Human beings have an astounding facility for self-deception when it comes to money. We construct logical-sounding arguments to justify doing things with our money that may not be prudent but feel comfortable. This is especially true when we are acting out of fear or greed.
As humans, it is common to construct somewhat elaborate, short-term excuses to justify behavior that runs counter to our own long-term interests.
Let’s review a few of these money excuses and see if you are becoming victim to your own financial excuses.
1. “I just want to wait until things become clearer.”
It’s understandable to feel unnerved by volatile markets. It is tempting to wait until “the coast looks clear” with good economic news and a promising future. Unfortunately, there is always something either happening or about to happen that is disruptive and challenging to humans and to the world economy. Even if and when “the coast looks clear,” unexpected calamities and events can and do occur without warning. Welcome to the history of our world. Waiting for volatility to clear before investing often results in missing the attractive return that accompanies the risk.
2. “I just can’t take the risk anymore.”
Focusing on the risk of losing money or on avoiding short-term volatility can be a recipe for financial disaster. Paying a premium for safety can be expensive and can result in reaching retirement with insufficient funds. Each of us must be sensitive to our own tolerance for risk, but at the same time, we must not confuse short-term stability with long-term success.
I encourage you to take personal responsibility for your financial future. Be intentional. Develop a financial and investment plan to improve your probability for success.
Stay tuned for part 2, part 3, part 4, and part 5.
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