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How To Achieve Failure in Your Investing and Financial Life

How To Achieve Failure in Your Investing and Financial Life

June 13, 2016
Investments

Part Three-Discount Poor Behavior In Other Areas of Your Life

 In this series we are looking at how to best achieve the financial failure you might desire.  In Part One we looked at where to best go for input and information so that you may apply the wrong advice at the right time thus helping along your chances for failure.  In Part Two we discussed the components of achieving a good Lifestyle Addiction™ so that you can nudge yourself closer to the failure you are looking for. 

 In this third installment of a series designed to make sure you get the proper level of financial failure, we will address a touchy subject: your behavior.  I believe one of the best ways to get to failure quickly is to discount your poor behavior in the rest of your life.  In other words, if you can get to a point where you can say with a straight face that your poor behavior in other parts of your life has NO impact on your financial decisions then you are well within the realm of the cognitive dissonance required to make sure you fail with your investment and other money decisions.

 I probably need to make sure I get a little more specific here so you decide if you are on track.  Here are just two areas where I see people practicing poor behavior in non-financial aspects of their lives:

  • In a very informal Facebook pole I conducted (totally non-scientific) where I asked people what the two most important things were they wish they could “square away” in life, the overwhelming number one response was health. Specifically, it was weight loss.  Now the formula for weight loss is incredibly simple.  You need to eat less and move more (Actually not just eat less, but eat specific foods and avoid other specific foods but whatever…).  I would argue most people are aware of this formula and yet they can’t get to where they want to be with their body.  Why?  Simple…poor behavior.  Knowledge isn’t the problem, it’s poor behavior (think lots of pizza, alcohol, couch and TV time) that creates all the issues.  I have historically had the same poor behavior as most of you in this area, however, I decided to do some simple things to help change the behavior (I have a nutritionist and I do simple things like get all my gym gear ready the night before).  By addressing the behavior I solve the problem.
  • Relationship troubles seem to be everywhere. Not just husband and wife kind of stuff but parent-child and sibling-to-sibling relationship struggles are evident just by looking at the amount of books, articles and TV shows related to the subject.  I’m no relationship expert, but in all my consumption of relationship materials it seems the formula here is basic as well: communication is the critical piece lacking in poor relationships.  Let’s face it, it’s hard to communicate what we feel and think to the people we love.  It’s easier to bottle it up and just assume that the other party “already knows how we feel”. Again a simple formula but behavior and emotion get in our way of success.  If you don’t a specific pro-active step to solve the behavior (a relationship coach, counselor, etc.), then the behavior will erode your chances of quality relationships with those most important to you.

 From my vantage point as an adviser to hundreds of people, I see people struggle in many areas of their life including the above.  But here is what is important for you to understand if you want the financial failure you desire: in order to fail financially, you MUST be very good at separating poor behavior in other areas of life from your financial behavior.  Specifically you need to be able to say things like “my poor behavior and choices in my life have nothing to do with my financial behavior”.  Or better yet, “I have no poor behaviors in my life”.  The reason this is important for failure in finance is that if you can’t get to one of the two statements above, then you are in danger of seeing that financial success is mostly about correcting poor behavior (just like in every other area of life).  If you begin to understand this then you may just begin to take steps to improve your financial behavior.  If that occurs then you will save more, you will ignore “experts”, you will not become addicted to lifestyle, etc. etc…all things that will take you further away from failure, not closer to it.

 Basically what I’m telling you is that I have yet to work with someone who understands that behavior is the critical piece to working with money and NOT be successful.  So in order to achieve the failure you desire in finance then you simply must be able to say that even though you may be able to identify poor behaviors in your life, those behaviors have zero impact on your monetary behavior.  If you can get to that level of cognitive dissonance, then my friends, you are in the perfect position to fail financially!