A few weeks ago, I traveled to Pittsburgh for a weekend long board meeting for CISV USA, formerly known as Children’s International Summer Villages. CISV is an organization I’ve been involved with in one form or another since age 11 and have blogged about in the past. I mention all of this as I start to reflect on wrapping up my final term this fall after proudly serving their board for many, many years.
One of the discussion topics at this meeting was the latest thinking in child psychology, specifically as it relates to gender and gender fluidity. We were fortunate to have Dr. Michael Parkinson, Sr. Medical Director, UPMC Health Plan & WorkPartners and Dr. Elizabeth Miller, Chief, Division of Adolescent and Young Adult Medicine, Children’s Hospital of Pittsburgh join us to share their thoughts on a subject of growing importance to those involved with programming and supporting youth-based organizations, especially those involving participants & cultures from all over the world.
Dr. Parkinson served as mediator and opened the session with a story about his father, a former economist at the University of Pittsburgh. As part of his work, Dr. Parkinson’s father volunteered at the local prison, teaching economics to inmates. When asked by his son why he bothered to do such a seemingly thankless, fruitless thing, his father used the opportunity to teach his son about the concept of psychic income. This was the idea of valuing something above and beyond its cost or obvious benefits.
To his father, if just one prisoner benefited or took an interest in economics as a result of his teaching, that was sufficient income for the economist to put forth the effort. Dr. Miller chimed in that she, too, volunteers at local prisons for much of the same reasons.
There are clear links to this story and decisions we make around charitable giving, volunteering our time, etc., but psychic income has a bigger impact than that. Humans routinely make decisions based on psychic income and, similar to cognitive biases, often ignore its impact on our brain when weighing our choices.
Sometimes, especially when decisions are complex, multi-layered or feel significant it makes sense to seek unbiased, expert advice to help us weigh these choices. In many ways, this is the very core of financial planning.
As planners, we regularly put together projections around these kinds of significant questions. Whether making a career change, choosing a college, purchasing a vacation home, making a significant charitable gift, or figuring out when to retire, our primary goal is to weigh the financial implications and present the trade-offs involved to our clients.
But we also like to make sure we discuss more than just the financial implications. It’s important to understand the underlying motivation or potential psychic income behind any decision a client is facing. It helps us weigh why one outcome may be more important than another against the pure dollars and cents involved.
When working with us on any significant decision, don’t be surprised if we ask just as much about why you want one outcome over another as we do about how much it costs. While not a financial input, psychic income has a very real impact and is as important a consideration in financial planning.