I can manage my financial life on my own.I don’t need help.I know what I’m doing.These are assumptions or “money scripts” we tell ourselves every day. In reality, the “stick pronoun” can create numerous obstacles to progress on financial issues. In many ways we can’t help it, we are factory wired that way. “I” stands in the way and even sabotages accomplishing life goals. Even worse, we don’t even recognize what “I” is doing. Let’s call this the “I” problem.
Blind Certainty
In the brief video snippet below, I talk about how each of us carry around certain “truths” in our minds that often aren’t actually true. This quickly leads to
making financial decisionsin a vacuum, where we overweigh information that support our beliefs and discount information that is contrary to those beliefs. In other words, we rationally consider views that don’t coordinate with our own beliefs and emotionally evaluate things that do. One more thing...emotions win 100% of the time.The method “I” employs to make financial choices is to decide (emotionally) and then research the necessary rationale for that choice. This is repeated over and over throughout our lives. The “I” problem is at the core of why so few investors are well prepared for retirement.Related:
What If Investments Don’t Matter Much, but Savings and Behavior Do? Don’t Trust Your Intuition
The “I” problem often prevents investors from seeking (and following) financial advice until after they have made mistakes, sometimes the big lifestyle-altering kind. It’s easy to think our intuition for financial choices is spot on. Mostly, this intuition is an illusion stemming from our desire to engineer or control outcomes.Our own personal life goals should be the context for our decisions. In today’s world, it is far too easy to see information that is way out of context to our life and proceed to make choices that don’t fit our particular path and plan.
Strategic Coach founder Dan Sullivan says “Our eyes only see and our ears only hear what our brain is looking for.”“I” can lead you toward continual confusion and anxiety. “I” has a bias towards action, even when staying still, like when the stock market is declining, is actually the better course.So what’s the solution? Find an advisor that can be a behavioral sounding board, a behavioral guide so that you can return to the proper path.Ultimately, the “I” problem can be solved, but just not by you. Start there.
