarily an optimal path at all, but instead a path that fits best with other choices and aspects of their life. Debt repayment is a great example – Dave Ramsey’s debt snowball (where you start off repaying the debt with the lowest balance instead of the one with the highest interest rate) isn’t necessarily the most optimal, but it succeeds in ways that aren’t directly analytical, but more psychological and empathic in nature.
In short, we all think differently – and when we stop being hindered by those differences and instead use them for our benefit, we all succeed.