Today, I spoke to Farnoosh Torabi, who is a personal finance journalist, author and TV personality. The New York Times calls her advice “perfectly practical.” She is the author of the new book, Psych Yourself Rich: Get The Mindset & Discipline You Need to Build Your Financial Life. In this interview, Farnoosh talks about the fear factor when it comes to our careers, how to get in the mindset to be rich, and more.
Fear is the main factor why people don’t have successful careers. How can people conquer fear?
Fear can do two things. It can paralyze us or it can motivate us. So here’s a brain exercise. Imagine – exactly – what it is that’s so frightening. Is it fear of failure and having to start over with little money? Fear of not making enough money ever? Fear of rejection? Go to the edge. Visualize it to the point where you scare yourself straight. Now, here is the challenge: re-purpose that fear, that same adrenaline, to push you towards making the decisions that will keep you away from the scary place. Imagine hitting rock bottom. Swim in that fear and I trust you’ll never want to go near it again.
What does it mean to “psych yourself rich”? How did you come up with this book title?
The “psych” in “psych yourself rich” refers to the mind and how we need to have a clear understanding of our goals, values and emotions before being able to make clear, rational decisions. I interviewed psychologists, behavioral experts and economists and they all share this belief that our emotions can either make or break our ability to make healthy decisions, particularly financial decisions. Many of us harbor negative emotions related to money – fear, insecurity, anxiety – and this can lead to mental barriers or “cognitive biases” that prevent us from making the best financial choices.
The book stems from my experiences working with numerous young adults and families who feel utterly defeated by money. And beyond their credit card debt and stack of bills there is an undeniable layer of emotional baggage that’s preventing them from taking control of their finances. We spend so much time talking about their fears, worries and insecurities before ever talking about budgets or interest rates. The technicalities of managing your money meant nothing unless we could address and manage all that was going on emotionally.
Can you get rich without having goals in mind? What happens when you don’t set the right goals?
Without goals your money is meaningless, plain and simple. And you will likely spend without direction. Money is intangible and abstract until we give it a purpose and that purpose needs to be our goals.
How do you go from agonizing to acting on your dream?
First you need to define and visualize your dream as specifically as possible. It’s not enough to just “want to buy a house,” for example. You need to think about the location, the kind of house, the emotional value of owning the home. Then, once you’ve immersed yourself in that goal, being making small but significant steps towards that dream. Create a timeline of action. Start a checklist. Organization is critical. Finally, have a support system – role models, family and friends – who understand your goals and will motivate and help keep you on the right path. You don’t want to surround yourself with people who may pressure you to abandon your goals or sacrifice your savings to partake in their lifestyle.
Is it easy to identify your passion? Do you have any exercises on how to do so?
Imagine if you had a day off from work – what would you really want to do instead to make money? If someone came up to you and said, “Here’s $10,000. Create a business that you can start tomorrow.” What would it be? Instinctively you’d turn to your natural skill set, right? While you’re at it, don’t forget to take a stroll down memory lane, as well. Sometimes you need to rediscover yourself so that you can best identify your passions. And often our passions are rooted in childhood and adolescence, when the world was a simpler place. Life gets so hectic that we forget what we really enjoy, what our hobbies once were and our actual talents. Recall what you enjoyed doing in, say, high school. Were you in the school play? Did you play saxophone? Did you volunteer? Get an A in physics? What were your aspirations then? I bet they’re still some of the things you yearn for today.
Farnoosh Torabi is a personal finance journalist, author and TV personality. The New York Times calls her advice “perfectly practical.” She is the author of the new book, Psych Yourself Rich: Get The Mindset & Discipline You Need to Build Your Financial Life. In 2008 she published You’re So Money – Live Rich Even When You’re Not. Previously Farnoosh appeared in REAL SIMPLE. REAL LIFE., a makeover series on TLC, where she helped busy women better understand and manage their financial challenges. She is a personal finance contributor for Learnvest.com, Credit.com and Moneywatch.com. Her work and advice has been featured in national magazines and newspapers, including Real Simple, Glamour, Marie Claire, Cosmopolitan, Money Magazine, and People. Farnoosh has appeared nationally on NBC’s Today Show, CNN, MSNBC, Larry King Live, The View, Tyra, Good Morning America, The Early Show and Fox News. Most recently Farnoosh was a senior financial correspondent and host of Wall Street Confidential with Jim Cramer for TheStreet.com TV.