Thursday, February 26, 2009

What ifs: a crucial step in the financial healing process

A few days ago, I posted a list of ten things that Women of Wealth can do today to gain more control, and better assess the impact the current financial crisis may have on their social biography and underlying financial goals.
One of the biggest hurdles to the success of any economic recovery plan is the fear of "what ifs" - what if I or my spouse loses their income, what if the trust fund I rely on is now not able cover my needs, etc.
Losing wealth may be difficult to deal with for those who did not see the financial storm brewing a year ago, or who relied on others to manage their wealth but never kept a close eye on their statements.
Here are few suggestions from Dr Theodore Soutzos, a consultant psychiatrist in London, on how the process of "financial healing" can begin*:

"Treating the fear around the loss of money is a three-step process. First is cause, Dr Soutzos says: “You have lost money. Can you do something to keep it?” Next comes perception: “Often people will exaggerate the extent of the damage.”

Finally comes response: “When you’re actively doing something about it, you feel less stressed,” he says. “If people say ‘I will end up on the street’, I challenge them.” In some instances, losing wealth can offer an escape route. It can allow you to pursue another career, move home or shed a partner. Dr Wolman says: “Getting off the treadmill can bring enormous relief. You’re always losing something. There’s always someone out there with a bigger house and a bigger boat.”

After financial pain comes financial healing, though this cannot happen without the willingness to accept the situation (blame and denial are two forms of escapism).

A realistic breakdown of all assets left is the first priority after which it comes down to support structures. “Anxieties go down as soon as you process them,” says Dr Wolman. And this means talking about them.

Until next post, continue to believe, achieve, receive. SDG - JBHIV

*This first appeared in the February print edition of Wealth Bulletin as part of Wall Street Journal Europe.

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