328: The Emotionally Intelligent Investor

Buck: Welcome back to the show, everyone. Today my guest and Wealth Formula Podcast is Carolyn Stern. Carolyn is an emotional intelligence and leadership development expert. She’s the author of The Emotionally Strong Leader: An Inside-Out Journey to Transformational Leadership. Carolyn, welcome to Wealth Formula Podcast.

Carolyn: Thanks for having me, Buck.

Buck: So I want to start out right at the beginning, and the topic here really is about building emotional intelligence. But why don’t we start out by defining what exactly emotional intelligence is?

Carolyn: Yeah, absolutely. Well, emotional intelligence is being intelligent about your emotions, what it really is about using the information our emotions provide to act appropriately in the face of daily challenges. So sort of separating ourselves, being an observer of ourselves, and kind of going, okay, what am I feeling? Why am I feeling what I’m feeling, and how can that feeling give me some information? So, for instance, if you’re frustrated versus angry, those two emotions, I mean, we feel them many times throughout our life. How many times have you been frustrated but shown it as anger?

Buck: Yeah, probably all the time.

Carolyn: Right. What is the causal difference between the two, do you know?

Buck: Between frustration and anger? Well, frustration to me is an internal thing. Anger is how you express it is a reaction to it. Okay. I don’t know. That’s what I would think.

Carolyn: That’s what you would think. So they’re both emotions, but frustration stems from unmet expectations. Anger stems from sort of unfairness or unjustice. So there’s an example that if I knew what I was feeling and why I was feeling what I was feeling, I could do something with that information. So if you haven’t met my expectations, I might do something different than if I feel something was fair, unfair, or unjust.

Buck: Yeah. Is there a way to measure emotional intelligence?

Carolyn: Yes. So in the book, I take the reader through a very intense a self assessment of how do you assess yourself on 15 different competencies, and there are 15 different emotional intelligence competencies with the model that I use. And so, honestly, do you consider yourself with self regard? For instance, do you consider yourself confident, able to take your needs into consideration? Would you consider yourself high, low, middle, or on the dark side? And the dark side, something that a lot of literature doesn’t talk too much about, the dark side of emotional intelligence. You can be too much of something. Yeah, think about it. If you’re too confident, you can be a narcissist and have an inability to admit mistakes. So it’s really about finding that sweet spot.

Buck: Got it. And then so once you kind of have a baseline of it, I guess the question is, first of all, we want to build it, presumably, but why do we want to build it? What’s important about this to us?

Carolyn: Well, I think we’ve never learned. I mean, I talk about this in the book. We’ve never learned. We never had an emotional education. I don’t know about you, but I didn’t have superior emotional intelligent role models. Did you?

Buck: Definitely not.

Carolyn: Okay, so unfortunately, you don’t learn it at home. And then having been in a university instructor for almost 25 years, I know we’re not teaching it in the university system. And in fact, it took me five years to lobby to get my emotional intelligence course in the School of Business at the University of Teacher. Why? Because my faculty said it wasn’t academic enough. We all know that as soon as you’re leading people, people are creatures of emotions. So we need to have an emotional education.

Buck: So how does one actually build emotional intelligence?

Carolyn: Well, like you said earlier, Buck, I think the most important thing is you got to figure out what your baseline is, and that’s what teaches you. What is your baseline? So take me, for instance. I’m really assertive. I have healthy, high level of assertiveness. So what does that mean? I have no problems speaking up and saying what I need to say, but in a non offensive way. However, I have a low independence, which means and people are surprised by that because I run my own company. I’m financially independent, I rely I’m emotionally dependent. I rely too much on what people think. I’m not as self directed. Why? Because I grew up with a very overbearing mother, and as a child, I never kind of learned how to stand on my own. 2ft. So even though I’m high in assertiveness and low independence, figuring out what the emotional strategies are to help with my emotional regulation is going to be different than for you. And then on the dark side, I have really high flexibility, which means I am overly flexible. So when my employees ask me to do one thing and I’ll say, okay, sure, and another employee asks me to do another, I’ll flipflop. That’s not a great thing because sometimes you need to be stringent, put your foot down. As a leader, you need to say, this is what we’re doing. And so that my high flexibility coupled with my low independence. That’s my Achilles heel. That’s what I have to work on. And so what we do in the book is we teach people. So of those 15 competencies, where do you land? Where are you high? Where are you low? Where are you in the middle. And where are you? On the dark side. And then from there, we help you come up with some strategies. Now, here’s the thing. The strategies are simple, but not always easy. So, for instance, to be more independent, I need to stop asking reassuring questions. Simple for you, but for me that’s hard sometimes because I struggle with that.

