Think that just because you know what a credit default swap is, you can speak the secret language of money? Think again. Psychiatrist/executive coach David Krueger has studied how we relate to our cash, and has put his research into a new book, “The Secret Language of Money: How to Make Smarter Financial Decisions and Live a Richer Life.” Lesson one from Dr. Krueger: “Money speaks to us and we speak with money. It’s kind of a Rorschach; we imbue it with whatever values or meanings we want.” Uh, okay.

Actually, if you can accept Krueger’s psychological take, some of his ideas can be very practical. For example, he warns against an “optimism bias,” which affects our ability to make rational investment decisions or plan for the future:

What it calls into question is really looking at planning and overcoming an optimism bias that we all have that things are going to work out, that we will get funded somehow and we’ll be healthy forever. It really calls into focus the need to realistically envision what life will be like between years 75 and 100, and where income will come from. Not to worry about it, but how to plan for it.

Of course, if you like the psychological side of things, Krueger does manage to channel Freud at least a few times. “Money is one of the two or three more common things that emotional issues hitchhike on,” he says. “Others include food and sex. But money, I really believe, leads the way.” Right. And sometimes a dollar bill is just a dollar bill.

Secret language of money is complicated [Bankrate.com]

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