Nothing in life is guaranteed; things change all the time. There are, however, a few concrete steps that you can take to improve your chances of winning the financial life game.
Every choice you make in life takes you down a particular path; a series of these choices creates a trajectory. This trajectory can move you in the direction you desire, or alternatively, toward a place you don’t want to be.
Each of us make small decisions…little bets every day. We may not think of these micro-decisions as bets but that’s indeed what they are. Some of these small decisions work out mostly as planned; many of these choices don’t work out as planned. What went wrong?
Sometimes, ok, almost all of the time we make decisions, both large and small emotionally. Sure, we rationalize these choices intellectually but that doesn’t alter the emotional foundation.
Think for a minute about two decisions that you made recently; one that (so far at least) worked as you wanted and one decision that fell short. Here’s an interesting tidbit, most individuals can remember with stunning clarity numerous things that didn’t work out in the past. However, when we shift to discussing their future, it’s as if nothing could possibly go wrong; 100% of their future decisions should be on point. How can this be?
Our Current Environment
The time we are living through provides an instant example. Who could have imagined the breadth of devastation to both health and wealth that has occurred over the past few months? If we went back to our beginning of the year plans, nothing even close to what is happening now would even be on the radar. Yet, here we are.
One of the Peloton instructors that I ride with often says “you have to become uncomfortable to make progress.” There’s an element of truth there because you can never know, with certainty, what will happen tomorrow. You eventually have to become comfortable with this to improve your chances at winning the financial life game.
A Simple Plan
One of the best ways to improve your odds is to have a simple and clear plan, (which is just a framework for making decisions), based upon what’s most important to you. Believe me, what you think is important today may not make the cut even a few years down the road. That brings us to the second way to improve your odds: focus on course corrections to your plan based on what the military calls “conditions on the ground.”
Nothing happens in life until you make a decision, you make a choice. From there, you have to actually start taking action steps for the decision to become effective. Finally, you need to adjust your plans and decisions regularly.
Each of these individual steps are dependent upon the other. That is, if you don’t (or can’t because of inertia) make a decision, there is nothing to start and adjust. It’s incredibly easy to become stuck. Stuck is just another word for losing. Don’t get stuck.
We routinely talk with couples that tell us they have discussions that “loop on” concerning the same decisions to the point that no affirmative decisions are made; status quo prevails. Actually, no decision is a decision. It’s important not to let the process of making choices overwhelm the desired outcome.
You are going to make choices that don’t work out, you are going to have small losses. The key is to set up a framework so that you can improve your chances of winning the larger matters. Start there.