Buck: Right. Got it. I’m curious because you mentioned you’re teaching this in the business school situations. Where do you see the most benefit coming to this? Is it just about building better cultures and businesses and that kind of thing with leadership?

Carolyn: Yeah, I think the way people feel at work affects how they perform at work. So whether we like it or not, feelings aren’t going to go away. I mean, the pandemic was a great opportunity for us to see emotions rise to the surface. Right. So really shy delight that we’re emotional creatures and that we all have emotions and lives outside the office. And now with the lines blurred, people get to see them a little bit more. But we need to start knocking down the stigma that sharing emotions and being honest with how you’re feeling is a sign of weakness, which is why I named the book The Emotionally Strong Leader. You can be emotional and strong. I feel things very deeply, but I’m still a strong businesswoman. And so I think that the key is we need to make friends with our feelings, stop being so afraid of them, look for the wisdom that they provide, and then that’s how you’re going to change how you connect, communicate, and lead.

Buck: How does emotional intelligence, how can it potentially, let’s say not necessarily just in the business world, but in general, improve performance of people’s lives?

Carolyn: Well, for me, I’ll use me as an example. Over a year ago, I was 125 lbs. heavier.

Buck: No way. Really?

Carolyn: I was eating about my feelings. Maybe not a year ago, maybe a year and a bit ago, but a while ago, I was eating about my feelings and finally, in fact, helping me write the book, I got to talk about my feelings and then do something about it. I was able to say, okay, rather than eating and stuffing my feelings down, I could look at them from objectively. And so it helps me in my personal life, health wise, it’s made me a healthier weight than I was prior. But I think any personal interpersonal problem, emotional intelligence is the answer because we are creatures of emotions, and things affect us all day long, and we feel lots of different emotions all day. We just have never been tuned into them. So I’m assuming, Buck, you stop for lunch, right?

Buck: No, not really.

Carolyn: Do you stop for any meal, Buck?

Buck: I have a sort of different lifestyle. I do intermittent fasting, too, so I don’t really eat.

Carolyn: Okay, then you do sleep. But we take care of our physical health. But how often are we taking care of our emotional health? So when was the last time you did a podcast? Did you check in with how you’re feeling?

Buck: Yeah, I usually don’t do that. Usually mostly I focus and making sure that my board is working and my audio is and that kind of thing, but not so much the emotional preparation.

Carolyn: Yeah. And think about it. What could you do if you were having a bad day and not feeling your best? How did that affect your performance? Did you do the best podcast?

Buck: Probably not. So is the idea then, Carolyn, that in an ideal situation, you’d have what you’re about to perform in or do your task or whatever, get an assessment of where you are emotionally and then be able to intervene if it’s not optimized?

Carolyn: Yeah, absolutely. It’s figuring out again where you stand. In the second part of the book we talk about, you got to ask others because our self perception is flawed. Right. How you think you show up might not be how other people think you show up as a leader. So you might have the grandest intentions, but it might not land the way you want it. Right. And I talk about that in the book. I talk about I had an employee once that said to me, I’m so much happier working in a different city than you. And that was like an arrow to my heart because I thought I was a great leader, but I was too involved. She didn’t want I asked her a lot of questions and included her in all the company decisions, but she just wanted to be left alone. So from her perspective, she thought I was over involved. From my perspective, I thought I was doing a great job involving her and making her feel like she was included in part of the decisions. And so your impact does not equal but your intentions does not equal your impact.

