All investors are not created equal. That’s why financial planners start their first client meetings with a discussion of money attitudes, goals and risk tolerance – the driver at the root of all investment decisions. Some planners do this by general conversation, others by detailed surveys they ask their clients to fill out.

The survey route can be a more valuable tool because it forces clients to face their money issues, perhaps for the first time. Despite the difficulty in facing up to such key issues, individuals get a better idea of where their money strengths and weaknesses really lie.  Often, the real difficulties lie in how money is spent.

The real value of answering a lot of questions about your risk tolerance is to tell you what you don’t know – how the sources of your money, the way you made it, your money viewpoints and current methods of handling it will inform every decision you make about it in the future.

The most important thing a questionnaire can reveal is your true money priorities and behaviors. Trained financial advisers, such as CERTIFIED FINANCIAL PLANNER™ professionals – use both conversation and surveys to reach some firm answers that might surprise you.

Are there particular money types? In reality, you’ll find quite a number of surveys out there that define money types in particular ways, but you’ll find personalities that are common on the scale from conservative to liberal. Deborah L. Price, a Financial Planning Association member and founder and CEO of the Money Coaching Institute, offers these scenarios in an article titled, “What’s Your Money Personality?”:

The Innocent: Price notes that innocents often live in denial, are easily overwhelmed by financial information and rely heavily on the advice and opinions of others. They tend to be the most trusting because they generally don’t see people or situations clearly – which leaves them open to bad decisions at best and fraud at worst.

The Victim: She notes that victims are people who tend to live in the past and blame their woes on outside factors and situations they claim they can’t control. These people may have been abused, betrayed, or have suffered some great financial loss, but they generally see life as a self-fulfilling prophecy that they can’t change.

The Warrior: Generally seen as a successful person in the business and financial worlds, they will listen to advisors, but they make their own decisions. They tend to be great caretakers.

The Martyr: These people generally put other people before their own financial health. They use their money to rescue others based on their high expectations for themselves and the people they’re rescuing, but these decisions may be costly in the long run.

The Fool: The Fool, explains Price, is a combination of the Innocent and the Warrior because they have no clue about what they’re doing but they’ll act fearlessly. They are financially adventurous and they act on impulse.

The Creator/Artist: These people often have a love/hate relationship with money. They’re constantly struggling to make their finances work, but they often feel that caring about money means something bad.

The Tyrant: price reports that this type hoards money and uses it to manipulate others. They may have everything they need, but they’re never comfortable with their lives because they fear losing control.

The Magician: Price defines the The Magician as the ideal money type. They’re aware of their circumstances and responsibilities and can see situations very clearly.

A financial planner tries to see through the static to find out what you really need to create a solid financial life. But it might make sense to ask yourself a few questions before you and your planner sit down:

1. How would you describe your financial status right now?
2. What’s important about money to you?
3. What’s your family history with money?
4. What do you do with your money?
5. If money wasn’t an issue, what would you do with your life?
6. Has the way you’ve made your money – through work, marriage or inheritance – affected the way you think about it in a particular way?
7. How much debt do you have and how do you feel about it?
8. Are you more concerned about maintaining the value of your initial investment or making a profit from it?
9. Are you willing to give up that stability for the chance at long-term growth?
10. What are you most likely to enjoy spending money on?
11. How would you feel if the value of your investment dropped for several months?
12. How would you feel if the value of your investment dropped for several years?
13. If you had to list three things you really wanted to do with your money, what would they be?
14. What does retirement mean to you? Does it mean quitting work entirely and doing whatever you want to do or working in a new career full- or part-time?
15. Do you want kids? Do you understand the financial commitment?
16. If you have kids, do you expect them to pay their own way through college or will you pay for all or part of it? What kind of shape are you in to afford their college education?
17. How’s your health and your health insurance coverage?
18. What kind of physical and financial shape are your parents in?

One of the toughest aspects of getting a financial plan going is recognizing how your personal style, mindset, and life situation might affect your investment decisions. A financial professional will understand this challenge and can help you think through your choices. Your resulting portfolio should feel like a perfect fit for you!

March 2010 — This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Martin V Higgins, CFP , a local member of FPA

David Bly

Nobody Owes You Anything: From Gardener to Entrepreneur

The average Nicaraguan is born in a shack with a dirt floor. He earns less than $15 a week.

“E,” my gardener in Nicaragua, does much better than that. But he is still, by U.S. standards, poor. Since I am in daily contact with E when I’m there, I often think about how I can help him earn more money. He wants more material goods — and who can blame him, when he sees how “well” we gringos live (in person and on television)?

