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Well I am going to ‘fess up here.

I am a HUGE Harry Potter fan.

Tomorrow marks the anniversary of the release of the first book in the series, Harry Potter and the Sorcerer’s Stone (June 26, 1997).

Not only is the story of J.K. Rowling an inspiring “rags to riches tale” in its own right, but the series of books she authored created a magical environment where some of the youth that was previously being lost to the digital world, via socialized media and online gaming, was reclaimed as they discovered the joy of reading.

I realize that some of my audience may not know Harry Potter from Harry Houdini so I thought I can shed some light on the subject of this post.

J.K. Rowling created the wizarding world of Harry Potter and subdivided his journey to become a wizard into seven separate books, one for each year of training at the Hogwarts School of Witchcraft and Wizardry (and we thought medical school was long).

As Potter’s wizarding prowess grew, he learned of the Patronus Charm, which created an animal spirit guardian for protection (the specific animal conjured would depend on the individual casting the spell).

Another basic spell new students quickly mastered was the Wingardium Leviosa spell which was used to levitate an object.

In a moment of pure geekery I thought some sort of hybrid of these two incantations could have the makings of a great post topic and hence, “Patronus Financialeviosa!” was born.

As is the case with every witch or wizard, the Patronus conjured will vary.

I have provided some samples of these potential creatures of finance and it is up to you to figure out which animal you most identify with and therefore counter some of the potential inherent weaknesses.

So without further ado….

“Patronus Financialeviosa!”

The Financial Creatures:

The Stag.

 

 

This creature was indeed Harry Potter’s animal spirit guardian and it served him well throughout his journeys in the magical world of Hogwarts.

Characteristic:

Defensive nature.

Timid/Easily spooked/Skittish.

Financial Weaknesses:

Averse to undertaking any risks and thus has to settle for more conservative methods for investing and corresponding lower potential gains.

You may have the stag as your financial patronus if you find yourself as a “deer in headlights” when faced with multiple investment choices and have analysis paralysis causing you to choose none.

The Hummingbird.

 

 

Characteristic:

A true busy body in seemingly constant motion.

Short attention span, going from one topic to another and back again.

Financial Weaknesses:

Despite constant movement, predominantly finds oneself in a hovering position with very little headway made.

Lot of excess energy spent just to stay in place.

You may have the hummingbird as your financial patronus if you find yourself reading blog after blog full of wise, actionable advice which you completely agree on, but in the end never take the next step for putting that plan in motion.

The Lemming.

 

 

Characteristic:

Goes along with the crowd assuming that the person at the front must know what he or she is doing.

Financial Weaknesses:

Trusting to a fault.

Easily swayed by general public opinion.

Does not do due diligence when presented with an investment opportunity, but rather assumes someone else has checked it out and therefore it must be good.

You may have the lemming as your financial patronus if you find yourself listening to the media and acting on “hot stock tips” or engage in “panic sales,” which can lead you off a financial cliff.

The Bear.

 

 

Characteristic:

Cautious and defensive.

While others may be rejoicing at continued market highs, the bear plans for the eventual winter by amassing great reserves.

Financial Weaknesses:

With a typical pessimistic view, the bear often finds him or herself sitting out by the sidelines while others are rewarded for the risks taken.

While “hibernating” can find yourself defenseless, such as those who short stocks trying to bank on a “predicted market downturn,” that may or may not occur.

You may have the bear as your financial patronus if you have money “sitting on the sideline,” waiting for a market collapse to capitalize on stocks on sale.

The Bull.

 

 

Characteristic:

Impulsive.

Easily triggered to charge ahead.

Financial Weaknesses:

Once moving forward, momentum makes it difficult to change course until it may be too late.

You may have the bull as your financial patronus if you are caught up in the euphoria of a rising stock market and continue to charge ahead, especially when red flags appear.

The Peacock.

 

 

Characteristic:

Relishes in displays of outward beauty.

Style always trumps substance.

Financial Weaknesses:

Can be heavily leveraged to maintain the appearance of high social status.

Purchases are made with the intent to promote social standing via Instagram or Facebook with no regard to affordability.

You may have the peacock as your financial patronus if you find yourself “house poor” with a heavily mortgaged mansion with 30+ year repayment in order to “afford” the monthly payments, as well as other financed items such as luxury vehicles and jewelry so that you can keep pace with the Joneses.

The Ostrich.

 

 

Characteristic:

Avoids conflict.

Extremely averse to bad news.

Financial Weaknesses:

Rather than face a challenge head on, the ostrich will tend to procrastinate.