Buck: Right. Can you give me sort of an idea give the audience an idea of how you would an example of how you would go about once you’ve got a baseline of your emotional intelligence and say you have a big weakness, what are some of the things that you do in order to actually change?

Carolyn: Well, it depends on what you’re weak in, but I’ll give you an example. So some of the things that I see from the leaders I work with is may be overly confident, like too confident, a bit narcissistic at times, an inability to admit mistake, perhaps. Some of them are too independent, which means they don’t ask for help. They try to be the superhero and have all the solutions to problems. It could be that they don’t have enough empathy, or maybe too much empathy, that they care too much and getting meshed in people’s stuff, or that they don’t have enough empathy and don’t care about people. It could be that they have really low impulse control and don’t delay their gratification and maybe make rash decisions or interrupt people. So it could be a lot of those things, or it could just be simply if they don’t have a positive attitude, outlook on life. So whatever those things are, then you come up where we work with each of our leaders and in the book we talk about them, some of these strategies on what you can do. So, for instance, if you have too much empathy and you’re on the dark side and you get enmeshed in people’s stuff, and you carry the emotional burdens on your shoulders of other people’s stuff, what you can do is set some better boundaries. So next time you’re coaching someone or leading someone and they tell you their problems, you don’t have to solve it. All you need to say, okay, what’s yours is yours and what mine is mine. And you can coach them, you can ask them questions. How do you think you’re going to get through this issue? But you don’t have to be the problem solving hero. And that’s probably one of the biggest things that we work with leaders, is they think that they have to be stoic, unhindered, unflappable. But you’re human.

Buck: Yeah. Let me ask you this, because this show, our focus tends to be on personal finance, curious, on emotional intelligence as it relates to money. What kinds of issues come up there?

Carolyn: Well, I think money can be in a very emotional topic for people. So I think some people might have a mental model of money means scarcity and how they you know, some people could have low impulse control and be spending their money too much. So I think it really depends. Some people might be so dependent on other people for money, they might stay in a relationship that they shouldn’t be longer than it should. So I think money can bring up a lot.

Buck: Well, certainly the fears around investing as well. Right. People have a lot of this. You see it in real time. It’s always amazing. They act irrationally. The markets are going down and like everybody says, buy low, sell high. But so many people, including my dad my dad’s probably like one of the worst investors ever. I’ve tried to talk him off the ledge so many times. Unfortunately, he’s done well in his life, but he’s the guy who, when he gets in, he shouldn’t be in the stock market ever because he’s buying when everybody else is happy and he’s selling when everybody’s scared, which is exactly the opposite of what a good investor does. But is that the type of emotional intelligence that you develop as well?

Carolyn: Yes. So emotions, this is all about decision making, which is one of the five competencies we talk about emotions is how do you solve problems when emotions are involved? Are you objective or do you let your emotions cloud your objectivity? Or as I said before, are you tempted? Do you resist temptation and or delay a temptation? And so with decisionmaking, emotions can actually be a really good factor to think about when you’re making a big purchase. For instance, your emotions will probably make you a little bit more frugal and more cautious about making a purchase of a car or a house or stock or on the stock market so they can be used as some great information to help you. But as you said before, like your father, maybe to his detriment.

Buck: Right. Getting back to the idea of money, how does emotional intelligence shift once someone finds financial success?

Carolyn: Well, I don’t know if it does. Will that make them happy? I don’t know if that is what the goal is. There are lots of successful people out there that have low emotional intelligence. We see that in the news all the time. Yes, I think you can use your emotions to make good decisions about money, but once you’re successful, the ultimate goal with emotional intelligence is you will become happier. That’s the byproduct of emotional intelligence. If you have well balanced emotional intelligence. But just because you’re financially successful doesn’t mean that you’re happy.

Buck: Right. So let’s go back to that idea, though, of happiness. Has there been a way to correlate emotional intelligence with happiness? Are there studies on that or how do we know that?

