fear & money: making the right decisions
I always remember the acronym of fear:
False
Evidence
Appearing
Real
Fear can grip any and every part of our life, but especially when it comes to making money decisions. Have a listen to episode 215 where we dig into flipping fear on its head:
here are my tips to help you not act out of fear!
Can you apply them to your life?
Can you use a non-financial decision with the same principles?
Does the decision form part of an overall strategy?
So for example, if you’re under 30 years old and your superannuation is invested in growth assets; if there is a market correction or a financial crisis – you shouldn’t be thinking of moving your money out of the investment option and into cash – as the strategy of superannuation is a long term investment. This is an example of not letting the strategy of super play out.
Have you had an objective opinion on your situation?
Before you act – can you ask a trusted third party who will workshop the decision with you, to get out of your head. Sometimes, some perspective is very healthy in our lives. Remember that friend who is dating someone that is not right for them – you can see it as you’re looking at the situation from another angle. Someone in your life that has your best interest at heart can help you with decision making. Try and use someone who also is further down the line in terms of their wealth journey.
Think of at least two alternate strategies!
Grab a pen and paper. Start writing. Let’s do a brain dump of possible alternate action points than the one you are thinking of. It’s not to say that what your thinking is wrong, but in order to ensure we are not acting out of fear – it’s a good idea to see if there are any other outcomes. One strategy may be to wait another month and revisit the situation.
“One strategy may be to wait another month and revisit the situation.”
Have a “plan b” before you start!
This might not be helpful with your current predicament; however, next time you’re planning things in your life – can you think of a “plan b” if you have to change plans or something does not work out. If you’re thinking of doing some study and buying a course albeit a university degree or an online course for your career, can you have a think about what would happen if you couldn’t get your ideal job? What is another possible career you can do with the same study. It’s always a good thing not to be painted into a corner!
Do not act out of someone else’s fear
This can be a huge trap for all of us. If you’re younger and your parents are pressuring you to save up and buy a home to live in because that’s what they did . . . this could be dangerous as they may be fearful that you will not get ahead in life if you do not do as they did. The problem is, what if it’s a better strategy for you to rent where you want to live and do your investing elsewhere – albeit an investment property or share portfolio. You can chose this route without being fearful – it’s their fear that may impact you.
– GJ
