In last week’s Indianapolis Business Journal, I found a very interesting article by neurologist, educator, and former financial planner Shirley Mueller. As a bankruptcy attorney in Indiana who deals day in, day out with people’s money and their emotions, I found this material fascinating. Mueller starts off by explaining that, contrary to the popular belief that emotions interfere with good investing, the opposite is true.
A scientific researcher named Antonio Damasio ran a study comparing normal subjects with patients who had suffered damage to the specific area of their brains that governs emotions. A test was given in the form of a game to measure how the patients handled decisions involving risk-taking. Here’s what happened: The normal patients responded to emotional feedback from their brans after they had made losing choices. These patients then changed their behavior. Since the brain-damaged patients were unable to receive that kind of feedback, they continued on a losing track. Shirley Mueller summarized by saying that, without emotions, we can’t and won’t make decisions that are best for our economic future.
Everyone, and I mean everyone, who comes to see me in my bankruptcy law office seems to have plenty of emotion going on. Debtors tend to have negative feelings about themselves. Some of these negative feelings are caused by the real financial problems people are facing, but very often the bulk of the negativity comes from myths about people filing bankruptcy being deadbeats. In reality, many people who have been responsibly handling their money for years are hit by an extended illness or a layoff that destroyed all their carefully-laid plans. Now they’ve got creditors making their lives miserable, and they themselves are letting negative self-talk and blame make their own lives even worse.
The reason this “Viewpoint” article by Shirley Mueller is so relevant to my work as a consumer debt specialist and bankruptcy lawyer is that it tells me people should deal directly with their own feelings, rather than repressing them. In fact, as we learn from the Damasio experiment, emotions can actually help debtors make the necessary decisions and take the necessary steps to move on with the rest of their lives. Financial pressures can cause lots of negative emotions – fear, self-blame, even despair. But hope – now that’s the emotion I try to instill in my bankruptcy clients. Hope (I don’t mean wishful thinking, but true hope) – that’s the one emotion that comes only from taking action to change things. And that’s my life and my livelihood in a nutshell – helping people take informed action!