Carolyn: Yes, so there are four competencies on the model that I use, the EQI 2.0 model, which was helped by multi health systems. I use a model and they say there are four competencies that are directly related to happiness. Those are self regard. So how you view yourself, your confidence, your ability to take your own needs into consideration, interpersonal relationships, how good your relationships are. Are you able to build mutually satisfying relationships? Self actualization, how fulfilled you are in your life? Are you living a life of meaning and purpose? And finally, optimism. Do you have a positive outlook on life? And when you think about what’s happened in the Pandemic, when we stop seeing people and our interpersonal relationships went down, as did probably our Positivity, with all the negative stuff that was going on in the world, obviously the happiness reported right, we’re not as happy and our mental health has deteriorated since the Pandemic. So, yes, there’s a definite correlation between emotional intelligence and happiness.

Buck: What do you think in general, like, a good start for anybody who’s taking this listening to this podcast would be to strengthen their emotional intelligence.

Carolyn: Well, the first thing, I would buy the book.

Buck: Get the book, right. And again, the book is called The Emotionally Strong Leader: An Inside-Out Journey to Transformational Leadership.

Carolyn: Yeah. And the reason why I called it, like I said, emotionally Strong Leader, is you can be emotional and strong. The second reason. It’s called the Inside Out journey to Transformational Leadership. Is it’s? Yes. Leadership is about leading people, but you first got to look inside. How do you show up as a leader and how does that affect the results you’re getting? So my mother always told me if you point a finger at someone, three fingers point back at you. So it’s really about, stop being so afraid of our emotions. Feelings are not facts. They’re just feelings. They’re transient experiences to an emotional trigger. We’ve been emotionally triggered by something, someone, or a situation, and we have an experience. And so they’re fleeting, but they’re incredibly personal, and it’s really hard to be an objective bystander of our emotions. So I would first stop being so afraid of feelings. Figure out what your baseline is. Figure out where you’re strong and where you’re not so strong in where your development opportunities are. Ask people that you know, that you work with your family, people that care about you. How do you see me? Do you think I’m overly confident? Do you think I care too much about what people think? Do you think I can control my impulses? And once you get a really good assessment of, okay, here are my things that I need to work on, then come up. Use the book to come up with some strategies on what you’re going to do to be the best version of yourself.

Buck: Give us some examples of the feedback you’ve got. And obviously people are probably getting a lot of benefit from it. But do you have any anecdotes feedback from readers so far?

Carolyn: The book is not out yet.

Buck: Well, probably not then, right? Well, how about from your students?

Carolyn: From my students, but or from all the courses that we train? I’ve run my company for the last 17 years, the EI Experience, which is where I’m the president of we’ve been doing that since 2017. We’ve never been busier because people no longer don’t know what emotional intelligence is. People know that they need it. The World Economic Forum says it’s one of the top ten skills that are needed for the success for the future of jobs. So it’s absolutely prevalent and you absolutely need it. But it’s been I would say Daniel Goldman made it popular in 1995, but I think now, and especially because we’re leading a different generation. Right. Think about the younger generation. They’re not made up the same makeup as you and I. They have lower independence, lower problem solving, and lower stress tolerance than any other generation before them. You can’t just say to a younger generation, figure it out, because they won’t know how to figure it out. Right. They need a different kind of emotional education than we would. Right?

Buck: Yeah, absolutely. So when does book come out?

Carolyn: The book comes out in Canada September 13, and in the US. October 4.

Buck: And is it going to be available all over the usual areas? Amazon, that kind of thing?

Carolyn: Amazon, Barnes and Noble chapters, you name it. Target, you name it. All the retailers out there, online and on shelves.

Buck: Fantastic. Again. It’s The Emotionally Strong Leader: An Inside-Out Journey to Transformational Leadership. Carolyn, thanks for joining us on Wealth Formula Podcast

Carolyn: Thank you so much for having me.

Buck: We’ll be right back.