Dr. James Gottfurcht is an internationally recognized psychologist, board certified coach, instructor and keynote speaker who is President of Psychology of Money Consultants, and conducts psychotherapy in private practice. He consults and coaches individuals, couples, families, professionals and entrepreneurs as well as the financial services industry. He teaches “the inner game of money” to help increase financial success and overcome irrational, self-defeating behavior. He is also an instructor for UCLA Extension and The College of Executive Coaching.
For more than thirty years he has been a pioneer in creating Psychology of Money programs, coaching and conducting psychotherapy. He has trained and taught thousands of people in the U.S., Canada and Europe. His questionnaire, The Psychology of Money Profile, has been used since 1982 to assess Psychological Money Skills associated with financial success and abundance. It gives scores on the 7 Core Psychological Money Skills. He uses it to discover the causes of irrational financial behavior and to help replace this behavior with rational, effective action.
We talked with James today about the Psychology of Money and what it is. Here is an excerpt of our discussion with Dr. James Gottfurcht:
Dr. Relly Nadler: Let me ask you a couple of different questions. I know recently you have been on a fair amount of shows and interviewed by media because of the economic times and stress that people are feeling. I think one of the things in your bio was at the age of 9 you thought about the idea of developing the psychology of money. Can you talk about that and then get into what the psychology of money is?
Dr. James Gottfurcht: That’s not a story that I tell that often and I like too. This is just a serendipitous experience:
I am about 9 years old, it’s the summer of ’57, the roots of my interest started from this real life experience and I had no idea that it would play out for the rest of my life. This is before best-selling books in psychology and self-help were mainstream, before psychologists took to the air waves and I think decades before the formal basic field of coaching had begun.
The Russians had just launched the first satellite, Sputnik, and at that time we were learning more about outer space than we knew about inner space. So here is the defining experience before my 10th birthday. I call this story “bowling for dollars.” It dates me a little bit because there was a very popular TV show called Bowling for Dollars. My friend was visiting and I had this little bowling game that I made up out of cardboard and the back of shirts and I made a gutter folded. We had a marble for the ball. We made a 50 cent bet which was a lot back in ’57 for nine-year-old’s. The winner got a buck. In the bowling game I was way ahead of him after several frames and he started to cry. I felt horrible – talk about empathy. It was his first time over and he was crying. So he felt hopeless and he asked if I truly believed he could win and he wanted to go home. So I told him, yes, I believe you could win. I reminded him of my favorite book in childhood; The Little Engine That Could. I encouraged him to say “I think I can, I think I can, I know I can” and he felt better so we continued the game. I even began rooting and cheering for him. He found his self-confidence with that kind of emotional support. In my focus for him, I kind of lost my groove. So in the end he made an amazing comeback and won in the 10th frame.
I was shocked because, you know I am nine, and I had no idea that the effect of this could be so great. I had the ego of a nine-year-old so by the end of the game when I was starting to lose, I really wanted to win in that 9th or 10th frame. Enough of supporting and empathizing with my friend, but I wasn’t able to. So I was spooked about the power of that experience and I wanted to learn how this was able to happen. So that was the impetus and over the next several years in Jr. High and early High School, I read everything I could about the subject of the conscious mind.
There were three books that had a big effect on me; Maxwell Matlz’ Psyco Cybernetics, Norman Vincent Peale’s The Power of Positive Thinking, and my favorite of the three – Napoleon Hill’s Think and Grow Rich. I learned about the self-fulfilling prophecy by the sixth grade in Jr. High and the positive imagery and momentum, although it was just crystallizing. These books were just great role models and guides. What I put together within a couple of years from reading those was that my friends ability to ask for support was a major turning point and my compassion helped him overcome his negative mindset or what I call “poverty thinking” and we will talk about definitions and those are big concepts of prosperity thinking in my model. Then once he became confident he believed in himself and he carried himself to victory with his own momentum.
I had the home turf advantage because he was visiting me, he had never played the game and I was familiar with it. But I saw reversal of momentum, Relly, because of the rooting and because of the empathy and the support. It’s hard to change momentum in life or in sports and this helped me understand; I wasn’t able to reverse the momentum after it got going.
Dr. Relly Nadler: In the Psychology of Money and your ideas of how money influences people, can you talk a little bit about our economy today and what you see going on?
Dr. James Gottfurcht: In a general way money can influence people from wonderful things to sabotage and hurting themselves and others. I will give you a general answer to the question but then I want to get more specific for individuals.
On the positive side of the ledger, money can influence people to become responsible, accountable and independent. It can teach them to delay gratification when they go to school or graduate school. It can increase their self-discipline. It can help them to work harder to obtain their goals. It can motivate them when they fill more fulfilled or have an abundance to give to others who are less fortunate. The nice thing money can do too is that it can help you delegate tasks that you dislike or are not good at so you can spend more time on what you love.
On the other side of the ledger, in a destructive way, money can influence people to marry or have relationships that they otherwise would not have, like Bernie Madoff with his pyramid scheme – the Ponzi Scheme for $64 billion dollars. Money can motivate people to lie, cheat, steal and in other more extreme cases; to kill. Regarding integrity, money can motivate people to sell themselves out, also to manipulate and use others selfishly.
What I want to say is, obviously, money is neutral. It’s not the cause of these types of behaviors, Relly, it’s just little pieces of paper, plastic, and more recently it’s electronic digits like the Federal Reserve is utilizing to help bail out and try to rescue the economy. The true culprit, the source of how money influences us, is what money represents in our minds.
Dr. Relly Nadler: What is The Psychology of Money?
Dr. James Gottfurtcht: The definition of Psychology of Money according to me, is the process of understanding how people perceive their financial experiences in their own unique ways and how the differences in perceptions lead to financial success or disappointment. Rational thinking and behavior, obviously, will lead to more financial success while irrational thinking and behavior leads to more disappointment. Another real short expression for me is the “inner game of money” – our attitudes, beliefs, expectations and feelings lead to the self-fulfilling prophecy for better or worse.
What are your money associations? Can finding out help you be more successful in life and business? Find out more and get tips and tools to tune up your performance by listening to the complete recording above, without commercials.
Thanks,
Relly