Several years ago, I was tempted to give him the few thousand dollars it would have taken to make his house one of the nicest in the hamlet where he lives. But I knew from experience that it would do him no good. It would go as quickly as it came. Given money always does.

Worse, it would reinforce the very bad idea that money comes from me to him, instead of from his own labor and ingenuity.

Because I wanted E to have a nicer house and because I wanted him to understand that money represents something of value (hard work, enterprise, etc.), I gave him the opportunity to do some extra work for me.

Since he was already being paid for gardening, I told him I’d pay him considerably more on a per-hour basis than what he was making on a salary — but to earn it, he had to work in his spare time and develop more valuable skills.

He began by learning to paint and do a little carpentry. Then he learned how to do a bit of plumbing and electrical work.

About two years ago, we switched from hourly pay to job-related pay. This gave him the chance to learn how to estimate his time and write up bills and keep receipts and even to negotiate (with me!).

Today, he has the house I would have liked to give him years ago, but he got it with his own efforts. It wasn’t a gift, and he knows it.

He’s also used some of his extra earnings to build and stock a little store that sits in front of his house. His wife works there. It provides his family with a second income.

In his transformation from gardener to entrepreneur, E faced an obstacle that was greater than his lack of skills.

E went to grammar school (the only school they had) during the Sandinista years. The Sandinistas, to remind you, were Communists — so E was taught two very dumb ideas about wealth:

• Everyone is entitled to an equal share of it. (“To each according to his needs.”)
• Those who have more than others should give it up. (“From each according to his means.”)

These ideas move very quickly into thoughts like:

• “It is the responsibility of my government to take care of me.”
• “It is the responsibility of my boss and the business I work for to make me secure and financially successful.”

When E met me, the path to wealth was through Michael Masterson because Michael Masterson, his boss, had the money that E wanted. He didn’t want to have money like me. He wanted to have my money.

He saw money as a static thing. He believed that there was just so much of it in the world, and the only way to get some for himself was to get it from someone else. Since I was the only wealthy guy he knew, it made perfect sense for him to base his strategy for growing rich on “101 ways to talk Michael Masterson into giving me money.”

It is a very good feeling to know that E doesn’t feel like that anymore. I am still his biggest client, but he has done fix-it jobs for other homeowners in our community — and he has the extra income from his store.

Wrongheaded ideas about wealth are not unique to Communist countries. They exist in every country of the world, including the United States.

• Some people think they are entitled to be taken care of by the government. The result: They spend their time applying for government handouts.
• Others think that all the profits of a company should be distributed to its workers. The result: They’re never happy with what they earn.
• Still others think that no one is entitled to have more money than they have. The result: They keep trying to get people they know to give them some of theirs.

None of that will make you wealthy. In fact, it will make it harder for you to acquire wealth. Every minute you spend thinking about or asking for money you didn’t earn is a minute wasted and a bad habit reinforced.

Becoming wealthy in America s not difficult if you are willing to work for it. Anyone who is willing to do what E did can enjoy a much higher income and, eventually, financial independence.

It starts with recognizing that you are responsible for your own future. You must reject every idea that is about acquiring wealth for free. That includes blaming others for your situation — however bad it may be.

The next step, as E learned, is to acquire financially valuable skills. For him, that meant painting and carpentry at first — and later, the basics of owning a business. You probably already have a financially valuable skill — something you know how to do better than just about anyone else you know. You can build on that by acquiring marketing skills. And then management, negotiating, and the other skills that made E the successful entrepreneur he is today.

But to begin, you must overcome inertia. Inertia is the enemy of every worthwhile goal.

Inertia is the reason you can’t find the time to start developing the skills that will bring you financial independence. Or the reason you start, get busy… and then forget about it. Inertia is every excuse I have ever heard from people who return to ETR’s wealth-building bootcamps year after year and tell me why they haven’t yet started turning their dreams into reality.

Inertia is the problem, and there is only one way to overcome it. That way is to take action. Some significant, positive action that will get you going, even if you are not now sure exactly where you want to go.

The Internet abounds with self-help and wealth-building programs that can guide you along the way. (At ETR, we like to think that we offer some of the best.) If you have done nothing else so far, invest in one of these services today and get started on applying the lessons you learn.

And here is where the circle connects: Action is the key, but action won’t happen until you decide that you are responsible for your success.

So repeat after me:

“My parents owe me nothing.”

“My children owe me nothing.”

“My friends owe me nothing.”

“The world owes me nothing.”

“I — and no one else — am responsible for my success.”