At the first sign of trouble the ostrich becomes quite defensive by sticking his or her head in the sand in order to find a place of solitude.

You may have the ostrich as your financial patronus if you notice that you tend to avoid checking your net worth/portfolio during bear markets/downturns as the news is too depressing for you to handle.

The Eagle.

 

 

Characteristic:

Proud.

Soaring high above the fray allows a “big picture” outlook.

Financial Weaknesses:

Potential to be overly concerned with macroeconomics and therefore may not be able to capitalize on local microeconomics trends that could give potential investment advantages.

Pride may cause the eagle to feel overconfident in his or her investing skills with the notion that it is possible to always out-think the general market who are made of less noble creatures.

You may have the eagle as your financial patronus if you dismiss financial advice from “lesser sources” such as blogs and colleagues and only rely on individuals that have multiple letters behind their names/come from high powered programs.

The Bumblebee.

 

 

“Aerodynamically, the bumble bee shouldn’t be able to fly, but the bumble bee doesn’t know it so it goes on flying anyway.”- Mary Kay Ash

Manages to defy the laws of nature and of those who predict it to fail.

Financial Weaknesses:

Although the bumblebee may indeed defy gravity, it may not be the most efficient way to do so as there is more drag by design than necessary.

You may have the bumblebee as your financial patronus if you have created a “hodge podge” Frankenstein-type portfolio created with multiple components that do not necessarily compliment each other.

Although you still may have positive returns, due to inefficiencies such as excess fees and possible over-weighting that result in portfolio financial drag, your returns can be quite blunted.

The Chameleon.

 

 

Characteristic:

The Chameleon extols Stealth Wealth.

The majority of subjects in the Millionaire Next Door clearly have this Patronus as their guardian.

Despite having high net worth, these individuals choose to forgo the flashy lifestyles that the general public perceives as being wealthy and instead blend into the background.

Financial Weaknesses:

Taken to an extreme, these individuals deny themselves any sort of luxury that may bring increased happiness despite the means to do so without issue.

Real risk of being the richest person in the graveyard.

You may have the chameleon as your financial patronus if you garner more enjoyment watching your net worth grow rather than having the latest technology, latest luxury vehicle, or a house that is the envy of the neighborhood.

The Grasshopper.

 

 

Characteristic:

Immortalized by Aesop, the grasshopper is a “live for the moment” type creature who much rather play when the sun is shining and worry about winter later.

Financial Weaknesses:

With a spend now and leave future self to fend for him or herself, the grasshopper may be in for a rude awakening when the sun indeed stops shining and may be forced to live a much more spartan lifestyle later.

You may have the grasshopper as your financial patronus if you are an individual who lives by the “You Only Live Once (YOLO)” creed.

You bank on the fact that there will likely be social safety nets that will bail you out like Social Security (and the Ant) if indeed you run out of money.

 

The Ant.

 

 

Characteristic:

Incredibly diligent, hard worker.

Organized.

Financial Weaknesses:

Can be diligent to a fault.

May miss out on great time-sensitive financial opportunities due to the need to over analyze things.

You may have the ant as your financial patronus if you are an individual who does not fall for “get rich quick” schemes but rather rely on the tried and true method of using time and money to your advantage.

The Ram.

 

 

Characteristic:

Stubborn to a fault.

Financial Weaknesses:

Once mind is set on something it becomes the sole focus, often ignoring other things at its own peril.

You may have the ram as your financial patronus if you keep choosing to do the same financial strategy over and over again despite repeated historical examples to the contrary, thinking, “this time it will be different.”

The Spider:

 

 

 

Characteristic:

The crafty spider does a lot of upfront work, creating an intricate web that is designed to then provide constant resources with minimal ongoing effort needed.

Financial Weaknesses:

The strength of the web relies on how many and how well anchored the individual strands are.

If too many strands are not diversified and therefore anchored to a single point (asset/asset class) it can be blown away with an unexpected gust of wind/market downturn.

You may have the spider as your financial patronus if you are known to “front-load” the sacrifice, with a early high savings rate which, coupled with “living like a resident,” allows you to build a “Capital Snowball.”

The Beaver:

 

 

Characteristic:

The beaver is a master of maximizing surrounding resources.

Financial Weaknesses:

Can truly be “busy as a beaver,” with laser focus and thus neglect other vital aspects of life.

You may have the beaver as your financial patronus if you are one who emphasizes building a Financial Dam to minimize negative cash flow in order to build up enough capital so that it can start working for you.

 

 

 

So when you wave that wand and exclaim, “Patronus Financialeviosa!” which creature appears for you?

 

Note:

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-Xrayvsn